Mr Chua Kheng Wee Louis asked the Minister for Sustainability and the Environment (a) whether due diligence was done by NEA on carbon credits issued by Gold Standard and Verra before Memorandums of Understanding (MOU) were signed in 2022; (b) if so, what are the findings of the due diligence; (c) what is NEA’s assessment of recent claims by researchers that most of Verra’s rainforest offset credits are phantom credits; and (d) whether the MOUs with Verra will remain in force in light of the recent developments.
The Minister for Sustainability and the Environment (Ms Grace Fu Hai Yien): Mr Speaker, the MOUs that the National Environment Agency (NEA) signed with Gold Standard and Verra aim to facilitate Singapore-based companies in exercising the option to use high-quality international carbon credits (ICC), to offset up to 5% of their taxable emissions from 2024. The MOUs are not legally binding and do not qualify all ICC issued by Gold Standard and Verra, as companies must meet the environmental integrity criteria of the Singapore Government.
Gold Standard and Verra were selected as MOU partners as they are two of the largest carbon crediting programmes which have been accepted by the International Civil Aviation Organisation or ICAO to issue carbon credits for compliance under the Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA for short. CORSIA standards have been developed and backed by a multilateral process led by ICAO, in consultation with green groups and experts, and are widely regarded as being among the most rigorous standards in the industry.
The Singapore Government is aware of The Guardian’s report on rainforest credits issued by Verra and the response and clarification issued by Verra. We take all scrutiny of carbon markets and projects seriously, and are committed to ensuring that carbon credits uphold high environmental integrity standards. We will take these developments into account as we finalise the environmental integrity criteria for the ICC that are eligible for carbon tax offset. We will publish a whitelist of acceptable ICC later this year, which will include eligible host countries, carbon crediting programmes and methodologies.
Mr Speaker: Mr Louis Chua.
Mr Chua Kheng Wee Louis (Sengkang): Thank you, Mr Speaker. I have two quick supplementary questions. The first is in relation to the whitelist and eventually the list of approved and eligible credits. What are the steps that the Ministry will take to ensure the veracity of these credits that are available today and in future? Secondly, in terms of the Singapore-based companies themselves who are looking to use carbon credits to offset their carbon emissions, how do we ensure that the companies themselves buy only the verified and so-called legitimate credits?
Ms Grace Fu Hai Yien: Thank you very much. As I mentioned in my main reply that we would consider all developments in standard settings or discussions or multilateral fora including in CORSIA and other discussion fora. And we will do our best to work with stakeholders to ensure that the carbon credit offsets have a good chance of developing into a healthy set of markets.
As to the second questions on companies, different companies have different purposes and motivation when going into carbon credits, I do not think the Government should tell them how they would offset their carbon but reputable companies may want to also monitor what Governments are doing and if necessary, they may like to follow what the Government has stated in our whitelist and also in our methodologies.
Ultimately, I think all companies, players in the carbon credit markets, will have to look at standards, have to look at methodologies and all the assumptions therein. The carbon credit market is a very, very broad and extensive one, covers many, many sectors and so companies will have to pick and choose the sector they are interested in and pay attention on methodologies.
Ministry of Sustainability and the Environment
7 February 2023