Asunción, Agencia IP.- Singapore and Paraguay have concluded negotiations on the Carbon Credit Cooperative Implementation Agreement, which will allow the bilateral transfer of carbon credits, aligned with Article 6 of the Paris Agreement.
This was announced today by the Ministry of Foreign Affairs, which accompanied this negotiation process by the Ministry of the Environment and Sustainable Development (Mades).
The finalization of the agreement comes after a meeting between President Santiago Peña and the Senior Minister and Coordinator of National Security, Teo Chee Hean, within the framework of the United Nations Conference on Climate Change (COP28) last week.
This agreement is expected to be signed by both countries in early 2024. The parties will collaborate on a work program to fully operationalize the Implementation Agreement, which may include exchanges of information and best practices, identification of potential projects, and mutual efforts to develop capacities for cooperation.
The agreement also establishes criteria and processes for developing projects and trading carbon credits, as in Article 6 of the Paris Agreement. This is the first agreement of this kind for Paraguay and the first one of Singapore’s with a Latin American country.
Companies in Singapore will be able to purchase carbon credits, aligned with Article 6 of the Paris Agreement, from projects in Paraguay under this agreement. Companies can use these carbon credits to cover up to 5% of their carbon tax obligation and be applied towards their voluntary goals.
The Minister of the Environment, Rolando De Barros, pointed out that «the bases of a bilateral agreement with the Republic of Singapore were established to ensure that our country moves towards full sustainable development that benefits all Paraguayans, through opportunities that improve the possibilities and strengthening of all sectors.
«We promote entry into new markets where environmental commitment merges with production through strategies that respond to the highest standards of carbon markets,» added De Barros.
Senior Minister Teo Chee Hean commented that negotiations are being finalized on the Implementation Agreement, which, once fully operational, will allow carbon credit trading between Singapore and Paraguay following the Article 6 manual of the Paris Agreement. This underlines both countries’ belief in the potential of carbon markets to drive global climate ambition and achieve our climate goals through cooperation.