Login
By: GenZero and Allen & Gledhill LLP
Clarity in the legal character of voluntary carbon credits (VCCs) is crucial for the scale-up of the voluntary carbon market. For principals that transact in VCCs, primary concerns include transferability of legal title and their ability to exercise proprietary rights over these VCCs, particularly where they are in the custody of a third party. Without clear legal characterisation, the market for VCCs faces risks of fragmentation, inefficiency, and diminished trust among market participants. This undercuts the enormous potential of the voluntary carbon market as a tool for driving climate action. In this paper, we focus on the rationale for, and impetus behind, having a clear legal characterisation of VCCs. We suggest that Singapore has the legal tools available to articulate a position to give clarity to this question.
By: GenZero and Allen & Gledhill LLP, March 2024
This report explores the necessity of clear legal characterisation for voluntary carbon credits (VCCs) to enhance the efficiency and trustworthiness of the voluntary carbon market. It emphasises the importance of legal clarity to ensure that VCCs can be transferred, encumbered, and used as collateral, thus facilitating greater investment in carbon reduction and removal projects. The report argues that VCCs should be treated as intangible property, which will provide market participants with the confidence needed to engage more robustly in the market.
Using the regulatory landscape in Singapore, the report calls for the Singapore Government to provide clear guidance on the legal status of VCCs to position Singapore as a leading hub for carbon trading and sustainable finance.
