At the prevailing carbon tax rate, firms lack incentive to buy premium removal credits, says Isometric's chief commercial officer Lukas May. The city-state should draw from Europe’s standards to set minimum quality thresholds, he adds.
The proposed threshold would make low-carbon steel production commercially viable, said local think tank IDEAS ahead of the government's plan to implement a carbon tax on high-emission sectors starting next year.
Dubbed a "pathfinder for the region", it is Singapore's eighth bilateral carbon trading deal to meet its climate targets. The Philippines, which is pursuing a similar pact, has just opened its draft carbon credit policy for consultation.
This accelerated timeline would align its target with the Paris Agreement’s 1.5°C warming limit. The country aims to cut its emissions by 60 per cent from a 2019 baseline by 2035, says a government official.