Key Updates from Paraguay, Papua New Guinea, and Singapore
Author: Fundi Maphanga
In this edition of our newsletter, we spotlight three key developments shaping the global voluntary carbon market (VCM).
Paraguay has officially enacted its long-anticipated carbon market law, solidifying an institutional framework and aligning market activities with its NDC commitments.?
Meanwhile, Papua New Guinea has lifted its multi-year freeze on new carbon projects, marking a pivotal moment for forestry and land-use initiatives in the region.
Finally, Singapore is ramping up its search for high-quality, correspondingly adjusted carbon credits, reflecting the growing demand for internationally transferable mitigation outcomes (ITMOs) under Article 6.
Paraguay unveils its carbon market regulations
The Paraguayan Ministry of Environment & Sustainable Development, and Ministry of Industry and Commerce (MIC) announced the adoption of Paraguay’s new carbon market law. The newly adopted Law 7190/23, first passed on September 20 2023, and enacted by President Santiago Pe?a on October 21th, 2023 by the National Congress. It enshrines the following few decrees into law:
NDC 3.0 Status: As of February 2025, Paraguay has not yet to publish its NDC 3.0. The previous NDC, submitted in July 2021, commits to a 10% unconditional reduction in greenhouse gas emissions compared to the business-as-usual scenario by 2030, with an additional 10% reduction conditional on receiving international support.
Low prices: Paraguay estimated bid prices remain low, with the majority of project activities? (173) recording prices between $3.00 - $6.00 USD per tonne. Market participants aim to align with compliance carbon market prices, with the Minister of Industry and Commerce targeting regulated prices between $40.00 - $70.00 USD per tonne (Source: Carbon Pulse).?
For full information, refer to the Carbon Pulse article here: https://carbon-pulse.com/370301/.
First Forestry and Land Use Project is registered in Papua New Guinea, following a 3 year freeze
Afforestation/Reforestation (ARR) project GSR23142, developed by project developer Morobe Markham, was given the greenlight to register in the country following a two-year moratorium on carbon projects. The freeze came in light of the country having an absence of a regulatory framework, which would guide carbon market regulations in the country.
The Morobe Markham Reforestation project is a first-of-its-kind reforestation project in the Markham Valley of Morobe Province, Papua New Guinea. It is a partnership between Morobe Markham LLC, the developing partner with extensive experience managing emission reduction projects in Papua New Guinea, PNG Carbon Estate, a team of expert local foresters and plantation experts, and Nature Focus Capital, an experienced funder and manager of carbon emission reduction projects.
What happened
Papua New Guinea has banned or halted the registration of new carbon offset projects twice: once in the mid-2010s, and again in the early 2020s. In each case, the government cited concerns about unregulated “carbon cowboy” schemes, and the need for proper oversight before allowing carbon credit deals. The first moratorium was formalized by the adoption of the Climate Change (Management) Act, which designated the state as the sole authority over REDD+ and carbon offset projects. Private carbon project registrations were not permitted without government approval, as regulated UN-REDD frameworks were favoured. Since then, Papua New Guinea has focused on developing a national REDD+ strategy and under the Climate Change Management Act (Source: DevPolicy.org).
The second suspension, due to concerns over missing key details, overstating deforestation threats and improper conduct in facilitating 100-year contracts with villages without proper consent.?
In late 2024, officials indicated the ban would be lifted after more than two years, once a robust regulatory framework had been adopted (Source: Carbon Market Watch).
On March 2, 2022, Papua New Guinea’s climate change minister, Wera Mori, announced a moratorium on new REDD+ projects, with the intention of establishing a regulatory framework for existing voluntary projects. Since then, the Ministry of Environment, Conservation and Climate Change has upheld a de-facto moratorium on new project registrations.?
Why this matters
The 2022-2023 moratorium halted dozens of pending carbon offset deals, signalling to investors that no new projects could proceed until new regulations were put in place. The environment ministry’s public statement said the moratorium would allow “a proper stock take and audit” of existing voluntary carbon projects and give time to craft robust rules. Minister Mori and other officials stressed two main concerns: safeguarding local communities’ rights and ensuring PNG’s climate goals aren’t undermined. In announcing the ban, Mori aimed to highlight the lack of an acceptable benefit-sharing arrangement for landowners and the absence of a national carbon market framework.
Papua New Guinea has shown engagement in developing cooperative measures under Article 6 of the Paris Agreement, having signed a bilateral agreement with Singapore in December 2023, as well as an MOU with Japan for cooperation under the Joint Crediting Mechanism (JCM) in 2022.
ITMO buyers of credits are on the move, supply remains low
Singapore’s search for correspondingly adjusted credits
In September 2024, Singapore's Prime Minister's Office issued a Request for Proposal (RFP) seeking to procure at least 0.5 million metric tons of high-quality, correspondingly adjusted carbon credits derived from nature-based solutions. These credits are intended to contribute towards Singapore's Nationally Determined Contribution (NDC) under the Paris Agreement, aiming to reduce emissions to approximately 60 million metric tons of CO? equivalent by 2030. (Source: Opisnet)
The tender attracted significant interest, with 17 suppliers, including major global traders and carbon project developers, submitting offers totaling nearly $1 billion. Notably, commodities giant Trafigura made the largest financial offer in this tender. (Source: Carbon Pulse, QC Intel).
To ensure environmental integrity and avoid double counting, Singapore has established Implementation Agreements (IAs) with partner countries. These agreements set the bilateral framework for the international transfer of correspondingly adjusted carbon credits, detailing processes such as project authorization, reporting requirements, and corresponding adjustments. As of February 2025, Singapore has signed IAs with countries including Ghana and Papua New Guinea. (Source: Carbon Markets Cooperation).
The RFP process has undergone multiple extensions, with the submission deadline initially set for November 2024, then extended to January 17, 2025, and subsequently to February 14, 2025. The evaluation of proposals is currently underway, with the total procurement volume to be determined after a thorough assessment of the submissions. (Source: Opisnet)
This initiative underscores Singapore's commitment to leveraging international carbon markets to meet its climate targets and positions the city-state as a proactive participant in government-led Article 6 transactions under the Paris Agreement.
Singapore allows companies liable for the carbon tax to offset up to 5% of their taxable emissions using high-quality international carbon credits (ICCs) starting from 2024. These ICCs must comply with Article 6 of the Paris Agreement and adhere to seven principles ensuring high environmental integrity. This approach aims to cushion the impact on businesses, stimulate local demand for quality carbon credits, and promote the development of regulated carbon markets.
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