In joining the global fight against climate change, Singapore has raised its climate ambitions to achieve net zero emissions by or around mid-century. In this regard, the Singapore Government stated in the Budget 2022 that it intends to, among other things: (i) raise the carbon tax progressively from 2024; (ii) introduce a transition framework to give eligible companies in emissions-intensive trade-exposed sectors more time to adjust to a low-carbon economy; and (iii) provide companies with the option to use eligible international carbon credits instead of paying carbon tax for up to 5% of their taxable emissions from 2024 onwards.
The carbon tax regime in Singapore is governed under the Carbon Pricing Act 2018 (“CPA“) that provides for, among other things, requirements relating to registration, reporting and payment of tax in relation to greenhouse gas emissions. To give effect to the proposed changes to the carbon tax regime in order to meet Singapore’s climate goals, legislative changes are being proposed to the CPA. These proposed changes are set out in the draft Carbon Pricing (Amendment) Bill (“Bill“), which the Ministry of Sustainability and the Environment is seeking feedback on through a public consultation exercise from 8 July 2022 to 5 August 2022.
In this Update, we outline key proposed changes in the Bill.
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