New Asia

The world’s largest metropolises are in Asia, so urban climate solutions should reign supreme in the region. The finances, however, do not yet add up, so some are starting to look at using carbon credits to solve the problem.

The Asia Carbon Institute (ACI), a new carbon standards organisation launched Tuesday (29 August) in Singapore, is pitched as a bid to scale up the nascent market for urban and tech-based carbon projects, in a region that has drawn less attention from major certifiers already operating today.

Carbon project certifiers scrutinise sustainability initiatives, such as tree-planting schemes or the building of renewable power infrastructure, before allowing developers to issue carbon credits that represent emission savings. Corporate demand for such credits has been rising steadily, with the market reaching US$2 billion in 2021.

Most standard-setters today are based in Europe and the United States; the next closest to East Asia is the Global Carbon Council in Qatar.

“Asia is the manufacturing hub for the world. It hosts a majority of highly carbon-intensive industries, and there is not enough work being done [here] today,” said ACI founder John Lo, speaking to an audience that included carbon project developers and Singapore policymakers.

Lo had set up the non-profit last year, with a team that now includes over 20 scientists, consultants and standard-setters. A Hong Kong launch is scheduled for Thursday (31 August).

The focus of ACI will be on projects such as carbon capture and storage – popular in the electricity, fuels and industrial sectors – and its more futuristic counterpart, the direct air capture of greenhouse gases. Its website also lists categories in waste management, energy efficiency, renewable energy and nature-based solutions.

Global investments in carbon capture have been rising, as pollutive business sectors face growing pressure to decarbonise. However, few commercial projects are up and running, and technical difficulties are still commonplace, leading to some criticism of the field being a “false solution” to climate change.

Lo said ACI would help with training subject matter experts in Asia, and can help to develop new rulebooks for crafting projects and calculating emission savings in niche areas. Since smaller tech-based solutions would not enjoy the economies of scale of large forest-based projects, developers could be allowed to bundle similar initiatives across different properties in one project listing.

Project documents and methodologies will be available to the public, Lo said, promising transparency around the ACI’s work. The certifier is looking to be a member of CAD Trust, a global data platform for carbon registries set up to prevent double-counting of climate benefits. At its Singapore launch, ACI also inked a cooperation agreement with the British Standards Institution, a major producer of technical standards.

ACI is targeting to have up to 100 projects in its registry in a year’s time, Lo said. He is still seeking funders, and will disclose backers later. Lo is currently also a trader at Shell, but he told Eco-Business that ACI is a personal project that the oil firm has no involvement in.

Lo is now in talks with policymakers in the region, including in Singapore, which is preparing a “whitelist” of carbon crediting programmes its businesses can use to offset emission payments.

The city-state allows big carbon emitters – mostly its gas-fired power generators – to use carbon credits for up to 5 per cent of their taxable carbon emissions. Singapore’s carbon price, currently at US$3.70 a tonne of emissions, will rise to US$18.50 next year, over US$33 in 2026, and between US$37-59 in 2030.

Speaking at ACI’s launch, Tang Zhi Hui, senior director of the industry division at Singapore’s trade and industry ministry, said the certifier’s launch is a “dream come true”.

“We really need something that is in Asia, contextualised to Asia,” Tang said. A preference for roles such as carbon standards analysts and audit specialists in Singapore’s foreign employment process could help entities like ACI in their hiring effort, she added.

While major certifiers such as Verra and Gold Standard have been prioritising projects in least developed nations, ACI will not be specifying any country preferences or exclusions. There is a lack of incentives for urban carbon projects across megacities in the region, Lo said.

Technology-based emissions removal methods are becoming more popular today, egged on by major investments from conglomerates such as Microsoft, Shopify and insurer Swiss Re. But forest conservation remains one of the most popular project types, especially in tropical Southeast Asia.

Even though nature-based projects have faced repeated criticism in recent years over overblown claims, harm to local community and integrity issues, project developers at ACI’s launch cautioned against a “tunnel vision” towards technology.

It remains much cheaper to generate emissions savings from protecting forests than trying to filter carbon out of the air, noted Rajesh Sundaresan, co-founder of Singapore-based Carbon Impact Capital.

Protecting forests comes with co-benefits in preserving biodiversity and protecting food supply, said David Horlock, head of another developer CarbonCap.

Nonetheless, technology-based solutions have their place in decarbonising hard-to-abate industries, he said.

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