Singapore Carbon Pricing Act (CPA)
ENFORCEMENT TIMELINE
Enacted 2019
Overview
Singapore's Carbon Pricing Act (CPA), administered by the National Environment Agency (NEA), is Southeast Asia's first carbon taxation system, requiring large emitters (direct emission facilities) emitting 25,000 tCO₂e or more per year to pay a carbon tax.
The tax started at S$5/tCO₂e when it took effect in 2019, but a phased rate increase roadmap has been set to achieve the 2030 climate targets:
- 2019–2023: S$5/tCO₂e
- 2024–2025: S$25/tCO₂e
- 2026–2027: S$45/tCO₂e
- 2030 target: S$50–S$80/tCO₂e
From 2024, businesses are permitted to offset up to 5% of their tax liability using approved International Carbon Credits (ICCs).
Enforcement Timeline
2019: Carbon Pricing Act took effect; initial rate of S$5/tCO2e.
2024–2025: Rate raised to S$25/tCO2e.
2026–2027: Rate scheduled to be phased up to S$45/tCO2e.
2030: Target of raising the rate to S$50–S$80/tCO2e.
Business Impact
Japanese companies with petrochemical, refining, large-scale data centre, or precision manufacturing operations in Singapore face substantially higher carbon costs as the rate rises to S$25/t in 2024 and further to S$45/t in 2026. Upgrading to energy-efficient equipment, adopting low-carbon processes, and making use of the 5% ICC credit allowance have become top management priorities.