Question to the HM Treasury:

To ask the Chancellor for the Exchequer, what assessment her Department has made of the potential impact of the discussions on transition credits at the 10th UK-Singapore Financial Dialogue with Strengthened Collaboration in Digital Finance & Innovation and Sustainable Finance, which took place on 2 July 2025, on the UK’s regulatory approach to voluntary carbon markets.

The UK-Singapore Financial Dialogue took place on 2 July 2025. Both the UK and Singapore recognised the importance of collaborating to promote high-integrity carbon markets. The use of transition credits to support emissions reductions in hard-to-abate sectors was discussed between both countries.

As co-chair of the Powering Past Coal Alliance, the UK supports the work of the France-Indonesia co-led Coal Transition Commission that recognises the potential of transition credits to accelerate coal plant closures as part of a possible solution set. If designed and executed properly, transition credit methodologies could help bridge the financial gap that often hinders early retirement of coal plants in emerging markets and developing economies, while supporting a just transition for affected communities.

A consultation on steps Government could take to raise integrity and scale in voluntary carbon markets closed on July 10. It sought views on how the UK’s Principles for Carbon and Nature Market Integrity, announced by the Chancellor last year, could be put into practice.