FEATURE: Singapore keeps ARR out of Ghana Article 6 'eligibility list'

Quantum Commodity Intelligence – Singapore has published methodologies that will be eligible to offset liabilities in its carbon tax under a deal with Ghana, including some soil carbon protocols but not afforestation, reforestation and revegetation (ARR), a common project type, according to a filing seen by Quantum.

The so-called 'eligibility list' sets out the requirements that Ghana's carbon credits must meet to be accepted for carbon tax-liable companies in the city-state. Singaporean firms can offset up to 5% of their taxable emissions under a system designed in early 2022.

So far, Singapore has only published such lists for Papua New Guinea (PNG) and Ghana, with which it has signed definitive cooperation agreements on Article 6 of the Paris Agreement.

While the volume of credits that Singapore is expected to import as part of its carbon tax is, at most, in the few millions of tonnes a year, the eligibility list has wider implications as it helps define a benchmark of 'quality' in the carbon market and could be used by other countries. Last year, Singapore's decision to keep out most REDD+ methodologies made headlines, for example.

Under the Singapore-Ghana deal, signed last May, Singapore will only accept projects from two standards for now. They are Gold Standard and Verra's Verified Carbon Standard (VCS), according to the notice seen by Quantum. The note specifies that "all active methodologies published before 31 March 2023 except those under the 'Land Use and Forestry & Agriculture' category of Gold Standard for the Global Goals" are eligible under the protocol.

Meanwhile, all active VCS methodologies published before March 31, 2023, except those that are under the Agriculture, Forestry and Other Land Use (AFOLU) sector, also known as 'sectoral scope 14',  are eligible.

The following Verra AFOLU methodologies are also eligible:

• Scenario 2a and 3 of VCSN Jurisdictional and Nested REDD+ (JNR) framework;
• VM0012 Improved Forest Management in Temperate and Boreal Forests (LtPF), v1.2;
• VM0017 Adoption of Sustainable Agricultural Land Management, v1.0;
• VM0021 Soil Carbon Quantification Methodology, v1.0 ;
• VM0022 Quantifying N2O Emissions Reductions in Agricultural Crops through Nitrogen Fertilizer Rate Reduction, v1.1;
• VM0024 Methodology for Coastal Wetland Creation, v1.0;
• VM0026 Methodology for Sustainable Grassland Management (SGM), v1.1;
• VMD0040 Leakage from Displacement of Grazing Activities, v1.0;
• VM0032 Methodology for the Adoption of Sustainable Grasslands through Adjustment of Fire and Grazing, v1.0;
• VM0036 Methodology for Rewetting Drained Temperate Peatlands v1.0;
• VM0041 Methodology for the Reduction of Enteric Methane Emissions from Ruminants through the Use of Feed Ingredients, v2.0; and
• VM0042 Methodology for Improved Agricultural Land Management, v2.0.

Soil carbon, which has a host of projects in the pipeline, is eligible, but not ARR, despite being in hot demand among investors. Rice methane projects, which are common in Asia, are also eligible, but only if they use VM0042. Verra is currently developing a new standalone methodology for rice methane. Some scenarios of Verra's JNR framework will also be acceptable, although it is unclear if any such projects are in development in Ghana.

Late last year, the African country signed a deal with the Leaf Coalition, a group of jurisdictional REDD+ credit buyers, under the Architecture for REDD+ Transactions' (ART) The REDD+ Environmental Excellence Standard (Trees).

Singapore has also sent a delegation to Ghana aimed at generating a stream of project-based carbon credits from the country under Article 6. Singapore's Minister of State for Trade and Industry Alvin Tan is leading the delegation of government officials and 22 companies to Accra and aims to foster ties with companies in Ghana seeking carbon revenue.