Ghana and Singapore have signed an agreement that will allow companies wishing to offset part of their carbon tax liability to purchase carbon credits from projects based in Ghana.
Details
Companies in Singapore can buy carbon credits to offset up to 5% of their taxable emissionsprovided the coal projects they invest in meet Singapore’s eligibility criteria.
The carbon tax in 2024 has increased to $25 per tonne of carbon dioxide (CO2) emissions, up from $5 per tonne previously. By 2030, the tax will eventually reach $50 to $80 per tonne of CO2 emissions.
Digging deeper
Singapore’s National Climate Change Secretariat, the Ministry of Trade and Industry and the Ministry of Sustainability and Environment said the partnership between Singapore and Ghana will advance climate ambitions for both countries and channel funding towards climate mitigation efforts.
Carbon credit projects approved under the agreement will seek to promote sustainable development and create benefits for local communities in Ghana such as job creation, access to clean water, improved energy security, and reduction of environmental pollution.
According to the agreement, carbon credit project developers will be required to contribute the equivalent of 5% of the revenue share from approved carbon credits to climate adaptation in Ghana, which helps Ghana prepare and adapt to the effects of climate change.
Project developers will also be required to cancel 2% of approved carbon credits upon first issuance, to help mitigate global greenhouse gas emissions.
Zoom out
The bilateral agreement comes as Temasek-backed investment platform GenZero has already invested in a reforestation project in Ghana’s Kwahu region.
The project, which is a collaboration with Singapore-based AJA Climate Solutions, will involve replanting degraded forest reserves, including the sustainable cultivation of cocoa trees in shade farms to protect these plantations from potentially harmful climate impacts such as flooding, heat stress and parasites.
Verification of carbon credits from the Ghana project will then begin in 2028.
Source: StraitTimes
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