Singapore Carbon Credit Market Analysis

The Singapore Carbon Credit market size was valued at US$ 14.5 million in 2023 and is expected to reach US$ 55.14 million by 2030, grow at a compound annual growth rate (CAGR) of 21% from 2023 to 2030.

Singapore Carbon Credit Market Analysis

Carbon credits are tradable permits that allow organizations to emit a certain amount of carbon emissions. They are used by corporations and governments to offset their carbon footprints and meet sustainability goals. The growth in Singapore's carbon market is driven by increasing climate change awareness, government regulations, and corporate sustainability commitments

The Singapore Carbon Credit Market is segmented by project type, trading type, and end user. By project type, the renewable energy segment accounted for the largest share in 2022. Renewable energy projects like solar, wind, and hydropower are major sources of carbon credits globally. With Singapore's focus on expanding renewable capacity to meet its climate targets, renewable energy projects are expected to drive credit demand.

• Government Regulations to Reduce Emissions: The Singapore government has implemented various regulations and policies to reduce the country's greenhouse gas (GHG) emissions and meet its climate targets. Key regulations include the carbon tax implemented in 2020 on large emitters to incentivize reductions. Singapore also has a mandatory energy efficiency program and emissions reporting requirements. Such policies are expected to be a major driver for carbon credit demand as companies seek offsets to meet compliance obligations. The government aims to halve emissions from its 2030 peak by 2050 and achieve net zero emissions as soon as viable in the second half of the century.
• Corporate Sustainability and Decarbonization Goals: An increasing number of corporations and organizations in Singapore have set carbon neutral or net zero emissions targets. Major companies across sectors like banking, technology, manufacturing and transport have made public commitments to drastically reduce their carbon footprints. For instance, DBS Bank aims to be net zero by 2050, Microsoft by 2030 and Sembcorp Industries by 2050. To meet these goals, companies would need to buy high quality carbon credits to offset hard-to-abate emissions. Renewable energy purchase and energy efficiency measures may not be enough. Voluntary offsetting through credits will thus drive market growth.