Singapore and Ghana to collaborate on carbon credits under Article 6 of Paris Agreement

25 June 2024

Singapore and Ghana have signed an Implementation Agreement on carbon credits cooperation under Article 6 of the Paris Agreement. This was announced by the Ministry of Trade and Industry (“MTI”) on 27 May 2024. Both countries will commence the ratification process and operationalise the Implementation Agreement.

The Implementation Agreement sets out a legally binding bilateral framework for the international transfer of correspondingly adjusted high-integrity carbon credits aligned to Article 6 of the Paris Agreement. The framework includes processes to seek authorisation for carbon credit projects and corresponding adjustments for implemented mitigation outcomes. These processes will be made available on http://www.carbonmarkets-cooperation.gov.sg in due course.

This collaboration will advance both countries’ climate ambition and channel financing towards additional mitigation efforts. The carbon credit projects authorised under the Implementation Agreement will seek to promote sustainable development and generate benefits for local communities, such as the creation of jobs, access to clean water, improved energy security, and reduction of environmental pollution.

The Implementation Agreement will require project developers to make a contribution equivalent to 5% of the share of proceeds from authorised carbon credits towards climate adaptation in Ghana. This will help Ghana prepare for and adjust to the impacts of climate change. Project developers will also be required to cancel 2% of authorised carbon credits at first issuance to ensure additional contribution to the overall mitigation of global emissions.

Under Singapore’s International Carbon Credit (“ICC”) framework, eligible ICCs generated under this Implementation Agreement may be used by Singapore-based carbon tax-liable companies to offset up to 5% of their taxable emissions.

This is the second Implementation Agreement for Singapore after the first with Papua New Guinea signed in December 2023. For more information, please read our article “Singapore signs first implementation agreement with Papua New Guinea to collaborate on carbon credits under Article 6 of Paris Agreement”.

Singapore has concluded substantive negotiations on Implementation Agreements with Bhutan, Paraguay, and Vietnam, and signed memorandums of understanding or letters of intent on carbon credits collaboration with Cambodia, Chile, Colombia, Dominican Republic, Fiji, Kenya, Mongolia, Morocco, Peru, Rwanda, Senegal, and Sri Lanka, with the aim of inking similar Implementation Agreements.

Reference materials

The press release is available on the MTI website www.mti.gov.sg.