As per reports, Singapore is the 26th largest carbon emitter in the world. While the number may not seem significant at first glance, accounting for Singapore’s small land area reveals an urgent need for the government to step in. The government’s solution? Using Carbon Tax as a tool to reduce emission and fight against climate change.
Under the ‘Paris Climate Agreement ‘, the implementation of such tax serves to create a ‘price signal’ for large-scale industries and motivate them to reduce carbon emissions for certain incentives.
The Carbon Tax will take effect starting from 2019 and it is expected to affect the large-scale polluters significantly. The tax rate is fixed at $5 per tonne for the period of 5 years from the year 2019 and is expected to increase to $10-$15 per tonne by the year 2030.
The biggest bearer of the carbon tax rest on the shoulders of large emitters responsible for producing more than 25,000 tonnes of greenhouse gas annually. This exclusively targets approximately 30-40 companies who are responsible for around 80% of Singapore’s greenhouse gas emission.

What does it mean for companies

It’s time for green companies to shine, and for polluting companies to make changes.

The carbon tax was implemented with the main goal of pushing Singapore towards achieving sustainable growth. Other than for deterrence purposes, tax collected from polluting companies will also be used to provide energy-efficiency and energy-management incentives.
In addition, the carbon tax means greater investment towards green industries and job creation. Eco-conscious companies such as Gashub will play an increasingly important role in sharing its expertise and help guide other companies in their efforts to adopt greener business practices. Such dynamics will eventually drive Singapore towards a future where our current oil-dominated economy will be replaced by cleaner resources.

How will the Carbon Tax affect households?

While Mr. Heng Swee Keat reassured its people that this tax will not directly affect households, engaging in a more in-depth analysis highlights possible indirect effects. Studies revealed that household expenses of electricity and gas are expected to increase by up to 1%. This is likely due to the passing of higher day to day operating cost from the top polluting companies to their consumers.

While it appears that the implementation of a Carbon Tax means nothing but bad news, there is no need to worry. There are existing government policies in place that can help to relieve the increase in cost.

Introduced in 2012, the permanent U-Save GST voucher serves to help HDB households offset part of their utility bills. Households will receive rebates of up to $380 annually, depending on their HDB flat type.

Corporations have already stepped in to play their part to contribute towards Singapore’s sustainability goal. What about you? You have an equally important role in this movement too!

Just by making the switch towards greener electricity providers, you not only provide support for companies to go green but you also stand to gain from doing so by benefitting from lower utility bills!

Singapore’s journey towards a more sustainable future will require the help of both companies and households. Speak to us and find out more about how you can be part of this movement towards a cleaner and greener Singapore.