Demonstrating alignment with the TSC in the absence of required data

Financiers may encounter cases where borrowers lack data required by the Technical Screening Criteria (TSC) in the Singapore-Asia Taxonomy (SAT). This includes existing assets with limited lifecycle emissions data, new assets still under construction, or assets under acquisition. Proxy data, verified estimates, and third-party assessments may be used in such cases. Databases such as IPCC, GHG Protocol, and G-RES are recommended for reference. SSFA advises financiers to document assumptions and obtain borrower attestations. Post-financing, borrowers should provide operational data to validate earlier assumptions.

Navigating the amber TSC and labelling post sunset

Amber activities are time-bound and expected to transition to green within specified periods. Sunset dates and more stringent TSC over time ensure climate alignment. Financiers are encouraged to adopt risk-based assessments and require science-based, externally validated transition plans. Flexibility is recommended, including a 12–36 month grace period if interim thresholds are not met. After sunset dates, no asset may be classified as transition unless it meets green thresholds. For example, electricity generation must meet a ≤100gCO₂e/kWh lifecycle emissions threshold from 2036 onwards.

Grandfathering rules and provisions in the SAT

Grandfathering provisions allow previously committed or allocated financing to retain its classification under earlier SAT criteria. Unallocated or uncommitted amounts have a 7-year grace period to align with updated TSC. This rule applies equally to green and transition instruments and portfolios. Disclosure of taxonomy versions and steps towards updated criteria is recommended. While in-force instruments are not subject to reclassification upon TSC updates, refinanced instruments should be reassessed against prevailing criteria.

Assessing entity-level transition plans

For some activities—such as in hard-to-abate sectors, sea transport, and early coal phase-out—the SAT requires borrowers to provide Paris-aligned entity-level transition plans. Financiers may use second-party opinions (SPOs), third-party assessments (e.g., from Moody’s, MSCI, S&P), or internal frameworks to evaluate these plans. Key evaluation areas include science-based targets, credible business transformation strategies, investment plans, board oversight, and public disclosures. Borrowers without formal plans may still qualify if they demonstrate practical, verifiable actions aligned with decarbonisation goals.

Distinguishing between amber and amber (measures)

Amber criteria apply to activities transitioning within a defined timeline. Amber (measures) refer to specific interventions or technologies that reduce emissions and support eventual green alignment. This is relevant in hard-to-abate sectors such as aviation and shipping. For example, sustainable aviation fuel (SAF) facilities and feedstock supply can qualify as amber (measures) even if activity-level thresholds are not present.

Transition financing referencing the SAT where the projects do not meet all the TSC

Projects not fully meeting the SAT due to regional or technical constraints may still qualify for transition financing if they enable significant short-term emissions reductions or demonstrate progress towards green alignment. Financiers are advised to mitigate transition-washing risks through independent reviews and clear documentation. For instance, CO₂ transportation projects aiming to reduce leakage rates may qualify even if current performance exceeds SAT thresholds.

Accounting for commercially unavailable technologies

Due to the limited availability of CCS/CCUS in Southeast Asia, alternative methods achieving comparable GHG reductions may be accepted. Financiers should request third-party verification or use proxies where necessary. Examples include fossil fuel plants retrofitted with alternative low-emission technologies or iron and steel facilities achieving 20% reductions without CCUS, though these would not be SAT-aligned.

Applying the amber category to new assets

The SAT generally excludes new projects from amber classification unless explicitly stated. Exceptions include certain power plants, vessels, and industrial facilities. Financiers may still consider new assets for transition financing if they meet TSC, have no material negative climate impact, avoid carbon lock-in, and can transition to green within the designated timeframe. Independent reviews are recommended.

Recognising enabling and value chain activities that support green and transition activities in the SAT

The SAT does not explicitly include all enabling or value chain activities. However, such activities—e.g., EV charging infrastructure or hydrogen production equipment—can support transition goals. Financiers should ensure funds are ring-fenced, traceable, and provide attributable environmental benefits. Transition financing must avoid carbon lock-in and follow sunset dates relevant to the corresponding activity. DNSH principles and ESG due diligence should also be applied.