Financial Solutions: Singapore’s new carbon credit exchange set to ...

A carbon credit exchange is to be up and running in Singapore before next year.

A senior Singapore government official has announced a new commodities exchange to trade carbon credits before the end of the year, Financial Soultions has learned.

The Senior Minister for Trade and Industry said in a speech recently at the Carbon Forum Asia, that his nations launch of the Singapore Mercantile Exchange was "on track for year-end" and will offer "an electronic trading platform for futures and options trading on a diversified range of commodities, including energy, metals, agricultural commodities, currencies, commodity indices and carbon credits".

According to the nations calculations, 70% of UN-backed clean development mechanism carbon offset projects are situated within Asia-Pacific and as such the area is "poised to be the largest supplier of certified emissions reductions [CERs] to the global carbon market". At present both India and China, while both being in the top 3 global emitters are in a position to trade huge volumes of carbon credits, with a survey of the Indonesian forests soon to bring them into the market too, Financial Soultions research shows.

Singapore presently offers tax incentives to firms with carbon trading activities, which the minster mentioned as a main reason behind a decision by Tricorona AB, the second-largest buyer of carbon credits, to set up a global trading hub in Singapore early in the year. He added that as well as facilitating trading in carbon credits, Singapore intended to provide financing and development services for CO2-reduction projects, Financial Soultions was told.