On July 8, 2022, Singapore’s Ministry of Sustainability and Environment (MSE) released the Carbon Pricing (Amendment) Bill 2022 and began soliciting comments. The bill will codify the gradual increase in carbon taxes and the use of international carbon credits from 2024 onwards announced by the government in the 2022 budget. As before, taxable facilities are those that emitted 25,000 tons or more of GHG in the previous year (calendar year) on a CO2 equivalent basis. The period for soliciting comments is until August 5, 2022.
Principal amendments in the bill
- Amendment to carbon tax rate. Currently set at 5 SGD per tonne of CO2 equivalent , it will be raised to 25 SGD in 2024 and 2025, and 45 SGD after 2026.
- In order to give emissions-intensive trade-exposed (EITE) companies time to adjust to a low-carbon economy, the bill newly establishes an emission allowance to reduce the carbon tax.
- The bill provides the option to use government-certified “international carbon credits” instead of fixed-price carbon credits to pay the carbon tax.
- The bill amends the registration and emissions reporting obligations (especially when the facility’s management control is transferred).