Singapore’s carbon tax rose to S$45 per tonne of carbon dioxide equivalent effective January 1, 2026, up from S$25 in 2024-2025. The increase is part of Singapore’s progressive carbon pricing pathway, which aims to reach S$50-80 per tonne by 2030.
Carbon Pricing Trajectory
The carbon tax was first introduced in 2019 at S$5 per tonne. It rose to S$25 in 2024-2025 before the latest increase. The government has signaled that the tax will continue to rise through the end of the decade to maintain a credible price signal for decarbonization.
Impact on Businesses
The tax applies to facilities that emit 25,000 tonnes or more of CO2 equivalent annually. As announced in Budget 2026, carbon tax-paying firms can carry over unused offsets from previous years amid limited international carbon credit supply. The government is also exploring bilateral carbon credit trading agreements with partner countries.
Industry Response
Business groups have expressed concern about competitiveness impacts, particularly for energy-intensive trade-exposed sectors. The government has responded with transition support measures including energy efficiency grants and sector-specific decarbonization roadmaps. Singapore is positioning itself as a carbon services hub for the Asia-Pacific region.
Source: National Climate Change Secretariat, Business Times
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