From 2024, companies will be allowed to buy international carbon credits to offset up to 5% of their taxable emissions, he added.
“It will moderate the impact for businesses,” Wong said.
“It will also help create local demand for high-quality carbon credits and catalyze the development of well-functioning and regulated carbon markets.” Carbon credits are instruments certified to represent emission reductions during climate action projects and are traded by companies to offset emissions elsewhere.
Singapore, the first Southeast Asian country to introduce a carbon pricing system, introduced its carbon tax in 2019.
The country’s carbon tax applies to all facilities producing 25,000 tonnes or more of greenhouse gas emissions per year, including oil refineries and power plants.
A stronger price signal from the government would encourage investment in reducing greenhouse gases, said a spokesman for ExxonMobil, which operates the world’s largest refinery in Singapore.
“The carbon tax and supporting government policies can help incentivize more industries and sectors to invest in research or technology to reduce emissions,” she said.
“As Singapore has an export-oriented economy, it is also important that the designed carbon tax framework encourages greenhouse gas reductions, while safeguarding the competitiveness of trade-exposed industries.” A Shell spokesperson said the carbon price should apply to as many sectors of the economy as possible and the company expects the price to rise over time as the transition energy progresses.
“It’s essential because the short-term impact on competitiveness is real,” she said.
“Unlike electricity, which is consumed domestically, Singapore exports most of its energy and chemical products and has to compete with other exporting countries that either do not have a carbon pricing policy or have carbon pricing mechanisms. sophisticated to help their trade-exposed industries stay competitive, if they do.