What are carbon credits?

Carbon credits, also known as carbon offsets, refer to carbon emissions reductions, measured in tonnes of carbon dioxide equivalent (tCO2e). Carbon credits can be generated through projects which take in carbon from the atmosphere (e.g. reforestation), or reduce the amount of carbon released into the atmosphere (e.g. renewable energy projects). Carbon markets enable the buying, selling, transfer and exchange of carbon credits.

Illustrative lifecycle of carbon credits:

Image shows the development of a carbon credit project, which includes the registration of a project under a carbon credit programme, the verification of a project, the issuance of a credit under a registry, and the purchase and sales of carbon credits.

To ensure these carbon credits can truly advance global climate action and ambition, they need to meet a set of environmental integrity principles.

The image describes Singapore's 7 environmental integrity principles. These principles are to be additional, real, quantified & verified, permanent, no net harm, do not cause leakage, and are not double-counted.

Diagram on environmental integrity principles