Summary
Details
- Singapore
Singapore Carbon Pricing Act sets carbon tax, reporting and credit-use obligations for covered facilities.
Companies not directly covered may still voluntarily use internal carbon pricing, carbon credit procurement or emissions reduction strategies to prepare for supply-chain and investor expectations.
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What’s Required
1. Facility registration
Covered business facilities must register where they meet the applicable emissions thresholds. The Act includes obligations to apply for registration as a registered person and to register business facilities as reportable or taxable facilities.
2. Emissions monitoring and reporting
Covered facilities must prepare emissions reports and monitoring plans. The Act contains provisions on inaccuracies in emissions reports and monitoring plans, including where issues are identified by the National Environment Agency or the registered person.
Companies need strong internal systems for:
Facility-level emissions data.
Monitoring plans.
Verification processes.
Fuel and process emissions calculations.
Recordkeeping.
Data corrections.
Compliance calendars.
3. Carbon tax payment
Taxable facilities must pay carbon tax on chargeable emissions. The Act provides for tax payment and penalties, and includes rules for fixed-price carbon credits and eligible international carbon credits.
4. Use of eligible international carbon credits
From 2024, taxable facilities may use eligible international carbon credits to offset part of their taxable emissions, subject to Singapore’s rules. The National Environment Agency notes that legislative amendments came into effect on 1 January 2024 and that guidance covers eligibility criteria, sourcing and surrender of eligible international carbon credits for carbon tax payment.
5. Allowances and registry requirements
The Act includes provisions on allowances, fixed-price carbon credits, international carbon credits and registry accounts. These rules create administrative and accounting obligations for companies using credits or allowances under the framework.
Important Deadlines
2018: Carbon Pricing Act enacted.
1 January 2024: Amendments linked to international carbon credits and updated tax framework came into effect.
2024 to 2025: Carbon tax set at S$25/tCO₂e.
2026 to 2027: Carbon tax scheduled at S$45/tCO₂e.
By 2030: Singapore expects the carbon tax to reach S$50 to S$80/tCO₂e.
Current Status
The Carbon Pricing Act is active. Singapore’s current policy pathway increases the carbon tax in stages and allows the use of eligible international carbon credits under defined conditions.
Penalties for Non-Compliance
Possible consequences include:
Penalties for unpaid tax.
Enforcement action for inaccurate reports or monitoring plans.
Registry restrictions.
Loss of ability to use credits if eligibility conditions are not met.
Reputational risk from poor carbon management.
Increased compliance costs as the tax rate rises.
Examples of Known Violations / Failure Modes
Typical failure modes include:
Missing registration obligations.
Weak facility emissions data.
Inaccurate monitoring plans.
Late carbon tax payment.
Using ineligible international carbon credits.
Confusing voluntary offset purchases with tax compliance.
Poor recordkeeping for surrendered credits.
Underestimating exposure to the 2026 and 2030 price trajectory.
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