Singapore and Ghana signed a carbon credit transfer agreement setting out a legally binding framework and processes for the generation and transfer of carbon credits between the two countries.
The agreement was signed by Singapore’s Sustainability and Environment Minister Grace Fu and Ghana’s Environment, Science, Technology and Innovation Minister Ophelia Hayford.
This agreement will allow corporates in Singapore to access a larger pool of carbon credits that they can buy to offset 5% of their taxable emissions.
The agreement aligns with Article 6 of the Paris Agreement that governs rules on international and bilateral transfer of carbon credits. As per Article 6, Ghana will now have to increase the reported emissions by the amount of carbon credits transferred to Singapore to avoid double counting. One carbon credit is equivalent to the reduction, avoidance or removal of one tonne of carbon dioxide.
The deal requires project developers to contribute 5 percent of their share of proceeds from authorised carbon credits towards climate adaptation in Ghana, helping the country to prepare for and adjust to the impact of climate change. Project developers will also have to cancel 2 percent of authorised carbon credits at first issuance to ensure additional contribution to the overall mitigation of global emissions.