Anticipated Revenue from Increase in Carbon Tax to $25 Per Tonne of Emission

Ms Foo Mee Har asked the Minister for Sustainability and the Environment regarding the increase in carbon tax to $25 per tonne of emission in 2024 (a) how much revenue is anticipated to be collected from the increase in carbon tax; (b) what key decarbonisation efforts have taken place as a result of the increase in carbon tax; and (c) whether the current plan to increase the carbon tax to $45 per tonne of emission remains set for 2026.

Ms Grace Fu Hai Yien: The carbon tax revenues are published annually in the Revenue and Expenditure Estimates (Budget Book). The Government is refining the carbon tax revenue estimate for Emission Year 2024 and will publish it in the Budget Book 2025.

The carbon tax provides an economy-wide price signal and impetus to improve energy- and carbon-efficiency in all sectors and enhances the business case to invest in low-carbon solutions. It is a key part of Singapore’s comprehensive suite of mitigation measures and underpins the implementation of other decarbonisation initiatives.

The Government does not expect to derive any additional net revenue from the carbon tax increase within this decade. The revenue will be channelled to facilitate the development of decarbonisation solutions which require significant capital investment, support businesses’ shift to new low-carbon and more energy-efficient solutions and cushion the impact on households.

Singapore remains on track to raise the carbon tax rate to $45 per tonne of emissions in 2026 to support our net-zero emissions target by 2050.