Tracking Carbon Tax Revenue Allocation Across Decarbonisation, Business Transition and Household Support, and Mechanism for Independent Oversight

Mr Gabriel Lam asked the Minister for Sustainability and the Environment (a) what percentage of the carbon tax revenue collected since 2024 has been channelled to (i) facilitate the development of decarbonisation solutions (ii) support businesses' shift to new low-carbon and more energy-efficient solutions and (iii) cushion the impact on households; (b) whether there is an independent mechanism to track the distributional impact of such revenue; and (c) if not, whether such a mechanism will be established.

Ms Grace Fu Hai Yien: The Government channels carbon tax revenue towards facilitating the development of decarbonisation solutions which require significant capital investment and supporting businesses' shift to new low-carbon and more energy efficient solutions.

Expenditures on decarbonisation and energy efficient solutions, thus far, comprise almost a quarter of carbon tax revenue collected since 2019. This includes support for manufacturing facilities and data centres under the Resource Efficiency Grant for Emissions (REG(E)), for them to undertake eligible projects that improve their energy efficiency and reduce emissions. We expect expenditures on decarbonisation to increase to support the implementation of future decarbonisation measures that are currently still in development and catalyse the development of nascent low-carbon technologies.

The tracking of the collection and expenditure of the carbon tax revenue is managed internally by the relevant Government agencies, like other taxes and fees. There is no intention to set up a separate tracking mechanism.