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SINGAPORE - Carbon-intensive industries in Asia – including factories and construction and petrochemical firms – will have more types of carbon credits to offset their pollution with the launch of a new registry based in Singapore.

The Asia Carbon Institute (ACI), a non-governmental organisation, checks on the legitimacy of projects that minimise or remove greenhouse gases before certifying and registering them with carbon credits for the voluntary carbon market. The carbon credits can then be traded monetarily on a carbon exchange.

ACI’s focus is on technology-based and urban-related solutions, unlike other carbon verification organisations that mostly focus on projects that are nature-based or located in developing economies.

Concrete manufactured from carbon capture utilisation technologies would be an example of a technology-based project in urban space.

On why these projects tend to be overlooked, ACI founder John Lo said: “In some cases, new methodologies need to be developed. These types of projects typically generate a smaller quantity of carbon credits, compared with nature-based projects.”

The potential for projects to mitigate greenhouse gases is huge in Asia – it is home to over 60 per cent of all megacities and is where many carbon-intensive manufacturing industries can be found, yet there is little focus on carbon credits in these areas, added Mr Lo.

There are currently 20 projects in the pipeline waiting to be certified by ACI, ranging from energy efficiency and greenhouse gas avoidance to blue carbon and nature-based type of projects.

In her keynote address at the launch of ACI on Tuesday, Ministry of Trade and Industry senior director Tang Zhi Hui noted: “(In) our journey towards net zero, carbon credits play a vital role in offsetting residual emissions for hard-to-abate sectors of the economy.

“However, concerns around the integrity of standards and the quality of carbon credits have dampened global confidence in the carbon market.”

The legitimacy of carbon credits was questioned after an article by The Guardian in January reported that only a handful of rainforest offset credits offered by climate action non-profit organisation Verra had shown a reduction in deforestation, with 94 per cent of projects bringing no benefit to the climate.

Ms Tang added that Singapore is taking the lead to advocate transparency and high environmental integrity in the carbon market.

“Standards would be a key part to building trust and transparency,” she said.

To improve the efficiency of validation and verification processes and transparency of carbon credits, ACI signed a memorandum of understanding with the British Standards Institution. The partnership seeks to develop and pilot innovative solutions related to the verification of carbon credits.

Technology could also be harnessed when reviewing a project, said Mr Lo. These could be using Internet of Things sensors that can gather and relay data on greenhouse gas emissions, or using artificial intelligence for the initial review of a project. “Right now, there’s a very manual, human-intensive labour to review project by project,” he said.

ACI is also applying to become a member of the Climate Action Data Trust, which is a global platform consolidating carbon credit data set up by the International Emissions Trading Association, the World Bank and the Singapore Government.

This decentralised record of data from major carbon credit registries seeks to enhance the transparency of the international carbon credit trade, and to reduce the risk of double counting – where the same carbon credit is issued more than once by multiple registries.

Carbon credits from carbon sequestration projects are issued by registries like ACI before they are traded monetarily on a carbon exchange. Buyers can then use them to offset their carbon footprint.

In Singapore, industrial facilities with annual direct greenhouse gas emissions of 25,000 tonnes of carbon dioxide equivalent are liable to pay carbon tax. From 2024, approved international carbon credits can be used to offset up to 5 per cent of taxable emissions.