Singapore has inked a legally binding agreement with Mongolia to collaborate on carbon credit transfers under Article 6 of the Paris Agreement, marking the city-state’s 10th such deal aimed at expanding its international carbon market.
The agreement was signed on October 6 by Singapore’s Minister for Sustainability and the Environment and Grace Fu and her counterpart, Batbaatar Bat, along with other officials.
The bilateral framework enables project developers to generate and transfer high-integrity, correspondingly adjusted carbon credits aligned with international climate rules.
These credits may be used to offset up to 5% of a company’s taxable emissions under Singapore’s carbon tax regime or for international obligations, such as CORSIA in aviation.
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Under the agreement, Singapore committed to cancelling 2% of authorized credits at first issuance, ensuring those units are not traded or counted toward any national targets—a measure intended to contribute to a net global emissions reduction.
Additionally, 5% of the value from authorized credits will fund climate adaptation efforts in Mongolia.
“It [the agreement] reflects our shared ambition to build a sustainable, low-carbon future,” Minister Fu said in the official press release by Singapore’s government.
Minister Batbaatar added that the deal “[paves] the way for a new model of international cooperation that benefits both people and the planet.”
The initiative is expected to bring tangible development benefits to Mongolian communities, including job creation, improved energy access, and pollution reduction.
A Memorandum of Understanding (MOU) signed in mid-2023 laid the foundations for this most recent binding agreement.
Singapore has previously signed similar deals with countries including Peru, Ghana, and Thailand, as it builds a diversified portfolio of carbon credit partnerships under its International Carbon Credits (ICC) framework.
