Carbon tax allowances 'not a free pass' for continuing emissions

Climate change secretariat says allowances cover only a proportion of firms' emissions

- Shabana Begum

Allowances given to defray some large companies' carbon tax are not a free pass for them to continue emitting greenhouse gases, said the National Climate Change Secretariat (NCCS).

Such allowances cover only a proportion of their emissions, and eligible facilities must have credible net-zero decarbonisation plans, NCCS said in a statement late on Sept 9.

The secretariat was responding to queries from The Straits Times after environment groups released an open letter to the Government earlier on Sept 9, calling for more transparency on tax "discounts" given to some large emitters here.

They also pressed for more clarity on how much the carbon tax will be raised by from 2028.

Singapore's carbon tax was first raised from $5 per tonne of carbon dioxide (CO2) emissions to $25 per tonne in 2024 and 2025.

Alongside the tax increase, eligible companies here that face strong competition globally have been granted carbon tax "discounts" in the form of allowances. Such companies may be in the chemicals, electronics and biomedical manufacturing sectors.

There are about 50 carbon tax-paying facilities in Singapore, mainly in the manufacturing, power, waste and water sectors. These emitters are responsible for about 70 per cent of the total national emissions.

It is not clear how many firms have received the carbon tax discounts or what the quantum of the allowances is.

The open letter questioned the tax policy's effectiveness, fairness and transparency.

In response, NCCS said the allowances were meant to support trade-exposed companies in their green transition and prevent them from moving to other countries without carbon taxes.