(Bloomberg) -- Companies in Singapore can tap a larger pool of carbon credits to offset up to 5% of their taxable emissions after the city-state signed a bilateral agreement with Ghana. 

Ghana is the second country after Papua New Guinea to strike a partnership with Singapore on carbon credits cooperation, according to a statement from the Prime Minister’s Office. 

Starting this year, firms in Singapore are subject to a carbon tax, set at S$25 ($18.56) per ton of carbon dioxide-equivalent. Access to carbon credits generated abroad will help firms in the city-state offset taxable emissions and meet their climate goals. 

The agreement is aligned with Article 6 of the Paris accord, which sets out a market-based mechanism that regulates and adds transparency to the global transfer of carbon credits. 

Under the partnership, developers of eligible projects must contribute 5% of their share of proceeds from authorized carbon credits toward climate adaption in Ghana. 

Separately, Ghana also signed a carbon credit transfer agreement with Sweden, according to state-owned Ghana News Agency. 

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