Grace Fu Addresses Concerns Over Carbon Offset Integrity
Singapore is committed to ensuring the integrity of carbon markets as it finalises guidelines for international carbon credits that companies can use to offset their carbon tax obligations. Minister for Sustainability and the Environment Grace Fu affirmed this stance in response to a parliamentary question on Tuesday (Feb 7).
Allegations Against Verra’s Carbon Credits
The commitment follows a report by The Guardian alleging that Verra, one of the world’s leading carbon credit certifiers, issued “phantom” credits for rainforest protection projects. The investigation suggested that most of Verra’s approved offsets provided no tangible climate benefits, with forest loss scenarios overstated by an average of 400%.
Verra is one of two programmes—the other being Gold Standard—with which Singapore’s National Environment Agency (NEA) signed memorandums of understanding (MOUs) last July to develop a framework for high-quality carbon credits.
Singapore’s Assurance on Environmental Integrity
Ms Fu addressed concerns by emphasising the government’s rigorous approach to selecting carbon crediting programmes. “We take all scrutiny of carbon markets and projects seriously and are committed to ensuring that carbon credits uphold high environmental integrity standards,” she said.
She added that Verra and Gold Standard were chosen for their credibility and widespread acceptance under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a programme backed by the International Civil Aviation Organisation (ICAO) and developed through consultations with green groups and experts.
Framework for Carbon Credit Use in Singapore
Singapore’s MOUs with Verra and Gold Standard aim to facilitate the purchase of high-quality carbon credits by companies, allowing up to 5% of taxable emissions to be offset starting in 2024. However, these agreements are non-binding and do not automatically qualify all credits from these programmes. Companies must meet the government’s environmental integrity criteria.
Ms Fu stated that the government is currently reviewing the criteria for acceptable international carbon credits in light of recent developments. A whitelist of eligible credits, including approved host countries, programmes, and methodologies, is expected to be published later this year.
Balancing Opportunities and Criticism
Carbon credits—generated from projects such as reforestation and renewable energy investments—are a key tool for businesses to offset emissions. However, the market faces challenges in verifying the actual impact of these projects. Singapore’s approach reflects its commitment to balancing the need for reliable offset mechanisms with maintaining environmental credibility.
As scrutiny of carbon markets intensifies globally, Singapore’s stringent standards aim to ensure that offsetting supports genuine climate action while fostering trust in carbon trading systems.
