“Getting large carbon emitters to pay $5 for every tonne of greenhouse gases they generate is a “fair” way to start a compliance regime,” said Minister for the Environment and Water Resources Masagos Zulkifli.
From next year till 2023, all facilities producing 25,000 tonnes or more of greenhouse gas emissions a year will be taxed $5 per tonne of emissions – significantly lower than the $10 to $20 per tonne envisioned last year.
However, the Government will review the tax rate in 2023, and eventually increase the carbon tax to between $10 and $15 per tonne by 2030.
Mr Masagos called the starting $5 per tonne a “fair amount”, which gives the affected 30 to 40 companies – which contribute 80% of Singapore’s greenhouse gas emissions – time to “adjust and also get used to the compliance regime”.
He added that the transition period will allow the affected companies – mainly from the petroleum refining, chemicals and semiconductor sectors – to be better placed to comply with the higher tax rates to be imposed by 2030.
A carbon tax is a common tool used to control the amount of earth-warming greenhouse gases released into the atmosphere.
About 67 countries and jurisdictions, including China, the European Union and Japan, have implemented or announced plans to implement such a scheme. They aim to encourage companies to reduce their greenhouse gas emissions and improve energy efficiency.
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Source: The Straits Times, 23 February 2018