Singapore-Asia Taxonomy for Sustainable Finance: the green, amber and red system

What a taxonomy is, and why the amber category matters

A taxonomy is a classification system that says which economic activities count as green, and on what evidence. Without one, "green loan" and "sustainable fund" mean whatever the seller says they mean.

Most taxonomies are binary: an activity meets the threshold or it does not. That works in an economy that is already mostly clean. It works badly in Asia, where a great deal of economic activity is high-emitting today but could be much less so with investment. A binary taxonomy tells that activity it is ineligible, which means capital does not flow to the emissions reductions that would make the biggest difference.

The Singapore-Asia Taxonomy's answer is a traffic light:

• Green - activities contributing substantially to climate change mitigation by operating at near-zero emissions, or on a pathway to net zero by 2050 (described as 1.5C-aligned)
• Amber (transition) - activities that do not meet green thresholds now, but are either transitioning towards green within a defined time frame, or enabling significant emissions reductions in the short term
• Red / ineligible - activities not currently eligible. MAS expressly notes that ineligible does not always indicate significant harm

Amber thresholds carry a sunset date, commonly 2030, with some exceptions for hard-to-abate industrial sectors. This is the design feature that keeps amber honest: it is a transition category with an expiry, not a permanent easier tier.

A second mechanism, the measures-based approach, encourages capital investment in decarbonisation measures or processes that reduce emissions intensity so an activity can meet green criteria over time.

The eight sectors

1. Energy
2. Real Estate
3. Transportation
4. Agriculture and Forestry / Land Use
5. Industrial
6. Information and Communication Technology
7. Waste / Circular Economy
8. Carbon Capture and Sequestration

Together these account for around 90 per cent of the region's greenhouse gas emissions.

Example of an amber threshold: in maritime, vessels aligned with the 2023 International Maritime Organization Greenhouse Gas Strategy target of net zero by or around 2050, with intermediate targets of at least 20 per cent (striving for 30 per cent) emissions reduction by 2030 against 2008 levels.

Coal phase-out criteria

The taxonomy was the first to set criteria for the early managed phase-out of coal-fired power plants. The problem it addresses is stark: coal accounts for almost 60 per cent of power generation in the Asia-Pacific region, and Asia's coal fleet averages under 15 years old, so plants have decades of contracted life left and no commercial reason to close.

Criteria were consulted on separately in 2023 as the fourth GFIT taxonomy consultation. Based on the consultation materials - and these specific parameters should be confirmed against the current taxonomy document before being relied on commercially - a managed phase-out is treated as taxonomy-aligned only where the plant is phased out by 2040 and does not exceed a total operating duration of 25 years, the electricity is fully replaced with clean energy within the same grid, there is a just transition plan for workers and the local community, and emissions savings are verifiable. The criteria apply at both facility level and plant-owner (entity) level.

Who built it, and how

Developed by the Green Finance Industry Taskforce (GFIT), convened by MAS from November 2019 to April 2023, through four rounds of public consultation. It was launched at COP28 on 3 December 2023.

Interoperability with other taxonomies

A taxonomy that no one else recognises helps nobody. MAS has been mapping the Singapore-Asia Taxonomy to the International Platform on Sustainable Finance's Common Ground Taxonomy (which covers the EU Taxonomy and the People's Bank of China's Green Bond Endorsed Project Catalogue), and works with the PBOC through the Singapore-China Green Finance Taskforce, whose fourth annual meeting was held in Nanning on 17 September 2026. Singapore also participates in the ASEAN Taxonomy and the G20 Sustainable Finance Working Group.

The traffic-light approach GFIT proposed has since been adopted by the ASEAN Taxonomy and other regional taxonomies.

How it is used in practice

• MAS has published an Information Note on the Application of the Singapore-Asia Taxonomy in the Financial and Corporate Sectors, documenting how market participants have adopted it.
• Alignment with the taxonomy's transition category is a condition of eligibility for MAS's Sustainable Bond and Sustainable Loan Grant Schemes when the instrument is a transition bond or transition loan.
• The taxonomy is reviewed periodically to keep pace with science and technology.

The full taxonomy document is available from MAS at https://www.mas.gov.sg/-/media/mas-media-library/development/sustainable-finance/singaporeasia-taxonomy-updated.pdf