Speech by Singapore's Ambassador for Climate Action at the SCMIF 2025

Promoting Vibrant Carbon Markets

Ladies and gentlemen, good morning. 

The transition to net zero will require significant financing.

• The bad news is that financial flows into climate action are still sorely inadequate.

  • According to the 2023 UN Global Stocktake, annual global climate finance flows have increased and crossed US$800 billion.

  • But this is only about 30% of the US$2.5 trillion needed each year until 2030 to meet the Paris Agreement Goals.

• The good news is that the capital is available.

  • The private sector and institutional investors collectively control vast amounts of capital that can help fund the transition to net zero.

  • The challenge is unlocking and directing this capital effectively.

There are two key enablers to unlock this private capital:

• one, blended finance - using public and philanthropic capital to catalyse private commercial capital; and

• two, carbon markets – facilitating the purchase of high-quality carbon credits from decarbonisation activities.

Australia and Singapore have been active on both fronts.

Singapore has launched a blended finance initiative called the Financing Asia's Transition Partnership or FAST-P with a grant of up to US$500 million on a matching basis.

• This means that if FAST-P can attract an equal amount of catalytic funds from other sources, it will have a pool of capital of up to US$1 billion capable of absorbing first-loss risk on transition projects in Asia.

• The aim is to crowd in up to US$4 billion of commercial capital on this layer of catalytic capital, making a total balance sheet size of US$5 billion.

• FAST-P comprises three funds:

  • the Energy Transition Acceleration Finance, or ETAF;

  • the Green Investment Partnership, or GIP; and

  • the Industrial Transformation Programme, or ITP.

• Last month, FAST-P marked a major milestone with the Green Investments Partnership achieving its first close with US$510 million.

Singapore is grateful to Australia for its strong partnership in FAST-P.

• I am pleased to say that Australia has committed a total of US$113 million, or A$175 million, to FAST-P’s Green Investment Partnership. This includes:

  • US$65 million, or A$100 million, from Export Finance Australia; and

  • US$48 million, or A$75 million, from the Australian Government under the Southeast Asia Investment Financing Facility.

• These investments will support a range of clean energy and sustainable infrastructure projects across Southeast Asia, including renewable energy generation, energy storage, electric vehicle charging networks, sustainable transport systems, as well as water and waste management.

• This partnership highlights Australia’s growing commitment in helping to accelerate Southeast Asia's clean energy transition.

• More broadly, Australia is well-placed to help mobilise blended finance for climate mitigation and adaptation in Asia, especially given its leadership role in supporting Small Island Developing States in the Pacific.

Next, carbon credits

Carbon credits offer a market-driven solution to bridge the financing gap and enable decarbonisation that would otherwise not have occurred.

• On the supply side, carbon credits are generated by mitigation activities that reduce or remove carbon emissions.

• On the demand side, entities may want to purchase such credits to help offset their hard-to-abate residual emissions.

• This convergence of demand and supply creates a win-win situation.

  • For developing countries where financing needs far outpace available resources, carbon credits create an additional pathway to fund mitigation projects.

  • For sovereign and corporate buyers, they offer a transparent and credible solution to meet emissions reduction targets.

Carbon markets also present a new growth opportunity.

• The International Emissions Trading Association estimates that the market value of carbon market financial flows between countries could exceed US$1 trillion per year in 2050.

Singapore has been playing a leading role in promoting carbon markets through initiatives in four key area:

• robust demand for credits;

• trust in the integrity of credit supply;

• transparency in credit transactions; and

• a vibrant carbon services ecosystem

First, Singapore has been signalling demand for high-quality carbon credits aligned with Article 6 of the Paris Agreement.

• We have signed ten Implementation Agreements to-date: with Bhutan, Chile, Ghana, Mongolia, Papua New Guinea, Paraguay, Peru, Rwanda, Thailand, and Viet Nam.

• And just last month, the Singapore Government has committed to procuring 2.175 million tonnes of Article 6-aligned nature-based carbon credits from four projects in Ghana, Paraguay, and Peru at an approximate value of S$76 million.

• When Singapore and carbon tax-liable companies purchase these credits for offsets, they contribute to decarbonisation efforts in our partner countries.

Second, Singapore has been promoting the supply of high-integrity carbon credits.

• In our carbon market tenders, we ensure that the credits generated are of high quality, using robust carbon crediting methodologies from credible offset programmes.

• We provide grants to early-stage carbon project development and financing activities that could generate high-quality Article 6 carbon credits.  We announced earlier this year the first three recipients of the grant.

• We are also piloting the use of energy transition credits as a credible financing instrument for the managed phase-out of coal in Asia.

  • We formed the Transition Credits Coalition, or TRACTION, with over 30 global ecosystem players to identify system-wide barriers and solutions to develop high-integrity supply and build up buyer confidence in energy transition credits.

  • TRACTION will release its final report at COP30 next month.

Third, Singapore has been working to enhance transparency in carbon market transactions.

• Together with the World Bank and the International Emissions Trading Association, we founded the Climate Action Data Trust.

• Through a metadata blockchain layer that links, harmonises, and aggregates data across carbon crediting registries – CAD Trust helps to prevent double counting.

• Today, CAD Trust covers over 90% of transactions in carbon markets – from the birth to the retirement of a carbon credit – and all information is publicly available on CAD Trust’s online data dashboard.

Fourth, Singapore is growing a carbon services and trading ecosystem to service and support global carbon markets.

• To-date, over 100 carbon services and trading firms have established a presence in Singapore.

• We are now delighted to welcome to Singapore the Integrity Council for the Voluntary Carbon Market, or ICVCM.

• As a global meta standard, ICVCM plays a vital role in strengthening integrity in carbon credits through their Core Carbon Principles.

• ICVCM’s decision to build a presence in Singapore, through its Asia Pacific Hub, is a vote of confidence in Singapore’s growing position as a trusted carbon services hub.

• We look forward to ICVCM’s contributions toward scaling a high-quality supply of carbon credits globally, and to building strong partnerships across Asia.  

  • Amy Merrill, the CEO of ICVCM, will share more about its new Singapore office later in the forum.

  • I look forward to even closer cooperation between the Singapore Government and ICVCM in fostering trusted, high integrity carbon markets globally.

Fifth, Singapore, together with Kenya and the United Kingdom, has launched an international Coalition to Grow Carbon Markets.

• The Coalition comprises ambitious governments committed to advancing climate action through credible business use of high-integrity carbon credits alongside deep corporate decarbonisation.

• The Coalition will issue at COP30 a clear set of shared principles on the voluntary use of high-integrity carbon credits by businesses to provide consistency in approach across jurisdictions.

Australia is well-placed to partner Singapore in promoting robust global carbon markets.  In particular, Singapore looks forward to Australia joining the Coalition to Grow Carbon Markets.

• Australia has just concluded negotiations on the Article 6 rule book.

• In the domestic Australian Carbon Credits Unit – or ACCU – market, the Australia Clean Energy Regulator reported that there were 45 million ACCUs in accounts at the end of the third quarter of this year.  It expects the issuance of another 6 million ACCUs in the fourth quarter.

• Together, Australia and Singapore can play an effective role to help scale carbon markets for decarbonisation in our part of the world.

Let me conclude.

There is no pathway to net-zero without well-functioning carbon markets based on high-quality carbon credits which unlock much needed financing for decarbonisation projects in the developing world.

We must strengthen integrity, build trust, and restore confidence in carbon markets.  I hope this Forum will contribute meaningfully to that process.