Singapore and Zambia have inked a preliminary carbon credit deal on the sidelines of the annual United Nations climate change conference currently taking place in Baku, Azerbaijan.
The memorandum of understanding (MOU), signed on Tuesday (19 Nov) at the Singapore Pavilion at the COP29 summit, will pave the way for both countries to trade carbon credits aligned with Article 6 of the Paris Agreement.
These credits come with corresponding adjustments, which means that the emissions being offset are counted only once by the country that bought the credits, while the country that produced them gives up the right to use the credits to meet its own national climate targets. This is to avoid the double-counting of underlying emissions reductions or removals when carbon credits are traded.
Under the MOU, both countries will work towards a legally binding carbon credit transfer agreement aligned with Article 6.2 of the Paris Agreement, which governs bilateral trading of carbon credits.
It is only when an implementation agreement has been signed that both countries can start trading carbon credits. Singapore has signed implementation agreements with Papua New Guinea and Ghana thus far.
For now, the MOU between Singapore and Zambia will facilitate the exchange of best practices and knowledge on carbon credit mechanisms, said the Ministry of Trade and Industry (MTI) in a statement on the same day.