May 25, 2024
Singapore Carbon Credit Market

Increasing Adoption Of Clean Technologies Is Anticipated To Openup The New Avenue For Singapore Carbon Credit Market

Market Overview:

The Singapore carbon credit market involves trading of carbon credits that represents one metric ton of carbon dioxide or equivalent greenhouse gas reduced or sequestered through specific emission reduction projects. The credits can be traded and sold in the market to organizations and governments for compliance purposes, to meet emission reduction targets. Major products and services in the market includes offset credits, VER (Voluntary Emission Reduction) credits and compliance credits.

The Singapore Carbon Credit Market is estimated to be valued at US$ 14.5 Mn in 2023 and is expected to exhibit a CAGR of 21% over the forecast period 2023-2030, as highlighted in a new report published by CoherentMI.

Market Dynamics:

The Singapore carbon credit market is driven by stringent emission norms imposed by the government on industries. Singapore government has set a target of reducing emissions by 36% from 2005 levels by 2030. This has boosted demand for carbon credits from power and industrial sectors to meet compliance. Another major driver is rising awareness about carbon neutrality pledge amongst organizations across sectors. Many companies are aiming to achieve net zero emissions by 2050 and are increasingly relying on purchase of carbon credits to offset residual emissions and meet sustainability targets.

Segment Analysis:

The Singapore carbon credit market is dominating by compliance segment. The compliance segment accounts for nearly 70% of the market share due to the strict government regulations related to emission reduction targets. Trading of compliance carbon credits is mandatory for large emitters in Singapore to offset their carbon footprint and meet renewable energy mix targets set by Energy Market Authority of Singapore.

The Singapore Carbon Credit Market Segmentation:

  • By Project Type
  • Renewable energy
  • Energy efficiency
  • Waste management
  • Forestry and land use
  • Household devices
  • Fuel switching
  • Others
  • By Trading Type
  • Over the counter
  • Exchange Traded
  • Merchandise
  • Project Based
  • Others (futures, options etc)
  • By End User
  • Corporations
  • Governments
  • Broker & Exchange
  • Project Developers
  • Individuals
  • Others (NGOs, public sector agencies etc.)

PEST Analysis:

Political: Singapore government has set ambitious emission reduction targets of 36% from 2005 levels by 2030. Various policies including carbon tax, renewable portfolio standards and emissions reporting mandate have been introduced to drive the carbon market.
Economic: Growing economy of Singapore relies on energy-intensive industries like petrochemicals, manufacturing etc. However, rising carbon prices are increasing cost of operations for companies. Carbon credits provide a cost-effective solution to offset emissions.
Social: Rising environmental awareness among public and investors has increased traction towards carbon neutral products and solutions. Voluntary carbon credit buyers include organizations targeting net-zero emissions.
Technological: Emerging technologies in areas of renewable energy, energy efficiency, carbon capture are reducing abatement costs. This is increasing supply of low-cost carbon credits. Distributed ledger technology is further improving traceability of carbon credits.

Key Takeaways:

The Singapore Carbon Credit Market Size is expected to witness high growth, exhibiting CAGR of 21% over the forecast period of 2023-2030, due to stringent emission norms. The market size is projected to reach US$ 32 Bn by 2030 from US$ 14.5 Mn in 2023.

Regional Analysis: Singapore dominates the Southeast Asian carbon credit market due to high GDP per capita and implementation of robust climate policies. The country generated over 6 Mn carbon credits in 2021 and is expected to retain its pole position in the region during the forecast period.

Key Players: Key players operating in the Singapore carbon credit market are Climate Impact X, Carbon Credit Capital, Carbonbay, South Pole, Triple Oxygen. Climate Impact X is the largest player with over 15% market share owing to strong voluntary carbon credit portfolio and consultancy services. Carbon Credit Capital and Carbonbay focus on project development and trading of compliance credits in ASEAN region.

1.Source: CoherentMI, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it