In all, the carbon tax currently covers 80% of our total GHG emissions from about 50 facilities in the manufacturing, power, waste, and water sectors. This is aligned with the United Nations Framework Convention on Climate Change (UNFCCC) and its Katowice rulebook, which requires all parties to include NF 3 in the reporting of their national emissions inventory by 2024. From 2024 onwards, the carbon tax coverage will be expanded to include nitrogen trifluoride (NF 3) emissions. It currently covers six GHGs, namely carbon dioxide (CO 2), methane (CH 4), nitrous oxide (N 2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF 6). The carbon tax is levied on facilities that directly emit at least 25,000 tCO 2e of greenhouse gas (GHG) emissions annually. The carbon tax coverage will also be expanded to include Nitrogen Trifluoride (NF 3) from 2024 onwards. The list of GHGs and their GWP values will be updated in line with newer standards adopted by the Intergovernmental Panel on Climate Change (IPCC). Updates to list of Greenhouse Gas (GHG) and associated Global Warming Potential (GWP) values Similar frameworks have been implemented in other jurisdictions with carbon pricing schemes, including the EU, South Korea, and California. These transitory allowances are limited to only a portion of companies’ emissions, and the amount awarded to eligible facilities will also be reviewed regularly. To drive our industry towards becoming best-in-class, the amount of allowances awarded to each facility will be determined based on their performance on internationally-recognised efficiency benchmarks where available, or facilities’ decarbonisation plans. The framework will also help to mitigate the risk of carbon leakage. All international carbon credits used under the carbon tax regime will need to adhere to a set of eligibility criteria, to ensure that they are of high environmental integrity and compliant with Article 6 of the Paris Agreement.Ī transition framework will also be introduced to provide support for existing emissions-intensive trade-exposed (EITE) companies as they work to reduce emissions and invest in cleaner technologies, while managing the near-term impact on business competitiveness. This will cushion the impact for companies that are able to source for credible carbon credits in a cost-effective manner, help to create local demand for high-quality carbon credits, and catalyse the development of well-functioning and regulated carbon markets. The revenue will be used to support decarbonisation efforts and the transition to a green economy, and cushion the impact on businesses and households.Ĭompanies may use high quality international carbon credits to offset up to 5% of their taxable emissions from 2024. The Government does not expect to derive additional revenue from the carbon tax increase in this decade. It also helps businesses remain competitive in a low-carbon future, by enhancing the business case to invest in low-carbon solutions, and ensuring that new investments and economic activities are aligned with our national climate goals. The revised carbon tax trajectory is critical in enabling the pace of transformation needed to achieve our raised climate ambition and make the economy- and society-wide transition to a low-carbon future. This will strengthen the price signal and impetus for businesses and individuals to reduce their carbon footprint in line with national climate goals. To support our net zero target, the carbon tax will be raised to S$25/tCO 2e in 20, and S$45/tCO 2e in 20, with a view to reaching S$50-80/tCO 2e by 2030. Key Updates to Singapore’s Carbon Tax Post-2023 (Effective from 1 January 2024) The carbon tax level was set at S$5/tCO 2e for the first five years from 2019 to 2023 to provide a transitional period for emitters to adjust. Singapore implemented a carbon tax, the first carbon pricing scheme in Southeast Asia, on 1 January 2019.
The carbon tax forms part of Singapore’s comprehensive suite of mitigation measures to support the transition to a low-carbon economy.Ĭarbon Tax in Singapore from 2019 to 2023 In all, the carbon tax currently covers 80% of our total greenhouse gas (GHG) emissions from about 50 facilities in the manufacturing, power, waste, and water sectors. Singapore’s carbon tax underpins our net zero targets and climate mitigation efforts by providing an effective economic signal to steer producers and consumers away from carbon-intensive goods and services, hold businesses accountable for their emissions, and enhance the business case for the development of low-carbon solutions.
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