Ghana and Singapore have inked a pact enabling companies to purchase carbon credits from Ghana-based projects to offset a portion of their carbon tax liabilities.
Singaporean firms can buy carbon credits, offsetting up to 5% of their taxable emissions if the invested projects meet Singapore’s eligibility standards.
In 2024, the carbon tax has surged to $25 per tonne of CO2 emissions, a hike from the previous $5 per tonne, with plans to escalate to $50 to $80 by 2030.
The collaboration aims to bolster climate ambitions for both nations and channel funds into climate mitigation endeavors, as per Singapore’s National Climate Change Secretariat, Ministry of Trade and Industry, and Ministry of Sustainability and the Environment.
Carbon credit projects endorsed by the agreement will foster sustainable development, benefiting Ghana’s communities by creating jobs, enhancing water access, bolstering energy security, and curbing environmental pollution.
Project developers are obliged to allocate 5% of proceeds from carbon credits to climate adaptation in Ghana, aiding the nation in preparing for climate change impacts.
Additionally, developers must annul 2% of carbon credits upon issuance to aid in global greenhouse gas emission mitigation.
This agreement coincides with Temasek-backed investment platform GenZero’s involvement in a forest restoration project in Ghana’s Kwahu region.
The initiative, conducted alongside Singapore-based AJA Climate Solutions, aims to replenish degraded forest reserves and sustainably cultivate cocoa trees in shaded farms, fortifying against climate risks such as floods, heat stress, and pests.
Verification of carbon credits from the Ghanaian project is slated to commence in 2028.