28 March 2018

On 20 March 2018, the Carbon Pricing Bill (“Bill”) was passed in Parliament. The Bill imposes a carbon tax on certain greenhouse gas emissions (“GHG emissions”) of business facilities, measured from 2019 onwards. The Bill also imposes obligations concerning the reporting of GHG emissions of business facilities, in place of the obligations currently in the Energy Conservation Act (“ECA”).


At Budget 2017, the Government announced plans to implement a carbon tax from 2019. The proposed carbon tax is part of a suite of measures that will help Singapore meet its commitments under the Paris Agreement of the United Nations Framework Convention on Climate Change (UNFCCC) where Singapore has pledged to reduce its emissions intensity by 36% from 2005 levels by 2030, and to stabilise emissions with the aim of peaking around 2030.

The key features of the Bill are set out below

Scope of the Bill

The Bill identifies the persons and business facilities that must be registered under the Bill. Generally, facilities from the manufacturing, power generation, water supply and waste management sectors will be covered. The definition of the term “business facility” has been refined in the Bill (from the definition under the ECA) to refer to a single site where a business activity that involves the emission of greenhouse gases and forms a single undertaking or enterprise is carried out.

The persons having operational control over the facility must be registered under the Bill, and will be responsible for fulfilling the obligations under the Bill. Such “persons” can be a company or other legal person.

The Bill encourages companies to consider the synergies across plants, in order to reap greater emissions reduction and improve resource efficiency, by allowing for business activities carried out at two or more parcels of land separated from one another to be treated in certain circumstances as activities carried out at one site. This will also lower compliance costs as only one emissions report needs to be submitted for a single business facility spanning multiple premises.

The Bill imposes obligations in relation to two types of facilities:

  1. Taxable facilities: Facilities which emit 25,000 metric tonnes and above of carbon dioxide-equivalent of GHG emissions annually. Such facilities will have to undertake more rigorous measurement, reporting and verification processes under the Bill, and will have a carbon tax imposed on their GHG emissions.
  2. Reportable facilities: Facilities which emit at least 2,000 but less than 25,000 metric tonnes of carbon dioxide-equivalent of GHG emissions annually. These facilities must have their GHG emissions measured and reported but will not be taxed.

To manage compliance costs for companies, the Bill builds on the existing requirements in the ECA. Similar to the ECA, the Carbon Pricing Act will be administered by the National Environment Agency (“NEA”).

Measurement, reporting and verification (“MRV”)

For reportable facilities, the measurement and reporting requirements under the Bill will be similar to their existing ECA reporting practices, whereas taxable facilities will be required to adhere to a more stringent set of MRV requirements. Emissions reports for taxable facilities must be submitted annually based on a monitoring plan. The registered person having operational control of a taxable facility will also be required to engage a qualified independent third party, accredited by NEA, to verify the emissions reports.


The carbon tax details are set out in Part 5 of the Bill. The carbon tax rate will start at S$5 per tonne of GHG emissions and will be applied uniformly and without exemption. It will take the form of a fixed-price credits-based mechanism. This means registered persons will pay the carbon tax by surrendering carbon credits equivalent to their carbon tax liability. These carbon credits can only be bought from NEA at a fixed price. It is intended that the carbon tax rate will be raised to between S$10 to S$15 by 2030.

Coverage of GHG emissions

The carbon tax will be levied on the direct emissions of the six types of greenhouse gases which Singapore is required to report under the United Nations Framework Convention on Climate Change. The Bill includes a list of GHG emissions which are excluded from the carbon tax, such as those emitted from fire extinguishers. Although the excluded GHG emissions are not taxed under the Bill, registered persons must still measure and report data as stipulated in the Bill for the excluded GHG emissions.


The penalties set out in the Bill for taxable facilities relating to reporting and tax payment have been pegged to the equivalent penalties for fraud and tax evasion in the Income Tax Act.

Reference materials

The Bill is available from the Parliament website www.parliament.gov.sg or by clicking here.


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