Singapore sets tougher net-zero emissions target

: Emissions, Hydrogen
22/02/18

Singapore has brought forward its target to achieve net-zero carbon emissions to around mid-century, through a big increase in its carbon tax and encouraging the adoption of electric vehicles (EVs).

Singapore announced a commitment two years ago to achieve peak emissions by 2030 and reach net-zero emissions as soon as viable in the second half of this century.

"With advances in technology and new opportunities for international collaboration in areas like carbon markets, we believe we can bring forward our net-zero timeline," finance minister Lawrence Wong said as he announced the country's 2022 budget today. "We will therefore raise our ambition to achieve net-zero emissions by or around mid-century."

The most significant step towards accelerating Singapore's transition towards net-zero emissions is a sharp increase in the country's carbon tax rate. The carbon tax will be raised from S$5/t ($3.70/t) currently to S$25/t in 2024-25 and S$45/t in 2026-27, Wong said today. The tax rate will be reviewed with a long-term view of increasing it to S$50-80/t by 2030.

A transition framework will be implemented in 2024 to provide companies with allowances for a share of their emissions, given the significant increase in the tax, Wong said. The allowances, which will be determined by efficiency standards and decarbonisation targets, will help to mitigate the impact on business costs while still encouraging decarbonisation, he said.

The carbon tax is applied to some of Singapore's biggest emitters, including much of the country's export-oriented refining and petrochemical sector.

Businesses will be allowed to use "high quality international carbon credits" from 2024 to offset up to 5pc of their taxable emissions, in lieu of paying the carbon tax. "This will help create local demand for high-quality carbon credits and catalyse the development of well-functioning and regulated carbon markets," said Wong.

Singapore is also looking to a higher uptake of EVs to drive its green transition. The government is maintaining its current policy of a zero-growth rate for private vehicles and has provided incentives for the adoption of EVs.

The share of EVs in new car registrations has jumped from just 0.2pc in 2020 to around 4pc last year, Wong said. "We will further accelerate EV adoption by building more charging points... To do this, infrastructure upgrades will be necessary, and the financing can come from green bonds," he added.

Singapore also expects to see a greening of traditional sectors of the economy like aviation, energy and tourism over the next decade. "As a key node for international air and sea transport networks, we can become a frontrunner in the development of sustainable aviation and marine fuels," Wong said.

The Civil Aviation Authority of Singapore this week signed an agreement with Changi Airport, aircraft manufacturer Airbus and industrial gas firm Linde to study hydrogen's use as an aviation fuel and for ground operations at Changi Airport.

Singapore also launched a pilot scheme this year to use sustainable aviation fuel at Changi Airport. The year-long programme is expected to reduce about 2,500t of CO2 emissions.

By Prethika Nair

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25/05/02

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South Australia closes Hydrogen Power SA office

25/05/02

South Australia closes Hydrogen Power SA office

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Australia's Coalition eyes power, resource funding cuts

25/05/02

Australia's Coalition eyes power, resource funding cuts

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US bill would extend expired biofuel credits

25/05/01

US bill would extend expired biofuel credits

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Brazil's energy transition spending drops in 2024

25/04/30

Brazil's energy transition spending drops in 2024

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