The Carbon Pricing Act and Singapore's carbon tax

What the tax is and who pays it

The Carbon Pricing Act 2018 created Singapore's carbon tax, which took effect on 1 January 2019. It was amended by the Carbon Pricing (Amendment) Act 2022. The policy owner is the Ministry of Sustainability and the Environment (MSE); the National Environment Agency (NEA) administers it.

"tCO2e" means tonnes of carbon dioxide equivalent - a common unit that converts all greenhouse gases into the amount of carbon dioxide that would cause the same warming, so that methane, nitrous oxide and the rest can be added into one number.

A facility pays the tax if it directly emits 25,000 tCO2e or more per year. "Directly" matters: this is Scope 1 only, meaning emissions from what the facility itself burns or releases. Electricity bought from the grid is not taxed at the buyer - it is taxed at the power station.

Around 50 facilities are caught, spread across manufacturing, power generation, waste and water. Together they account for roughly 70 per cent of Singapore's total greenhouse gas emissions. Counting fuel excise duties on transport fuels as well, around 80 per cent of national emissions carry some form of carbon price.

The six gases covered are the standard basket: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

The rate, and where it is going

The S$45 rate took effect on 1 January 2026 and was confirmed in the Budget Statement delivered on 12 February 2026: "The tax has just been raised to $45 per tonne for this year and next, and the plan is to reach $50 to $80 per tonne by 2030."

The same Budget added an important caveat. If global climate momentum weakens, Singapore "may need to position ourselves towards the lower end of the $50 to $80 per tonne range by 2030". In a Parliamentary reply on 5 August 2026, Deputy Prime Minister Gan Kim Yong confirmed the Government is reviewing the trajectory for 2028 and beyond, and will announce future rates in advance, weighing progress on decarbonisation technology, the cost impact on business, and international developments.

For a company doing investment appraisal, the planning point is that the direction is firmly upward but the 2030 end-point is a range, not a number.

Important: the headline rate is not what every facility pays

There are no sectoral carve-outs - no industry is exempt from coverage. But that is not the same as saying every facility faces the same effective price.

Emissions-intensive trade-exposed (EITE) facilities receive transitory allowances under the Transition Framework, which cover part of their emissions. Taxable facilities may also surrender eligible International Carbon Credits against up to 5 per cent of taxable emissions. Both are covered in their own entries on this site, and both reduce the effective price a given facility pays.

If you are modelling the cost to a specific Singapore facility, the headline rate is your starting point, not your answer.

Paying, and appealing

Facilities report through NEA's Emissions Data Monitoring and Analysis (EDMA) system; the measurement and reporting mechanics have their own entry on this site, including the lower 2,000 tCO2e reporting tier that catches many more facilities than the tax does.

A registered person may appeal an NEA decision to the Minister within 30 days. Appealable decisions include a refusal to deregister a facility and the approval of emissions reports.

The legislation itself is on Singapore Statutes Online at https://sso.agc.gov.sg/Act/CPA2018. Policy enquiries go to [email protected].

Penalties

Penalties for non-compliance were not confirmed against a primary source during research and are therefore not stated here. Read the Act directly, or take advice, before assuming what they are.