Enviro News Asia, Singapore — The Government of Singapore has launched a comprehensive set of initiatives to strengthen the development of high-integrity carbon markets, reaffirming its leadership in advancing credible climate action and sustainable finance. The initiatives were jointly introduced by the National Climate Change Secretariat (NCCS), the Ministry of Trade and Industry (MTI), Enterprise Singapore (EnterpriseSG), and the Monetary Authority of Singapore (MAS).
The new measures include the publication of Voluntary Carbon Market (VCM) Guidance to help companies use carbon credits responsibly; ongoing discussions to establish an industry-led buyers’ coalition to aggregate demand for high-quality carbon credits; and the launch of a Financial Sector Carbon Market Development Grant worth S$15 million to support financial institutions’ participation in carbon markets.
Carbon markets are a critical enabler in the global transition to net-zero emissions, directing private capital toward verified emission reduction projects. However, recent years have seen slow growth in the sector due to weak demand, limited supply of credible projects, and underdeveloped infrastructure.
To address these gaps, Singapore is implementing targeted policies to boost market integrity, catalyse demand, and build institutional capacity across the carbon value chain. These initiatives build on earlier efforts, including the Carbon Project Development Grant launched at COP29, as well as Singapore’s partnerships under Article 6 of the Paris Agreement and the Coalition to Grow Carbon Markets announced during London Climate Action Week.
The newly published VCM Guidance, developed collaboratively by NCCS, MTI, and EnterpriseSG with input from the Singapore Sustainable Finance Association (SSFA), academia, and global organisations, provides clear principles for businesses on integrating carbon credits into their decarbonisation strategies.
The guidance outlines how companies can identify high-quality credits, when and how to use them, and how to ensure transparent reporting. It aims to instil confidence in companies using voluntary carbon credits as part of broader sustainability goals. The full document is available at https://go.gov.sg/vcmguidance2025, and will be updated regularly in line with international best practices.
In tandem, EnterpriseSG is in active discussions with major Asian corporates to form an industry-led buyers’ coalition. The coalition will align and channel regional demand towards verified, high-integrity carbon credits, helping to scale up credible climate projects across Asia. Further details are expected to be announced in 2026.
To strengthen the role of the financial sector, the Monetary Authority of Singapore (MAS) will introduce the Financial Sector Carbon Market Development Grant on 1 November 2025. The grant aims to alleviate near-term cost barriers and encourage innovation among financial institutions engaged in carbon markets.
MAS will allocate S$15 million over three years, until 2028, from the Financial Sector Development Fund. The grant will support:
- Capability building: Funding the establishment or expansion of teams specialising in carbon project financing, trading, and risk management.
- Innovative financing solutions: Offsetting upfront costs for project verification, transaction structuring, carbon credit insurance, and risk mitigation.
Applications for the grant will open on 1 November 2025, with detailed eligibility criteria available on the MAS website.
Mr Ravi Menon, Ambassador for Climate Action and Senior Adviser, NCCS, emphasised:
“Carbon markets play an important role in mobilising finance for climate action and supporting the global transition to net zero. Through this guidance, we provide businesses with greater clarity and assurance to tap on high-quality credits, encouraging stronger corporate climate ambition.”
Mr Lee Pak Sing, Assistant Managing Director for Trade and Connectivity, Enterprise Singapore, added:
“The VCM guidance offers companies clarity in incorporating carbon credits into their decarbonisation plans. By identifying high-quality credits and ensuring transparent disclosure, businesses can develop credible strategies and contribute meaningfully to global climate goals.”
Ms Abigail Ng, Chief Sustainability Officer, MAS, said:
“High-integrity carbon markets are essential for financing the global transition. The new grant will help financial institutions deepen expertise, develop innovative solutions, and strengthen their long-term engagement in carbon markets.”
Through these coordinated measures, Singapore aims to position itself as a regional and global hub for high-integrity carbon markets, fostering trust, transparency, and innovation in sustainable finance. By combining policy clarity, financial incentives, and industry collaboration, the government seeks to accelerate the flow of capital toward credible climate projects and contribute meaningfully to global net-zero goals. (*)
