Carbon

Carbon Tax

Singapore's carbon tax, implemented in 2019 as Southeast Asia's first carbon pricing scheme, covers approximately 70% of the nation's greenhouse gas emissions across 50 facilities in manufacturing, power, waste, and water sectors. This serves as an economic signal to shift producers and consumers away from carbon-intensive goods and services, ensures businesses take responsibility for their carbon footprint, and encourages investment in low-carbon alternatives. 

Initially set at S$5/tCO2e from 2019-2023, the tax increased to S$25/tCO2e in 2024 and will rise to S$45/tCO2e in 2026-2027, targeting S$50-80/tCO2e by 2030 to support net-zero goals. The government expects no additional net revenue from increases, with proceeds funding decarbonisation measures and supporting businesses and households during the transition to a low-carbon economy. 

Companies may use high-quality international carbon credits to offset up to 5% of taxable emissions from 2024, while a transition framework provides allowances for emissions-intensive trade-exposed companies. 

Carbon Capture and Storage (CCS)

Carbon capture and storage (CCS) offers a decarbonisation pathway for hard-to-abate sectors such as the chemicals sector. Singapore aims to achieve at least 2 million tons per annum of carbon abatement through CCS by 2030.

The Government is studying the feasibility of a cross-border CCS project. In March 2024, the Government appointed S-Hub, an industry consortium comprising ExxonMobil and Shell, to assist with the study.

MTI is working with S-Hub to engage emitters and potential service providers to form the CCS value chain and understand the costs associated with CCS.

As Singapore does not have suitable geological resources, we are also partnering countries in the region, such as Australia, Indonesia and Malaysia, which have strong potential for carbon dioxide storage, to explore cross-border CCS. At the same time, we also engage countries to exchange views on CCS technologies, and policies to support CCS. 

Carbon Markets

MTI’s carbon markets initiatives include developing and reviewing carbon mitigation strategies and policies, with particular focus on carbon credit measures outlined in Singapore’s Long-term Emissions Development Strategy and plans to achieve Singapore's 2030 Nationally Determined Contributions.

MTI designs and implements robust sourcing strategies and develops implementation plans to meet our climate targets. Additionally, MTI builds strategic partnerships with private sector organisations, international and multilateral bodies, and like-minded countries to secure carbon credits compliant with Article 6 of the Paris Agreement. For more information, please access Singapore's Carbon Markets Cooperation website.