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Singapore's carbon tax to rise five-fold in 2024

20 February, 2022 Singapore will increase its carbon tax fivefold to S$25 ($18.60) a tonne in 2024, Finance Minister Lawrence Wong said, in an attempt to meet its zero-emissions target by around 2050.


The city state, a major Asian oil refining and petrochemical export centre, plans to increase the carbon tax further to S$45 in 2026 and 2027, and S$50 to S$80 by 2030, Wong said in a budget speech. From 2024, businesses will be allowed to buy international carbon credits to offset up to 5% of their taxable emissions, he added. "This will moderate the impact for companies," Wong said. "It will also help to create local demand for high-quality carbon credits and catalyse the development of well-functioning and regulated carbon markets."


Carbon credits are certified instruments to represent emission reductions at climate action projects and are traded by companies to offset emissions elsewhere. Singapore, the first country in Southeast Asia to introduce a carbon pricing scheme, implemented its carbon tax in 2019. The country's carbon tax applies to all facilities producing 25,000 tonnes or more of greenhouse gas emissions annually, which include oil refineries and power plants.


A spokesperson from Shell said the carbon price should apply to as many sectors of the economy as possible and the company expects the price to increase over time as energy transition progresses.


($1 = 1.3439 Singapore dollars)