Participation Criteria

Requirement for all Internationally Transferred Mitigation Outcomes (ITMOs) Authorised under Singapore’s Implementation Agreements (“IAs”) to be first either sold or transferred to Eligible Entities bona fide

To grow Singapore's carbon services and trading ecosystem, we require all ITMOs* authorised under Singapore’s IAs to be first either sold or transferred to an Eligible Entity bona fide (“Qualifying Sale or Transfer”).

An Eligible Entity refers to:

 Singapore-based companies that:

1. (a) is incorporated (in the case of a company) or otherwise registered in Singapore, and is a tax resident of Singapore;

   (b) is carrying on a trade or business in Singapore^; and

   (c) has at least 3 local employees, excluding company directors, who are Singapore citizens or Singapore permanent residents and who and whose employer make CPF contributions); or

2. the Singapore Government (including entities appointed by the Singapore Government to act on its behalf to receive ITMOs) and Statutory Boards

* Excluding OMGE (Overall Mitigation in Global Emissions) and SOP (Share of Proceeds) units. For avoidance of doubt, OMGE and SOP units are not required to be sold or transferred to an Eligible Entity.

^ An entity is carrying on a trade or business in Singapore if it has gains or profits accruing in or derived from Singapore, or received in Singapore from outside Singapore, upon which income tax is payable pursuant to section 10(1)(a) of the Income Tax Act.

Definition of Qualifying Sale or Transfer of ITMOs to an Eligible Entity

Where the project developer (referred to in the IA process as “Project Applicant” or Project Participant”, depending on the stage of the process) is an Eligible Entity, the Qualifying Sale or Transfer refers to the issuance of ITMOs by the carbon standard registry (e.g. Verra, Gold Standard), into the project developer’s registry account.

Where the project developer is not an Eligible Entity, the Qualifying Sale or Transfer is the first transfer of ITMOs out of the project developer’s registry account, after the ITMOs have been issued by the carbon standard registry to the project developer. This Qualifying Sale or Transfer must be to an Eligible Entity.

Action Needed

All project developers must take the following actions to comply with Singapore’s requirements under the Implementation Agreement (IA) (ref. Table 1). The specific stage of the IA authorisation process where each document is to be submitted may differ across IAs.

Table 1

Request for Supporting Evidence

1. Project developers may also be required to provide evidence that ITMOs previously authorised under Singapore’s IAs have either been sold or transferred to Eligible Entities. The Singapore will request such evidence when the project developers have previously successfully applied for corresponding adjustments of ITMOs under one of Singapore’s IAs and are applying for the authorisation of additional ITMOs. The Singapore Government may also request the evidence at any time up to 3 years from the date of the relevant ITMOs’ authorisation. The evidence requested may include:

(a) Registry transaction records showing that past ITMOs authorised under the IA were transferred to the Eligible Entities;

(b) Sales receipt showing the sale of past ITMOs authorised under the IA to Eligible Entities (receipt must clearly indicate the relevant mitigation activity, volumes of ITMOs transacted, and the names of both the project developer and Buyer); and

(c) Other documents that show clearly show ownership transfer of past ITMOs authorised under the IA to Eligible Entities.

2. The Singapore Government may directly contact the Eligible Entities to provide supporting evidence of their eligibility, including:

(a) Last 24 months of audited financial statements; and

(b) Last 24 months of employee records.

The Singapore Government may, on a case-by-case basis and as appropriate, consider other documents submitted by the project developers as evidence for the fulfilment of the above requirements.

The Singapore Government may also, on a case-by-case basis, and as appropriate, waive the requirement for ITMOs authorised under Singapore’s IAs to be first sold or transferred to an Eligible Entity. For instance, the Singapore Government may allow the ITMOs to be first sold or transferred to an entity that does not carry out trade or business in Singapore in a specific case if it assesses that the sale or transfer will bring benefits to Singapore. Project developers seeking waiver of the requirement are to write to Climate_Cooperation@pmo.gov.sg prior to the intended sale or transfer.

Singapore Government Offtake

As part of the IA approval process, a project developer (referred to in the IA as “Project Applicant” or Project Participant”, depending on the stage of the process) must submit a binding offer to the Singapore Government for the Singapore Government to purchase at least 30% of the ITMOs that are authorised under Singapore’s IAs. Details on the terms of sale to the Government will be notified to all applicants who have submitted applications at Stage A or B of the process.

Singapore Carbon Tax-Liable Companies

Where the project developer is an entity that is liable to pay carbon tax under the Carbon Pricing Act 2018, the project developer may elect to:
(a) submit a binding offer to the Singapore Government for the Singapore Government to purchase ITMOs authorised under the IAs, (i) using the template that will be provided by the Singapore Government; (ii) after successful project validation by a third-party VVB (validation and verification body); and (iii) no later than during the submission of the said validation report to the Joint Committee/Relevant Authorities of Singapore and the host country  (The specific stage of the IA authorisation process where the validation report is to be submitted may differ across IAs).
(b) surrender ITMOs authorised under the IAs towards its carbon tax liability within 24 months of the ITMOs being authorised or;
(c) adopt both (a) and (b), provided that a total of at least 30% of ITMOs authorised under the IAs are either offered to the Singapore Government for purchase or surrendered to the Singapore Government to offset its carbon tax liability.

Whether the Singapore Government will accept the offer and purchase the ITMOs is at the Singapore Government’s discretion. The Singapore Government will only consider purchasing ITMOs that secure Article 6 authorisation under Singapore’s IAs, and that meet all of Singapore’s prevailing environmental integrity (EI) requirements at the point of offtake.

Calculation of the 30% Threshold

1.       The project developer submits a request for authorisation of 100,000 ITMOs generated by a mitigation activity under Singapore’s IA. At the same time, the project developer also submits its offer to sell the ITMOs to the Singapore Government, in accordance with the Singapore Government’s requirements.

2.       The obligation to offer the ITMOs to the Singapore Government for purchase will apply to at least 30% of the ITMOs that are authorised for international transfer under the IA. To illustrate using the Singapore-Ghana IA as an example, based on the abovementioned example (see Table 2):

Table 2

Non-Compliance

The Singapore Government reserves the right to impose measures on project developers that do not comply with Singapore’s published requirements (see Table 3). 

The Singapore Government also reserves the option to waive the requirements or measures on a case-by-case basis.

Table 3