As firms grow doubtful of carbon credits, Singapore unveils raft of initiatives to tackle transparency concerns

Meanwhile, the Monetary Authority of Singapore (MAS) is introducing a new Financial Sector Carbon Market Development Grant to boost the financial sector’s involvement across the carbon value chain. Applications for the grant will open Nov 1, 2025. 

MAS will set aside S$15 million from 2025 to 2028 from the Financial Sector Development Fund to provide two tracks of support: build carbon market capabilities and spur the innovative financing solutions and platforms. 

“The grant will defray manpower and transaction costs from financing, underwriting and trading of carbon credit projects,” Ms Gan said.

To that end, the grant will co-fund manpower and related costs in areas such as carbon project financing, carbon trading, carbon credit insurance and risk management services. 

Upfront costs associated with developing, structuring and executing carbon credit transactions, such as carbon insurance premiums, can also be offset by the grant.

The National Climate Change Secretariat, MTI, EnterpriseSG and MAS said in a joint release that carbon markets were “a critical enabler for the global transition to net zero” as they channelled capital towards climate action. 

“However, the growth of carbon markets has been constrained in recent years by weak demand, limited supply of high-integrity
projects and underdeveloped market infrastructure,” the press release stated.

It stated that financial institutions may also face high upfront costs in developing expertise and managing the complexity and risks of early transactions. The grant will help defray near-term cost barriers faced by financial institutions and build the foundation for their continued involvement in carbon markets.