PARTICIPATING IN GLOBAL EFFORTS
As a responsible member of the global community, Singapore has pledged to reduce our greenhouse gas emissions
by 16% below Business-as-Usual levels in 2020. The pledge, announced in 2010 ahead of the UNFCCC Climate
Change Conference in Copenhagen, was conditional on a legally binding global agreement.
We also ratified the UN Framework Convention on Climate Change in 1997 and acceded to the Kyoto Protocol in
SWITCHING TO LESS CARBON INTENSIVE FUELS
Out of the many types of fossil fuels, natural gas emits 40% less carbon dioxide than fuel oil for every unit
of electricity generated.
Over the years Singapore has switched from fuel oil to using more natural gas. This means we can continue to
power Singapore while emitting less carbon than we would have, using fuel oil.
IMPROVING OUR ENERGY EFFICIENCY
Aside from power generation, we are also working to become "energy efficient". Energy efficiency means
achieving more while consuming less.
The Efficiency Programme Office (E2PO) drives energy efficiency across many
different types of activities. For example, the use of public transport is encouraged, allowing Singaporeans
to get from place to place while using relatively less energy.
The carbon tax is an important step to sustain our clean, green and liveable environment, and to help us transform into a low-carbon economy. It complements the suite of measures that Singapore is undertaking to fight climate change, and will help us meet our commitments under the Paris Agreement, where we pledged to reduce our emissions intensity by 36% from 2005 levels by 2030, and to stabilise our emissions with the aim of peaking around 2030.
The Minister for Finance announced at Budget 2017, Singapore’s plan to introduce a carbon tax from 2019. The tax will be applied on facilities that emit more than 25,000 tCO2e of emissions annually, and cover the six greenhouse gases (GHGs) that Singapore currently reports to the United Nations Framework Convention on Climate Change (UNFCCC) as part of our national GHG inventory.
The carbon tax will put in place a uniform and economy-wide price signal to incentivise emitters to reduce their emissions, while giving them the flexibility to take action in the most economically efficient way. To give the industry more time to adjust and implement energy efficiency projects, the tax will start at $5/tCO2e in the first instance, from 2019 to 2023. The Government will review the tax rate by 2023. We intend to increase the tax to between $10-$15/ tCO2e by 2030. In doing so, we will take into account international climate change developments, the progress of our emissions mitigation efforts, and our economic competitiveness.
The first payment of the carbon tax will be in 2020, based on emissions in calendar year 2019. The impact on households and most businesses will be small, leading to an increase of around 1% in electricity prices. An additional $20 in the annual U-Save Rebates will be provided to all eligible HDB households over a period of 3 years, starting from 2019, to offset the expected increase in utilities expenses. The Government will also enhance support for companies, including SMEs and power generation companies, to improve energy efficiency.
Carbon Pricing Bill
The Carbon Pricing Bill was passed on 20 March 2018 and will give effect to the carbon tax in 2019 once in force. The Bill sets out the overall carbon tax framework and obligations for large GHG emitters, including the measurement, reporting and verification (MRV) requirements.
The Bill will also provide powers for the Minister of the Environment and Water Resources to make and amend related regulations for matters such as the MRV requirements for affected facilities.
You may view the Bill here.
Public consultations were held as part of engagement efforts by Government agencies to consult stakeholders on the carbon tax. Summaries of the consultations can be found below:
Frequently Asked Questions