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Impact of Climate Change & Adaptation Measures
Singapore's Nationally Determined Contribution
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What is the expected impact on businesses under the carbon tax?
The increase in operating cost from a S$10-20/tCO
e carbon tax is equivalent to a US$3.5-7.0/bbl increase in crude oil prices. This represents a 6.4% to 12.7% increase from current oil prices, compared to historical quarterly oil price fluctuations which have ranged from -29% to +35% from 2011 to 2016. Companies will receive greater support for industrial energy efficiency. Possible forms of support include increasing awareness of energy efficiency improvement opportunities, enhancing existing energy efficiency incentives, and providing capability-building for companies to put in place better energy management systems. The government will study modes of assistance to help businesses with the transition. Views from companies and the public will be sought via ongoing industry consultations and public consultations which will begin in March 2017.
Who will be covered under the carbon tax?
The carbon tax will generally be applied upstream, for example, on power stations and other large direct emitters. For stationary emissions, the government is looking at a proposed threshold of 25,000 tCO
e of greenhouse gas (GHG) emissions annually. This is equivalent to emissions produced by the annual electricity consumption of 12,500 HDB 4-room households. Based on current data, there are around 30-40 of such large direct emitters.
What is the expected impact of the carbon tax on households?
e carbon tax is equivalent to a rise in electricity prices of 0.43-0.86 cents/kWh. This represents a 2.1% to 4.3% increase from current electricity tariffs. For the median household living in a 4-room flat who pays around $72 per month in electricity bills, the carbon tax translates to an increase of $1.70 to $3.30 per month. For comparison, historically, quarterly electricity prices have fluctuated up to 10% between 2010 and 2016. The government will monitor the overall impact on households. We also hope that more households can adopt energy efficient practices. For example, purchasing a 3-tick instead of a 1-tick refrigerator saves households around $6.25 per month. The National Environment Agency website has more
tips on how households can save energy at home
What are the greenhouse gases covered under the carbon tax?
The six greenhouse gases that will be covered under the carbon tax are: carbon dioxide (CO
), methane (CH
), nitrous oxide (N
O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF
What is the role of the carbon tax in Singapore’s mitigation strategy?
Singapore's Climate Action Plan sets out four strategies to achieve our pledge: (i) improving energy efficiency, (ii) reducing carbon emissions from power generation, (iii) developing and deploying cutting-edge low-carbon technologies, and (iv) encouraging collective action among government agencies, individuals, businesses, and the community.
A carbon tax will enhance Singapore's existing and planned mitigation efforts under our Climate Action Plan, and stimulate clean technology and market innovation. A tax on greenhouse gas (GHG) emissions will incentivise emitters to factor in the costs of their GHG emissions in their business decisions. This would encourage companies to improve their energy efficiency and innovate to reduce their GHG emissions.
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