Singapore’s National Climate Change Secretariat (NCCS), Ministry of Trade and Industry (MTI), Enterprise Singapore (EnterpriseSG) and the Monetary Authority of Singapore (MAS) have announced new initiatives to boost the development of high-integrity carbon markets. These efforts include publishing voluntary carbon market (VCM) guidance for businesses, forming an industry-led buyers’ coalition to aggregate demand for high-quality carbon credits, and launching a Financial Sector Carbon Market Development Grant to help financial institutions participate in these markets.
Carbon markets are viewed as crucial tools in accelerating the global transition to net zero by channeling finance into climate action. However, their growth has been slowed by weak demand, a limited supply of credible projects, and underdeveloped market systems. To tackle these challenges, Singapore has introduced multiple initiatives designed to stimulate demand for high-quality carbon credits, expand the pool of trustworthy projects, and strengthen the overall market framework. These include the Carbon Project Development Grant, unveiled at COP29, and international partnerships under Article 6 and the Coalition to Grow Carbon Markets.
The newly released VCM guidance, developed in collaboration with the Singapore Sustainable Finance Association and other partners, provides companies with a framework to use carbon credits responsibly as part of their decarbonisation strategies. EnterpriseSG is also working with leading Asian corporations to form a buyers’ coalition that aligns regional demand with verified, high-quality carbon credits, with further details expected in 2026.
MAS has announced a S$15 million Financial Sector Carbon Market Development Grant to encourage financial institutions to engage more deeply in carbon markets. Running until 2028, the grant will support the creation and expansion of teams working on carbon project financing, risk management, and trading, while defraying initial costs linked to transaction structuring, verification, and carbon credit insurance. Applications for the grant will open on November 1, 2025.
Together, these initiatives aim to strengthen the carbon market ecosystem, promote transparency, and accelerate credible climate finance. Officials emphasized that high-integrity carbon markets are vital for achieving global climate goals. Ravi Menon, Ambassador for Climate Action at NCCS, highlighted that such markets not only drive finance for climate action but also foster sustainable growth in host countries. Leaders from Enterprise Singapore and MAS added that clear guidance and financial support will enable companies and financial institutions to build expertise, innovate, and contribute meaningfully to global decarbonisation efforts.
