Singapore Issues Voluntary Carbon Market Guidance Covering Credit Quality and Use

Singapore's Ministry of Trade and Industry, the National Climate Change Secretariat and Enterprise Singapore have released Draft Guidance on Voluntary Carbon Markets, providing companies with a framework for using carbon credits as part of credible decarbonisation plans and for assessing credit quality. A public consultation on the draft closes on July 20, 2025.

The guidance addresses a series of principles to help companies evaluate the environmental integrity of carbon credits, including ensuring emissions reductions are additional, not double-counted, quantified and verified, permanent and do not cause emissions leakage elsewhere. Critically, the document states that credits should be used only after a company has prioritised all feasible emissions abatement efforts, establishing a clear hierarchy that places direct emissions reductions above offsetting. Companies are also encouraged to consider portfolio-level quality and risk, explore ratings and labels as quality assessment tools, and use insurance to manage credit portfolio risk.

The guidance responds to industry feedback on the need for greater clarity on voluntary carbon markets, with the agencies noting that market growth has been constrained by a lack of standardisation that has undermined confidence and created reputational risk concerns among potential buyers. Singapore is positioning itself as a regional hub for carbon credit trading, including through the Climate Impact X exchange, and clear government guidance on credit quality and use integrity is intended to give companies operating in the market greater certainty and reduce the risk of greenwashing claims related to carbon credit use.

The guidance is relevant to Indian companies active in voluntary carbon markets, both as credit buyers seeking to address residual emissions and as project developers generating credits for export. Singapore's framework, emphasising additionality, verification and transparent disclosure of credit use, aligns with the quality standards being applied to Indian agricultural and forestry carbon projects, such as those developed under Verra methodologies. The consultation process provides an opportunity for market participants to shape the final guidance before it influences procurement standards across the Southeast Asian and broader Asia-Pacific carbon markets.

Key figure — July 20, 2025 — consultation deadline for Singapore VCM guidance