In more detail
The implementation agreement was signed by Rwanda's Minister of Environment, Dr Valentine Uwamariya, during her visit to Singapore, and Singapore's Minister for Sustainability and the Environment, Grace Fu, who also serves as minister-in-charge of Trade Relations.
This bilateral pact is part of Singapore's broader strategy to meet its climate targets under the Paris Agreement through the use of Article 6 mechanisms, which allow countries to voluntarily cooperate in achieving their nationally determined contributions (NDCs).
The implementation agreement sets out a legally binding bilateral framework for the international transfer of correspondingly adjusted high-integrity carbon credits aligned with Article 6 of the Paris Agreement. Both countries will set out the process to seek authorization for carbon credit projects and corresponding adjustments for implemented mitigation outcomes.
Correspondingly adjusted carbon credits authorized under this implementation agreement may be used for various purposes, such as the following:
- To offset up to 5% of a company's taxable emissions under Singapore's International Carbon Credits framework from 1 January 2024, subject to eligibility
- To comply with binding mandates such as NDCs and other international mitigation purposes (e.g., the requirements under the Carbon Offsetting and Reduction Scheme for International Aviation)
Singapore has previously signed similar implementation agreements with Papua New Guinea, Ghana, Bhutan, Peru and Chile. These agreements are designed to ensure that carbon credits are of high environmental integrity and contribute to sustainable development in the host countries.
Singapore has estimated that it will use high-quality carbon credits to offset approximately 2.5 million tonnes of emissions annually from 2021 to 2030. For context, Singapore's projected total emissions in 2030 are expected to be 62.51 million tonnes, with a target to reduce this to 60 million tonnes through the use of carbon credits.
Dr Uwamariya emphasized that the agreement with Singapore aims to promote high-integrity carbon markets, achieve tangible emissions reductions and support sustainable development for Rwandan communities. Minister Fu noted that the pact builds on the strengthened cooperation between Singapore and Rwanda in forward-looking areas, such as the digital economy and fintech.
Key takeaways
This agreement represents a strong vote of confidence in Singapore's credible carbon ecosystem.
With Rwanda joining the list, Singapore has now signed six carbon credit implementation agreements since late 2023. This reflects its proactive approach to building a diversified and credible portfolio of carbon credit sources.
These bilateral agreements operationalize Article 6 of the Paris Agreement by enabling Singapore to meet part of its climate obligations through international cooperation. They not only support Singapore's broader ambition to become a global hub for carbon services and green finance, but also align with the country's Green Plan 2030 and its long-term low-emissions development strategy.
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For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.
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