[SINGAPORE] The Singapore government’s tender for the purchase of carbon credits has received bids totalling more than S$1.3 billion across 17 submissions, according to tender documents seen on the government’s procurement portal GeBiz.
The highest bidder was from the carbon trading arm of commodities giant Trafigura at close to S$300 million, though the number of carbon credits offered and its per unit pricing were not disclosed.
The Singapore government had for the first time launched a request for proposal in September last year to procure carbon credits to offset its national emissions.
The government had previously estimated that it would have to offset about 2.51 million tonnes of carbon dioxide equivalent every year between 2021 and 2030, to achieve its national climate target of 60 million tonnes by 2030.
The second-highest bid came from another energy and commodities company Mercuria Asia Resources at more than S$206 million for over five million carbon credits at about S$38.50 each.
Decarbonisation solutions provider DNZ ClimateTech came in third with a total bid of S$200,000 for five million credits at S$40 for each credit.
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Temasek-backed decarbonisation investment platform GenZero also participated in the tender with the highest per unit bid across all 17 offers at S$55, which amounted to a total price of S$27.5 million for 500,000 credits.
Other notable bidders included oil and gas giant Shell which put forward a bid of S$34 million, and China’s stated-owned oil and gas company PetroChina with an offer of S$21.8 million.
After this first tender closed in February this year, Second Minister for Trade and Industry Tan See Leng said in March during the ministry’s Committee of Supply debate that the government would launch a request for proposal later this year for the same purposes.
For this tender, the government is looking to purchase at least 500,000 nature-based carbon credits, which would be used to offset 500,000 tonnes of Singapore’s carbon emissions.
These carbon credits must represent emissions removed or reduced after Jan 1, 2021, and before Dec 31, 2030.
Nature-based carbon credits are generated from projects that protect, sustainably manage, or restore natural ecosystems. Examples of such projects are reforestation, afforestation, improved forest management, as well as the protection of wetlands or coastal zones.
These carbon credits would have to be aligned with Article 6 of the Paris Agreement, which states that the international transfer of carbon credits between countries must result in corresponding adjustments. This means that the emissions being offset are counted only by the country that bought the credits; the country that produced the credits cannot use them to meet its own climate targets.
Besides being correspondingly adjusted, the carbon credits will also have to meet the environmental integrity criteria previously laid out by the authorities.
While Singapore is only able to offset its emissions with credits bought from countries that it has established carbon credit transfer agreements with, the tender documents noted that bidders could source for credits from other countries if it is able to secure a written confirmation from the host country’s government to negotiate a bilateral carbon trading agreement.
Singapore has signed such agreements with only three countries: Papua New Guinea, Ghana and Bhutan.