Market Overview:

The Singapore carbon credit market involves trading of carbon credits that allows emitters to emit a certain amount of greenhouse gases. The credits are generated by implementing projects that reduce or avoid greenhouse gas emissions. Emitters can purchase carbon credits from others who have surplus credits by undertaking emission reduction activities. This helps achieve emission reduction targets collectively in a cost-effective manner.

The Singapore carbon credit market is estimated to be valued at US$ 14.5 Mn in 2023 and is expected to exhibit a CAGR of 21% over the forecast period 2023-2030, as highlighted in a new report published by CoherentMI.

Market Dynamics:

The growth of the Singapore carbon credit market is primarily driven by increasing government support and regulations around carbon trading. The Singapore government has set an emissions reduction target of 36% from 2005 levels by 2030 and aim to achieve net-zero emissions by 2050. It has also launched the Singapore Carbon Pricing Act in 2021 that established the carbon trading scheme and made carbon credits trading mandatory for large emitters.

Another factor fueling the market growth is rising awareness among corporates about benefits of carbon credits trading and investing in carbon reduction projects. Companies perceive it as a strategic decision to voluntarily lower operational carbon footprint and gain competitive advantage. However, lack of universal protocols and standards for certification of carbon credits poses a challenge to the market growth.

SWOT Analysis:

Strength:
- Singapore has strong government support in the form of incentives and regulatory framework which promotes carbon credit trading.
- Presence of major carbon credit exchanges like Climate Impact X and South Pole enhancing liquidity and transparency in the market.
- Singapore is strategically located in Asia Pacific region providing access to major emerging economies participating in carbon trading.

Weakness:
- Limited scope for generation of carbon credits within Singapore requires large imports to cater domestic demand.
- Carbon credit market is exposed to regulatory and political risks associated with climate change policies of different countries.

Opportunity:
- Growing international commitment towards net-zero emissions by 2050 is opening new avenues for carbon offsetting and trading.
- Nearby countries like China, India and Indonesia emerging as big emitters presenting opportunities for Singapore based players.

Threats:
- Stiff competition from other established hubs for carbon trading like European Union Emissions Trading System and China national ETS.
- Disruptions caused by the ongoing global pandemic may lower demand for carbon offsets in short term.

The Singapore Carbon Credit Market Segmentation:

  • By Project Type
  • Renewable energy
  • Energy efficiency
  • Waste management
  • Forestry and land use
  • Household devices
  • Fuel switching
  • Others
  • By Trading Type
  • Over the counter
  • Exchange Traded
  • Merchandise
  • Project Based
  • Others (futures, options etc)
  • By End User
  • Corporations
  • Governments
  • Broker & Exchange
  • Project Developers
  • Individuals
  • Others (NGOs, public sector agencies etc.)

Key Takeaways:

The Singapore Carbon Credit Market Size is expected to witness high growth, exhibiting CAGR of 21.% over the forecast period, due to increasing commitments by governments and corporates towards achieving net-zero emissions. Regional analysis

Singapore dominates the carbon credit market in Asia Pacific region with over 30% share in 2023. Other major markets include China, India and South Korea but Singapore is fastest growing due to strong government push for low carbon economy.

Key players operating in the Singapore Carbon Credit Market are Climate Impact X, Carbon Credit Capital, Carbonbay, South Pole, Triple Oxygen. The market is highly consolidated with top 5 players accounting for over 50% share. Climate Impact X and South Pole are leading exchanges for voluntary carbon assets in the region.

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