Singapore Seeks African Carbon Credits as Most Covet Metals
(Bloomberg) -- China, India and the US want Africa’s critical minerals. Singapore’s main target is different: the continent’s carbon offsets.
The Southeast Asian city-state aims to increasingly tap African countries for carbon credits as part of a drive to boost trade with the continent and meet its own net zero ambitions. At the same time it’s seeking to establish itself as a carbon-trading hub for Asian companies seeking to buy the offsets to meet their climate targets.
“Why we really need Africa as a partner is because of climate change,” said Rahul Ghosh, global markets director for Middle East and Africa at Enterprise Singapore, a state agency that supports businesses from the country.
“Our ambitions for net zero are very high,” said Ghosh. We need a “transference of carbon credits that helps us achieve our carbon goals,” he added.
The Asian country is seeking to sign agreements that will see Singaporean companies play a role in developing carbon credit projects in countries in Africa and elsewhere. Those credits will then be either bought by Singapore to meet its own targets of mitigating emissions or sold on an exchange in the country to buyers trying to offset their output of climate warming gases, Enterprise Singapore said in a response to a query.
Forestry, Cookstoves
Singapore’s interests differ from the US and China, which are vying for Africa’s critical minerals amid growing fears of supply shortages due to rising demand for electric vehicles.
The island nation, ranked as the world’s 57th-biggest emitter by Global Carbon Atlas, has limited scope to generate its own credits due to space constraints. Still, it has pledged to lower total emissions to between 45 million to 50 million tons by 2035.
Meanwhile, companies in neighboring countries also produce significant emissions from large industrial complexes.
African nations can use, for instance, carbon-absorbing forestry programs to produce credits to offset these emissions, as well as cookstove projects which reduce pollution by cutting the use of firewood and charcoal.
A carbon credit represents a ton of carbon dioxide or its equivalent either removed from the atmosphere or prevented from entering it in the first place.
To date, Singapore has signed memorandums of understanding or implementation agreements aligned with the United Nations’ so-called Article 6 agreement with 24 nations. Article 6.2 falls under the Paris Agreement climate treaty and allows nations to trade emissions offsets.
Of those, six are in Africa with Rwanda and Ghana among the most advanced. Earlier this week, the government announced it will buy S$76 million ($59 million) of nature-based credits from four projects in Ghana, Peru and Paraguay, and will solicit more bids later this year.
About 30 projects are being considered in Ghana including ones that involve the restoration of degraded forests where cocoa trees are grown, Jean Ng, regional director of west and southern Africa for Enterprise Singapore, said in the same interview.
Singapore produced about 49 million tons of carbon dioxide or its equivalent in 2023, according to Global Carbon Atlas. By comparison Rwanda produced 1.5 million tons.
(Adds details of Singapore’s purchases in 11th paragraph.)
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