Singapore and Mongolia will begin accepting applications for bilateral carbon credit projects on 30 October, creating another route for generating internationally transferred mitigation outcomes under Article 6 of the Paris Agreement.
The initiative follows a bilateral implementation agreement between the two countries. According to a joint statement from Singapore’s Ministry of Energy, Trade and Industry and the National Environment Agency, projects developed under the arrangement are expected to generate carbon credits in accordance with Article 6 of the Paris Agreement.
Eligible credits may be used by Singapore-based companies subject to the country’s carbon tax, provided they meet the requirements of Singapore’s International Carbon Credit Framework. Under the existing system, qualifying companies can use eligible international carbon credits to offset up to 5% of their taxable emissions.
The agreement is Singapore’s sixth bilateral implementation agreement for carbon credit projects, following arrangements with Ghana, Bhutan, Peru, Rwanda and Thailand.
Bilateral agreement expands Singapore’s carbon market partnerships
The Singapore–Mongolia initiative adds another partner to Singapore’s efforts to establish international channels for carbon credit generation and transfer.
Under Article 6 of the Paris Agreement, countries can cooperate voluntarily to meet their climate targets, including through the transfer of eligible emissions reductions between countries. Such cooperation can support the development of carbon markets, but the environmental integrity of the credits depends on robust accounting, monitoring and verification.
Bilateral implementation agreements provide a framework for countries to establish how projects are authorised, how emissions reductions are accounted for and how transferred credits are handled under their respective climate commitments.
The Singapore–Mongolia agreement is intended to enable projects that meet the relevant requirements to generate carbon credits. The available announcement does not specify which project types will be prioritised, the expected volume of credits or when the first credits could be issued.
The opening of applications on 30 October will mark the next step in implementing the bilateral arrangement.
Eligible credits can support Singapore’s carbon-tax obligations
Singapore’s International Carbon Credit Framework allows companies subject to the carbon tax to use eligible international carbon credits to offset a limited share of their taxable emissions.
The framework permits qualifying companies to offset up to 5% of their taxable emissions using eligible credits. Credits generated through the Singapore–Mongolia arrangement would need to satisfy the applicable eligibility and compliance requirements before they could be used for this purpose.
International carbon credits can give companies an additional compliance option alongside measures to reduce emissions from their own operations. However, the offsetting mechanism does not remove the need for direct emissions reductions, and the 5% limit restricts the extent to which eligible credits can be used against taxable emissions.
For projects in Mongolia, eligibility will depend on the applicable bilateral arrangements and the requirements governing authorisation, credit issuance and international transfer. The announcement does not identify specific projects or establish that any credits are already available for purchase or use.
Singapore updates its 2035 climate target
The agreement comes as Singapore advances its national climate commitments.
In its updated nationally determined contribution (NDC), released in 2025, Singapore stated that it intends to reduce greenhouse gas emissions to between 45 million and 50 million tonnes of carbon dioxide equivalent (MtCOâ‚‚e) in 2035. The source material reports emissions of 63 MtCOâ‚‚e in 2024.
Singapore’s earlier NDC set a target to reduce emissions intensity by 36% from 2005 levels by 2030, alongside an ambition to have emissions peak around 2030. The government has also committed to achieving net-zero emissions by 2050.
To support these objectives, Singapore has identified investment in emerging low-carbon technologies, carbon capture, utilisation and storage (CCUS), carbon markets and regional power grids as areas of focus.
International carbon cooperation is one potential component of this approach. Properly governed credit arrangements can help channel finance towards mitigation projects beyond Singapore’s borders, while enabling participating countries to account for emissions reductions under agreed rules.
Carbon capture cooperation remains part of Singapore’s strategy
Singapore faces geographical constraints in developing domestic geological carbon storage capacity. The source material notes that the country lacks suitable underground sites for large-scale carbon storage, creating a need to explore international cooperation for carbon capture and storage (CCS).
Singapore has therefore been looking at collaboration with other countries, including Indonesia, Malaysia, Japan, Brunei and Australia, to advance carbon storage opportunities and exchange technical knowledge and best practices, according to Enerdata Global Energy Research.
Cross-border CCS arrangements can involve capturing carbon dioxide from industrial facilities, transporting it to storage sites in another jurisdiction and ensuring that the carbon remains securely stored. Such projects require suitable geological formations, transport infrastructure, regulatory frameworks and monitoring arrangements.
Although carbon credit cooperation and cross-border CCS are distinct activities, both can form part of broader international climate strategies. The Singapore–Mongolia agreement specifically concerns carbon credit projects under Article 6; the available announcement does not establish that the agreement itself includes CCS projects.
Bioenergy Business Analysis
The Singapore–Mongolia agreement illustrates the continued development of bilateral frameworks for international carbon markets. For Singapore, such arrangements can broaden the pool of potential mitigation projects whose credits may qualify under its carbon-tax framework. For project developers, the agreement may create opportunities to seek authorisation for eligible emissions-reduction activities, although commercial prospects will depend on project rules, costs, credit quality and buyer demand.
The key test will be environmental integrity. Credible Article 6 cooperation requires transparent accounting, safeguards against double counting, reliable monitoring and verification, and evidence that credited reductions meet the applicable requirements. International transfers must also be accounted for consistently with the participating countries’ obligations under the Paris Agreement.
