Singapore keeps ARR out of Ghana Article 6 project '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 first 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 climate change 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: Gold Standard and the Verified Carbon Standard (VCS), managed by Verra, 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 will also be eligible, though:

• 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, will therefore be eligible, but not ARR, despite the fact it is currently in hot demand among investors.

Rice methane projects, which are common in Asia, will also be eligible, but only if they follow methodology VM0042.

US-based registry 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).

Planned visit

Over the weekend, Singapore sent a delegation to Ghana aimed at generating a stream of project-based carbon credits from the West African country under Article 6 of the Paris Agreement.

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.

"Companies will be briefed on how to utilise the implementation agreement, familiarise themselves with the business environment in Ghana and business matching session will be held to foster partnerships that will support the development of Article 6 projects," Singapore's Ministry of Trade and Industry said in a July 13 press release.

Singapore and Ghana in May conducted a 'virtual signing' of an implementation agreement on Article 6 carbon credits, which set up a framework for the transfer of carbon credits between the two countries.

Through that agreement, project developers will be required to contribute a 5% share of proceeds from authorised carbon credits towards climate adaptation efforts in Ghana.

In addition, 2% of authorised credits must be cancelled upon issuance to ensure a greater reduction in global emissions.

A Singapore-Ghana carbon markets roundtable is being held on July 15-16, where Singapore-based companies will meet government agencies from Ghana and local businesses.

The names of the companies participating in the roundtable, and the economic sectors that will be the focus of potential projects, were not disclosed.

The Singapore carbon tax has increased from SGD5 per tonne of CO2 equivalent ($3.7) to SGD25 ($18.6) this year, and is set to rise further to SGD45 ($33.5) in 2026, with a view to reaching SGD50-80/mt ($37-60) by 2030.