Singapore firms eye opportunities in cookstoves, EVs from Ghana for carbon credits. (Photo: iStock)
To reduce carbon tax expenditures, Singaporean companies, under government encouragement, have begun focusing on developing carbon credits in Ghana. The discussion has notably increased in the areas of clean cookstoves and green mobility, such as electric vehicles.
However, cross-border carbon credit transactions still require approval from both governments to ensure the environmental benefits of the carbon credits and avoid greenwashing risks. Therefore, it will take time to prove their effectiveness.
Singapore, Ghanaian signed carbon credits transfer agreement
After signing a carbon credit agreement with Ghana, Singapore’s Ministry of Trade and Industry led a delegation of 22 companies to Ghana for commercial negotiations. According to The Straits Times, forest carbon credits, once highly regarded, have lost appeal due to inconsistent quality, and attention has shifted towards credits associated with replacing traditional stoves and electric vehicle adoption.
Burn, a Kenyan clean cookstove carbon credit developer, plans to undertake two projects in Ghana, hoping to obtain permits by 2024 and issue carbon credits as early as 2025. Molly Brown, Carbon Strategy Director at Burn, anticipates that the bilateral agreement between Singapore and Ghana will be implemented within the next couple of years, enabling the use of cross-border carbon credits to offset carbon taxes.
South Korea-based energy company EcoLinks, which primarily operates in Africa, is also planning to develop carbon credits in Ghana. The company plans to provide 100,000 charcoal stoves locally to generate carbon credits by replacing traditional open-fire cooking methods. However, the company’s CEO, Johnson Penn, acknowledges that there is concern among potential Singaporean buyers about whether the carbon credits from this project will be recognized by the Singaporean government and used to offset carbon taxes.
Clean cookstoves reduce carbon emissions by switching to and improving fuels, helping to combat climate change and enhance the health of residents in developing countries. (Photo: Pixabay)
In the electric vehicle sector, Wahu Mobility aims to replicate its Swiss collaboration model by subsidizing 100,000 electric bicycles for delivery workers in Ghana, replacing gasoline-powered motorcycles. Valerie Labi, CEO of Wahu Mobility, notes that many vehicles in Ghana will reach the end of their service life within a few years, making this approach an effective way to promote electric vehicle adoption.
Singapore allows using carbon credit to offset carbon tax
Currently, there is a limited supply of high-quality carbon credits locally, and cross-border cooperation has only just begun. Melissa Low, a researcher at the National University of Singapore’s Center for Nature-Based Solutions, indicates that such agreements need time to understand each other's standards, regulations, and processes.
Singapore pursues high-quality carbon credits while also cooperating with Japan on carbon capture technologies. The carbon credit methodology list released by Singapore and Ghana does not include land use, forestry, or agriculture sectors. The National Environment Agency (NEA) of Singapore explains that this is because the newly approved afforestation, reforestation, and revegetation carbon credit methodologies by Verra are still undergoing review by the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Despite this, carbon credit developers like AJA Climate Solutions and ThreeTrees remain confident and will continue operations in Ghana.
In addition to Ghana, Singapore has also signed carbon cooperation agreements with Papua New Guinea to avoid issues of double-counting carbon reduction benefits. Agreements with Vietnam, Bhutan, and over 20 other countries are still under discussion. Moreover, Singapore has signed a memorandum of understanding with Japan to deepen cooperation on carbon capture and storage (CCS) technologies, aiming to accelerate the achievement of its net-zero goal by 2050.
Source: The Straits Times, Business Times
