SINGAPORE Trends and Developments Contributed by: Priyank Srivastava, Shelton M. Vaughan, Ramiro Rodriguez and Colette Tan, Duane Morris & Selvam LLP
en the timeline or complicate the process for M&A transactions involving regulated entities. We have been advising an increasing number of clients on sanctions-related issues, with many introducing additional compliance checklists and approval layers as part of their internal review processes. Our inter- national offices bring extensive expertise in advising on the implications of sanctions and other regulatory measures, as well as on the broader commercial and contractual impacts arising from geopolitical events including matters involving force majeure, frustration, and related risk management strategies. Carbon Credit Trading and Singapore’s Role As sustainability-linked products gain prominence, trading in RECs, carbon credits and green derivatives is becoming increasingly popular. Singapore’s focus on high-quality projects could see it build credibility as a reliable player and standard setter in the market for carbon credit trading. Last year, Singapore’s Econom- ic Development Board and the International Emissions Trading Association launched the Singapore Carbon Market Alliance, the first platform in Singapore aimed at helping companies obtain access to high-quality, Article 6-aligned carbon credits. Complementing this, under Singapore’s carbon tax regime, companies are allowed to use eligible international carbon credits to offset up to 5% of their taxable emissions. Singapore has also established infrastructure-sup- porting carbon credit trading. Through a joint ven- ture, the Singapore Exchange (SGX), DBS, Standard Chartered and Temasek have developed Climate Impact X (CIX), a global exchange and marketplace for high-quality carbon credits. CIX aims to address criticisms that many projects lack integrity or do not lead to meaningful reductions in emissions by thor- oughly vetting projects listed on its marketplace. We have advised companies on the trading of RECs, and expect to see growing participation in this space as corporates seek credible, efficient avenues to meet their sustainability commitments. Singapore likewise sourced high-quality projects in securing its first tranche of carbon credits recent- ly. In September 2025, the Singapore government announced that it would contract 2.175 million tonnes
worth of high-quality nature-based carbon credits from four projects in Ghana, Peru and Paraguay. The Singapore government intends to launch another call for proposals to find other high-quality carbon credits later this year. Singapore’s carbon credit trading ecosystem is expected to influence energy and infrastructure M&A. Investors are increasingly likely to assess the potential recurring revenue from selling or retiring credits and incorporate carbon assets in deal valuation. Coupled with increased regulatory oversight over investments in energy companies as discussed above, investors may also include as conditions precedent or condi- tions subsequent targets to implement credible decar- bonisation strategies. Companies providing support or ancillary services for carbon credit trading are also likely to attract more investments. Increasing use of Virtual Power Purchase Agreements Power purchase agreements (PPAs) for renewable energy have grown in popularity as they grant pur- chasers access to green energy at a predefined, sta- ble rate for a long-term period. Singapore is regarded as one of the most solar-dense cities in the world and, coupled with its lack of other resources, solar energy remains the main source of locally regener- ated renewable energy. As renewable energy adop- tion accelerates, we have advised on an increasing number of PPAs over diverse projects in recent years. A common use of PPAs is where a property owner contracts a solar developer who installs and oper- ates a solar project on the owner’s site and sells the electricity generated by the solar panels to the owner. This helps the property owner meet their sustainability goals. However, the installation of solar photovoltaic systems in Singapore is limited by land constraints and the energy generated by the solar project may fall short of the energy required by the property owner. As a result, more companies have been turning to vir- tual PPAs (VPPAs) to meet their sustainability goals. Under VPPAs, the developer does not deliver electric- ity to the property owner’s grid. Instead, the property owner receives environmental attributes associated
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