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Carbon Tax

Updated: Feb 5

Carbon Tax

Here is some information about the Carbon Tax in Singapore:

What is the Carbon Tax?

The carbon tax is a tax levied on greenhouse gas (GHG) emissions. It is a market-based instrument that aims to reduce GHG emissions by increasing the cost of polluting. The revenue collected from the carbon tax is used to support decarbonisation efforts, the transition to a green economy, and to cushion the impact on businesses and households.

Who is covered under the Carbon Tax?

The carbon tax is levied on facilities that directly emit at least 25,000 tonnes of carbon dioxide equivalent (tCO2e) of greenhouse gas (GHG) emissions annually. It currently covers six GHGs, namely carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).

What is the current Carbon Tax rate?

The current carbon tax rate is S$25 per tonne of CO2e. This rate was increased from S$5 per tonne of CO2e on 1 January 2024. The carbon tax rate is scheduled to increase to S$45 per tonne of CO2e in 2026 and 2027, with a view to reaching S$50-80 per tonne of CO2e by 2030.

How is the Carbon Tax collected?

The carbon tax is collected from the owners or operators of facilities that are subject to the tax. The tax is calculated based on the facility's annual GHG emissions.

What are the impacts of the Carbon Tax?

The carbon tax is expected to have a number of impacts, including:

  • Reducing GHG emissions from facilities that are subject to the tax

  • Encouraging businesses to invest in low-carbon technologies

  • Raising awareness of climate change and the need to take action

What are the criticisms of the Carbon Tax?

Some criticisms of the carbon tax include:

  • It may disproportionately impact certain sectors of the economy, such as energy-intensive industries.

  • It may be difficult to administer and enforce.

  • It may not be effective in reducing emissions if it is not set at a high enough level.

Overall, the Carbon Tax is a key policy instrument that is being used by the Singapore government to reduce GHG emissions and transition to a low-carbon economy.

How Bestar can Help

Bestar can help companies in Singapore comply with and manage the Carbon Tax in a number of ways:


  • Carbon footprint assessment: Bestar can help companies quantify their greenhouse gas emissions to determine if they fall under the Carbon Tax threshold. This involves collecting data on energy consumption, fuel use, and other relevant activities that generate emissions.

  • Registration and reporting: Bestar can assist companies with registration for the Carbon Tax and ensure accurate and timely reporting to the authorities. This includes preparing and submitting the required forms and documentation.


  • Carbon tax planning and budgeting: Bestar can help companies develop strategies to minimize their Carbon Tax liability. This may involve identifying and implementing emission reduction measures, as well as exploring opportunities to offset unavoidable emissions.

  • Carbon offsetting: Bestar can facilitate the purchase of high-quality carbon offsets to neutralize unavoidable emissions. Carbon offsets represent projects that reduce or remove greenhouse gases from the atmosphere, and companies can purchase these offsets to compensate for their own emissions.

  • Grant applications: Bestar can help companies apply for government grants and incentives available for carbon reduction projects. These grants can help companies offset the costs of implementing emission reduction measures.

Additional services:

  • Sustainability consulting: Bestar can advise companies on broader sustainability practices that contribute to carbon reduction and long-term environmental goals. This may involve developing a sustainability strategy, setting emission reduction targets, and identifying and implementing sustainable practices throughout the company's operations.

  • Employee training: Bestar can raise awareness among employees about the Carbon Tax and their role in reducing the company's carbon footprint. This can help to ensure that everyone in the company is committed to reducing emissions.

Benefits of using Bestar:

  • Expertise in Carbon Tax regulations and compliance procedures: Bestar has a team of experts who are knowledgeable about the Carbon Tax regulations and compliance requirements.

  • Strong relationships with agencies and industry stakeholders: Bestar has strong relationships with agencies and industry stakeholders, which can help companies navigate the Carbon Tax process more easily.

  • Proven track record of helping companies reduce their carbon footprint and manage their Carbon Tax liability effectively: Bestar has a proven track record of helping companies reduce their carbon footprint and manage their Carbon Tax liability effectively.

By partnering with Bestar, companies can ensure they are meeting their Carbon Tax obligations while also exploring opportunities to reduce their environmental impact and contribute to a more sustainable future.

Please contact Bestar if you have any other questions.

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