Singapore to Raise Carbon Tax Fivefold in 2024

Singapore has priced its carbon tax at SGD25 (USD18.6) per ton for 2024 and 2025, a major increase from the 2019-2023 levels of SGD5 (USD3.71) per ton, as reported by Strait Times on February 18. According to Singapore’s FY22 Budget Statement, the carbon tax will increase to SGD45 (USD33.4) per ton in 2026 and 2027, before reaching SGD50 to SGD80 (USD37.1 to USD59.4) by 2030. Singapore’s Finance Minister Lawrence Wong explained that taxing carbon emissions in phases could provide more certainty to businesses. In comparison, Japan and South Korea respectively price their carbon taxes at around USD2.65 and USD11.68 per ton currently, while the EU imposes carbon duties of over USD77.96 per ton.

Singapore’s current carbon tax applies to all facilities that emit 25,000 tons or more greenhouse gas (GHG) annually, including oil refineries and power plants. In response to the carbon tax rise, Singapore’s largest oil refiner ExxonMobil [XOM:US] said the move prompts investments to reduce GHG emissions and subsidize businesses developing decarbonization technologies. The company has committed to reaching net-zero emissions from its operating assets by 2050, going ahead of Singapore’s goal of halving its 2030 peak GHG emissions by 2050 and realizing zero emissions as soon as possible in the second half of the century.

Sources:

https://www.straitstimes.com/singapore/budget-2022-singapores-carbon-tax-could-increase-to-80-per-tonne-of-emissions-by-2030-in-accelerated-net-zero-emissions-bid

https://www.sciencedirect.com/science/article/pii/S266604902100058X

https://www.oecd.org/tax/tax-policy/carbon-pricing-korea.pdf

https://www.dw.com/en/carbon-borer-tax-co2-eu-europe-global-south/a-59987093

https://www.reuters.com/markets/commodities/singapore-hike-carbon-tax-by-five-fold-2024-2022-02-18/