Singapore to Raise Carbon Tax in Phases, Starting in 2024
SINGAPORE: As the country prepares for a gradual increase in the carbon tax beginning in 2024, the government has called on households and businesses to evaluate their energy usage and take steps to reduce emissions. The upcoming carbon tax hike, part of the Carbon Pricing (Amendment) Bill passed in Parliament on November 8, will see the tax rise from S$5 per tonne of greenhouse gas emissions to S$25 in 2024, with further increases planned through to 2030.
The government is committed to supporting households, particularly those in lower-income brackets or living in smaller flats, to offset the financial impact of this change. Minister for Sustainability and the Environment, Grace Fu, emphasised that this support would not be blanket assistance, but instead would target those most affected by the rising costs.
“For some households, the government’s intervention will provide relief, but the aim is also to incentivise a reduction in energy consumption,” said Ms Fu. “We are focused on reducing overall emissions and driving energy efficiency.”
While businesses will be given time to adjust to the carbon tax increase, certain industries, including those that are high emitters but critical to the economy, such as petrochemicals, will receive allowances to help them manage the transition. Ms Fu explained that businesses should start taking proactive steps now to reduce their emissions in preparation for the higher tax rates.
“We will not be offering businesses a free pass,” she stated. “The emphasis is on encouraging them to make significant progress in reducing their carbon footprints, and there will be a framework in place to help guide the process.”
Despite global challenges such as inflation and geopolitical tensions, Ms Fu affirmed that the government’s commitment to tackling climate change remains unwavering. “We must act now, as the climate crisis is already at our doorstep,” she urged, highlighting that current global warming is already having severe consequences.
While the journey toward cleaner energy may be lengthy and complex, the government aims to ensure that the transition is inclusive, giving all sectors the time and resources they need to adapt.
With the carbon tax increasing over time, the government will closely monitor the impact on both businesses and households and adjust support as necessary to help Singapore meet its climate goals while minimising economic disruptions.
