Singapore's carbon tax under the Carbon Pricing Act

Singapore taxes the direct greenhouse gas emissions of large industrial facilities under the Carbon Pricing Act. The scheme is administered by the National Environment Agency (NEA), which registers facilities, receives their Emissions Reports and accredits the verifiers who check them.¹²

A note on sourcing: every figure and duty below is cited to NEA’s own carbon tax pages. The Act’s text on Singapore Statutes Online was read while preparing this article but is not listed as a source, because that site refuses non-browser clients and a reader following the citation could not rely on reaching it; NEA, as the administering agency, states the same sectors, thresholds, rates, offset limit and verification duties.

What it is

NEA states that the carbon tax was introduced through the Carbon Pricing Act (CPA) and its accompanying Regulations on 1 January 2019, and that a set of CPA amendments and amended Regulations came into effect on 1 January 2024.¹ The scheme runs at facility level and turns on three steps: registration with NEA once a threshold is attained, an annual Emissions Report, and, for taxable facilities, third-party verification of that report.¹²

The tax applies to industrial facilities with annual direct GHG emissions of at least 25,000 tCO2e.¹ Rates are set per tonne and step up over time: $5 per tonne for 2019 to 2023, $25 per tonne in 2024 and 2025, and $45 per tonne in 2026 and 2027, with a view to reaching $50 to $80 per tonne by 2030.¹

Who it binds

NEA states that the CPA applies to business facilities in three groups of activity: manufacturing and manufacturing-related services; the supply of electricity, gas, steam, compressed air and chilled water for air-conditioning; and water supply, sewage and waste management.¹ That sector list is the scheme’s outer boundary as NEA describes it.¹

The covered gases are carbon dioxide, methane, nitrous oxide, sulphur hexafluoride, nitrogen trifluoride, hydrofluorocarbons and perfluorocarbons, and NEA specifies them as direct emissions — from fuel combustion and from industrial processes and product use.¹

The duties fall on the registered corporation: NEA states that it is the registered corporation that engages the verifier and submits each taxable facility’s Emissions Report.²

Thresholds

There are two, and they do different things. NEA states that the first reckonable emissions threshold of 2,000 tCO2e triggers registration as a reportable facility, and the second threshold of 25,000 tCO2e triggers registration as a taxable facility.¹ A reportable facility reports; a taxable facility reports, has its report verified and pays the tax.¹²

A third limit governs offsets. NEA states that from 1 January 2024 taxable facilities may use eligible international carbon credits to offset up to 5% of their taxable emissions.¹ Unutilised offset quota from emissions year 2025 may be rolled over to emissions year 2026 with a credit conversion factor of 25/45 — the ratio of the two rates.¹ Separately, NEA states that from 2024 a transition framework of allowances administered by EDB gives existing emissions-intensive trade-exposed companies more time to adjust.¹

Dates

Registration follows the year in which a threshold is attained: NEA states that a facility attaining a threshold must register by 30 June of the year following the trigger year.¹

The annual cycle then runs to the same date. NEA states that a registered corporation must engage an NEA-accredited third-party verifier to verify each taxable facility’s Emissions Report annually, before submitting that report to NEA by 30 June of the year following the end of each reporting period.² Verification is therefore not a step that can be left until after filing — the verified report is what gets filed.

The rate schedule is the other calendar to plan against: $25 per tonne in 2024 and 2025 rising to $45 per tonne in 2026 and 2027, with a stated view to $50 to $80 per tonne by 2030.¹

Verification standard

Third-party verification applies to taxable facilities. NEA states that only reckonable GHG emissions are subject to third-party verification, so the verifier’s opinion covers the emissions figure the tax is computed on rather than the whole of a facility’s environmental reporting.²

The verifier itself is regulated. NEA states that any Singapore-registered company wishing to provide CPA verification services must be accredited by NEA, and it lists accredited external auditors by sector: complex sectors — refining of oil and gas and large-scale chemicals, other chemicals, and semiconductors — and non-complex sectors.² Those lists are published by sector group rather than as a single roll, so a facility can see which group a given accredited auditor appears under.²

What an organisation on ESGOS can do

An organisation operating a Singapore facility can find its listing in the directory and claim it from its profile page, or get listed and attach the evidence this regime produces: registration as a reportable or taxable facility, a verified Emissions Report, the identity of the accredited verifier, and the paid carbon price for a given emissions year. That last item travels: a documented domestic carbon price is the fact an EU importer asks about when the same goods enter the carbon border adjustment mechanism. The verifiers directory lists accredited verification bodies drawn from national accreditation registers. The exposure check at /en/exposure-check shows which regimes reach a given product and market.

Footnotes

1. Carbon Tax (Carbon Pricing Act — rates, thresholds, regulated facilities), National Environment Agency. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵

2. Verification and Accreditation Requirements (Carbon Pricing Act), National Environment Agency. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸