Singapore, 15 November 2024 – As an official knowledge partner of the Transition Credits Coalition (TRACTION) group, Asia Carbon Institute (ACI) congratulates the group on the release of its interim report and is pleased to contribute to two workstreams focused on establishing the necessary foundation for developing a transition credit market.

The interim report’s release is both insightful and timely, addressing the urgent need for sustainable energy solutions. The identification of high-integrity attributes for transition credits establishes a robust framework that can serve as a valuable guide for future initiatives, not only in Asia but also in other regions globally. Furthermore, the report elaborates on practical risk mitigation solutions, which are critical for enhancing transaction feasibility and attracting investment. The inclusion of a roadmap leading to a final report at COP30 signifies a long-term commitment to refining the transition credit framework based on ongoing insights and stakeholder engagement.

On 14 November 2024, the TRACTION, launched by the Monetary Authority of Singapore (MAS), released an interim report that emphasises the importance of integrity, scalability, and demand in utilising transition credits to facilitate the early retirement of coal-fired power plants (CFPPs).

Key insights from the interim report are as follows:

• Four essential attributes defining high-integrity transition credits have been identified: demonstration of additionality, permanent emission reductions, robust verification, and support for just transition.
• To scale transition credit transactions effectively, the TRACTION suggests risk mitigation solutions addressing potential challenges such as timing mismatches and project delays, along with innovative financial tools like carbon credit insurance and advance market commitments.
• It is of essence to understand the motivations of buyers—compliance, voluntary, and investment. Voluntary buyers prefer credits aligned with their operational regions.

The TRACTION’s interim report is available for download at https://www.mas.gov.sg/-/media/mas-media-library/development/sustainable-finance/traction—interim-report—final.pdf.