Budget 2022: Carbon tax to go up 5 times to S$25 per tonne in 2024, as Govt aims for net-zero emissions around mid-century
SINGAPORE — Singapore’s carbon tax will be raised to S$25 per tonne of greenhouse gas emissions in 2024, up from S$5 per tonne at present, as the Government seeks to achieve net zero emission by around the mid-century, Finance Minister Lawrence Wong said on Friday (Feb 18).
SINGAPORE — Singapore’s carbon tax will be raised to S$25 per tonne of greenhouse gas emissions in 2024, up from S$5 per tonne at present, as the Government is now seeking to achieve net zero emission by around the mid-century, Finance Minister Lawrence Wong said on Friday (Feb 18).
This will lead to an increase of about S$4 per month in utility bills for an average household living in a four-room Housing and Development Board flat, though additional rebates in the form of GST Vouchers will be provided to cushion the impact, he added.
In his Budget speech, Mr Wong said the carbon tax will be further increased progressively to S$45 per tonne in 2026, with a view to reach S$50 to S$80 per tonne by 2030.
This comes as Singapore has set itself more ambitious targets for reducing its carbon emissions. Previously, the Republic had aimed to peak emissions by 2030 and halve them by 2050, before reducing to net zero in the second half of the century.
Singapore now aims to achieve net zero emissions by around the mid-century, Mr Wong announced on Friday.
“When we introduced the carbon tax in 2019, we kept the initial tax low — at S$5 per tonne of emissions — to give businesses time to adjust. To move decisively to achieve our new net zero ambition, we will need a higher carbon tax,” Mr Wong said.
He added that the Government will not impose an additional carbon tax on the use of petrol, diesel and compressed natural gas.
“These already have excise duties that encourage users to moderate their fuel consumption and hence emissions. We will continue to review and adjust these fuel excise duties periodically.”
Mr Wong said that the Government does not expect to derive additional revenue from the increase in carbon tax.
Some of the revenue will be used to cushion the impact on households and businesses, while a large part will be used in investments into new low-carbon and more energy-efficient solutions that will help bring Singapore closer to its net zero goal.
To help households and companies transition to the higher carbon tax, the Government will introduce the following measures:
- Additional GST voucher U-Save utilities rebates will be provided to households. More details will be announced next year
- From 2024, businesses can use high quality, international carbon credits to offset up to 5 per cent of their taxable emissions, in lieu of paying carbon tax
- A new transition framework to help emissions-intensive, trade-exposed sectors manage near-term impact on business competitiveness. This will provide eligible companies with allowances for a share of their emissions, based on efficiency standards and decarbonisation targets
- Support for companies to invest in energy efficiency and decarbonisation solutions