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Singapore Expected To Hike Carbon Tax In 2022 Budget

Thursday, January 20, 2022

Singapore's Minister of Finance has said Singapore will set out plans to hike its carbon tax in the 2022 Budget.

The Minister for Finance, Lawrence Wong, was replying to a question posed in parliament on the Government's ongoing consultations on carbon tax reform.

Singapore implemented a carbon tax – the first carbon pricing scheme in Southeast Asia – on January 1, 2019. It is applied uniformly to all sectors including energy-intensive and trade-exposed sectors, without exemption.

The carbon tax rate is set at SGP5 per ton of carbon dioxide equivalent emitted, which is to apply until 2023. It applies to direct emissions from facilities emitting 25 ktCO2e or more in a year, covering carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbons and perfluorocarbons.

Wong was asked in parliament "what are the ongoing and planned public consultation activities for seeking the views of businesses and the people on Singapore's post-2023 carbon tax level and trajectory."

He replied: "Our agencies have been consulting the public on the carbon tax review over the past six months, as part of engagements under the Singapore Green Plan 2030. The conversations have touched on the need for a higher carbon tax and the trade-offs involved in our green transition. In the lead-up to Budget 2022, the public can also provide their feedback through platforms such as REACH and the People's Association (PA)."

"The Government is engaging businesses on the potential impact of a higher carbon tax, and how we can support them in the shift towards lower-carbon operations and pursuit of green growth opportunities. We are also speaking to other stakeholders such as environment groups on the green transition."

"Feedback received from these consultations will be taken into consideration in the carbon tax review. The Government will announce the revised post-2023 carbon tax level at Budget 2022," he said.