24 February, 2018
It was announced in the Singapore Budget on 19 February 2018 that Singapore will introduce the planned carbon tax from 2019 to encourage power stations and other large emitters to reduce emissions. This is in part the Government's response to its commitments under the Paris Climate Accord.
The proposed carbon tax will be at the rate of $5 per tonne of greenhouse gas emissions from 2019 to 2023 and it will be levied on all facilities that produce a minimum of 25,000 tonnes of greenhouse emissions in a year.
Facilities will have to pay such tax on their total emissions if they meet or exceed the threshold and the first payment will be due in 2020 based on emissions in 2019.
According to the Finance Minister, the carbon tax will apply uniformly to all sectors without exemption.
"This is the economically efficient way – to maintain a transparent, fair and consistent carbon price across the economy to incentivise emissions reduction."
The carbon tax will bring in nearly S$1 billion in revenue in the first five years, but the government is prepared to spend more than this amount in the same period to help companies improve energy efficiency and reduce emissions.
For further information, please contact:
Sandra Seah, Partner, Bird & Bird
sandra.seah@twobirds.com
