The agreement sets the stage for carbon credit exchanges between the two nations.
Singapore’s carbon trading agreement with Peru has reached an advanced stage, with negotiations substantially concluded. Announced on the sidelines of the COP29 climate summit in Baku, Azerbaijan, the deal paves the way for the formalisation of an implementation agreement, which will enable Singapore to purchase carbon credits from Peru.
This agreement builds on Singapore’s efforts to address its carbon footprint, given its limited resources for decarbonisation. Singapore will rely on carbon credits from countries like Peru to offset up to 5% of its taxable emissions, in line with its carbon tax liabilities. The partnership will focus on reforestation and other carbon credit projects, benefiting local communities in Peru by promoting sustainable development.
Singapore has similar agreements with Papua New Guinea and Ghana, though carbon trading has not commenced yet. Peru joins countries such as Bhutan, Vietnam, and Paraguay in the advanced stages of carbon trading discussions with Singapore. With more than 20 countries engaged in carbon market collaborations, this bilateral framework sets criteria for the development and transfer of carbon credits between both nations.
In addition, Singapore is also exploring regional collaborations, such as the ASEAN common carbon framework, to reduce the cost of implementing carbon initiatives across Southeast Asia.
