S’pore stays firm on climate goals, will work on cross-border solutions like carbon credits: DPM Gan
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Singapore needs to prepare early for a world that will become increasingly carbon-constrained and climate-impaired, DPM Gan Kim Yong said.
ST PHOTO: LIM YAOHUI
- Singapore remains committed to climate action, pursuing cross-border efforts via carbon trading agreements with 10 countries, including a new call for projects in Thailand.
- Domestically, Singapore is reviewing its carbon tax, supporting companies, greening buildings, boosting solar energy, and exploring advanced technologies to achieve climate targets.
- Recognising emissions cuts are insufficient, Singapore will publish its national adaptation plan in 2027 to protect infrastructure, public health, and coastlines from various climate threats.
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SINGAPORE - Despite a slowdown in climate action
Carbon credits under a partnership with Thailand
“Because our domestic options are limited, cross-border solutions are essential,” DPM Gan said during the debate on the budget of the Prime Minister’s Office.
He added that buying carbon credits will allow the Republic to decarbonise by financing emissions reductions overseas.
Essentially, carbon trading allows Singapore-based entities to contribute to decarbonisation by paying for mitigation efforts overseas, where it may be cheaper.
Each credit represents one tonne of emissions removed from the atmosphere or prevented from being released, and can be purchased by the Singapore Government or by private companies based here.
Types of projects that could be accepted under the Thailand-Singapore agreement include forest conservation, reforestation and reducing emissions of methane – another powerful heat-trapping gas – with improved livestock rearing.
This was set out in the partnership inked between Singapore and Thailand in August 2025.
DPM Gan said this is the fifth such call for proposals for the establishment of carbon projects overseas, and the first one involving an ASEAN partner. The other four countries are Ghana, Bhutan, Peru and Rwanda.
Local entities whose purchase of carbon credits will contribute to Singapore’s climate targets can buy them only from countries that the Republic has carbon trading agreements with.
Singapore has signed these deals with 10 countries so far. The call for proposals in the five countries means that half of these pacts have progressed to an operational phase.
The Republic had earlier estimated that it would use high-quality carbon credits to offset roughly 2.5 million tonnes of emissions a year from 2021 to 2030, in order to meet the 2030 climate targets it set under the Paris Agreement.
DPM Gan said that while global climate action is under strain due to political factors, Singapore remains a “climate realist”, and will need to prepare early for a world that will become increasingly carbon-constrained and climate-impaired.
“If we delay action, the eventual adjustment will be sharper, more costly and more disruptive for us,” said DPM Gan, who also chairs the Inter-Ministerial Committee on Climate Change.
As a country with limited access to renewable energy resources, Singapore’s transition will be more challenging and will require more lead time, he noted.
Hence, emissions reduction efforts here will also be costlier than in other economies.
“Whatever the political debates of the day, the physical reality of climate change will continue its course... It would be a mistake to conclude that climate action is no longer relevant,” added the Minister for Trade and Industry.
While Singapore contributes only 0.1 per cent of the world’s greenhouse gas emissions, the country cannot solve the global climate crisis, but it will continue to contribute as a responsible member of the international community, said DPM Gan.
He cited the US’ recent withdrawal from the Paris Agreement
Apart from pressing on with international partnerships, Singapore will stay the course on climate action through its carbon tax regime and its pursuit of clean energy, said DPM Gan.
The Republic will also help smaller companies go green
He was responding to Ms Poh Li San (Sembawang West), who had sought updates on Singapore’s domestic emissions reduction measures.
DPM Gan said the country is raising its 2030 solar deployment target to 3 gigawatt-peak (GWp), having reached 2 GWp ahead of schedule.
Singapore is also exploring advanced technologies such as biomethane, low-carbon hydrogen and nuclear energy.
“Not all pathways will succeed. But we must continue to study our options and create more options for Singapore,” he added.
On the carbon tax, Prime Minister Lawrence Wong had said in his Budget speech
The country’s carbon tax in 2026 and 2027 stands at $45 per tonne.
It is levied on 50 facilities in Singapore, mainly in the manufacturing, power, waste and water sectors, and they account for about 70 per cent of the total national emissions.
Of these firms, DPM Gan said the authorities are engaging trade-exposed tax-paying companies as it may be challenging for them to decarbonise in the near term.
“This makes it difficult for them to compete with firms operating in locations with lower or no carbon tax. We are engaging these affected companies to support their transition,” he added.
Since the carbon tax rose from $5 per tonne between 2019 and 2023, to $25 per tonne in 2024 and 2025, these emitters have been given allowances or carbon tax “discounts” to help them stay competitive and ease cost strains.
Some MPs raised questions on this, with Ms Nadia Samdin (Ang Mo Kio GRC) asking for more transparency on the allowances and future plans, and Workers’ Party MP He Ting Ru (Sengkang GRC) wondering whether allowance recipients are resisting decarbonisation.
In response, DPM Gan said the issue on allowances will be addressed at the upcoming debate on the Ministry of Trade and Industry’s budget.
He also outlined platforms that small and medium-sized enterprises can tap to go greener and build up skills to prepare sustainability reports.
The Singapore Business Federation has recommended setting up a carbon transition council to support companies in making the green transition. The authorities are assessing the proposal, said DPM Gan.
With climate impacts already rife globally, cutting emissions alone is not enough. Therefore, adapting to climate impacts has to become a core pillar of the nation’s long-term climate resilience, said DPM Gan.
Singapore is preparing its inaugural national adaptation plan, slated for publication in 2027.
This blueprint will outline measures to guard infrastructure, public health, water, food and the coastlines from climate threats.
The country is also ramping up targeted measures, particularly to address heat stress, and the Ministry of Sustainability and the Environment will elaborate on this, said DPM Gan.
