MAS Launches Coalition and Announces Pilots to Develop Transition Credits for the Early Retirement of Asia’s Coal Plants
Singapore, 4 December 2023… The Monetary Authority of Singapore (MAS) today announced the launch of the Transition Credits Coalition (TRACTION) and two pilot projects to test the use of high-integrity transition credits in transactions for the early retirement of coal-fired power plants (CFPPs).
2 Supported by close to 30 members and knowledge partners across key stakeholder groups, TRACTION will study the challenges and propose solutions to scale the early retirement of CFPPs in Asia through high-integrity carbon credits. Pilot projects will be separately undertaken to test the feasibility of integrating transition credits for early CFPP retirement. TRACTION and the pilot projects will build on the concepts laid out in the jointly published by MAS and McKinsey & Company in September 2023.
3 Transition credits are high-integrity carbon credits generated from the emissions reduced through retiring a CFPP early and replacing this with clean energy sources. They serve as a complementary financing instrument to reduce the economic gap
4 A whole-of-system approach is needed to develop transition credits into a viable market solution. TRACTION, comprising members and knowledge partners from carbon credit services, energy financing, project development, risk management and non-governmental organisations, will identify system-wide barriers and develop solutions for transition credits to be utilised as a credible financing instrument. These include identifying robust crediting approaches that can be applied to regulated and deregulated electricity markets, mitigating risks of non-delivery of credits, and exploring avenues to build buyers’ confidence in transition credits. TRACTION will conduct its work over a two-year period. See for a list of the members and knowledge partners. (120.1 KB)
5 MAS announced two pilot projects to explore and test the practicality of different approaches in integrating high-integrity transition credits in the early retirement of CFPPs. The pilot projects are in collaboration with –
- ACEN Corporation and Coal-to-Clean Credit Initiative
For information on the Coal-to-Clean Credit Initiative, please see:, to accelerate the retirement of the South Luzon Thermal Energy Corporation coal plant in Philippines. Climate Smart Ventures, an advisory firm focused on energy transition, will be coordinating the project; and
- the Asian Development Bank (ADB), which is advising the Government of Philippines over the retirement of a coal plant in Mindanao under its Energy Transition Mechanism
More information about ADB’s Energy Transmission Mechanism can be found here:.
While TRACTION members and partners will not be directly involved in any pilot transactions, insights from these pilots will contribute to TRACTION’s work in examining the possible standardisation of approaches that can be replicated across markets.
6 Mr Leong Sing Chiong, Deputy Managing Director (Markets & Development), MAS, said, “We must take an ecosystem approach to address the complexities of energy transition. The strong support for TRACTION is a testament that the market sees the importance of exploring the potential of carbon financing as a complementary mechanism to finance energy transition in Asia. MAS is excited to be collaborating with our partners to assess the practicality and viability of integrating transition credits via the two pilot transactions. Through TRACTION and learnings from the pilot transactions, we hope to support the region in scaling the early retirement of CFPPs.”
MAS launched the Singapore-Asia Taxonomy for Sustainable Finance (Singapore-Asia Taxonomy) – which sets out detailed thresholds and criteria for defining green and transition activities that contribute to climate change mitigation across eight focus sectors.
MAS has launched Gprnt, an integrated digital platform that harnesses technology to simplify how the financial sector and real economy collect, access and act upon environmental, social and governance (ESG) data to support their sustainability initiatives.
At the 2023 Global Insurance Forum, Mr Lawrence Wong, Deputy Prime Minister, Minster for Finance and Chairman of the Monetary Authority of Singapore, shared how the insurance industry can further deepen its value to society by supporting the transition to net-zero, harnessing technology particularly artificial intelligence, and developing the talent needed to make these possible.