Pace of carbon tax increase will likely depend on state of economy, SMEs: Janil Puthucheary
Singapore’s carbon tax on companies that emit at least 25,000 tonnes of greenhouse gas annually is currently set at S$25 per tonne
[SINGAPORE] The state of the economy and Singapore’s small and medium-sized enterprises (SMEs) will help determine the pace of carbon tax increases ahead, said Dr Janil Puthucheary, senior minister of state for sustainability and the environment.
“It’s quite clear that the carbon tax that we’ve applied today has some headroom for increase in terms of the real carbon price,” noted Dr Janil, who is also senior minister of state for education.
“The room for discussion is how far and how fast the trajectory; how high you go; and how quickly do you get there?”
Dr Janil was speaking at the DBS Regenerative Festival on Wednesday (Sep 17), in a fireside chat moderated by the bank’s chief executive officer Tan Su Shan.
Singapore’s carbon tax on companies that emit at least 25,000 tonnes of greenhouse gas annually is currently set at S$25 per tonne.
This will be raised to S$45 per tonne in 2026 and 2027, with expectations for it to reach S$50 to S$80 per tonne by 2030.
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Dr Janil said the exact tax rate “becomes a bit more uncertain” further out in the future, as the government might want to reserve some operating freedom, depending on how the global economy goes and how Singapore’s domestic economy develops.
He also noted that artificial intelligence and tech can potentially help companies deliver on their sustainability goals.
But developing more data centres or capabilities would consume more energy and water, which would push companies in the other direction, he said.
Hence, to reach their sustainability goals, businesses should not only transform internal processes, but also procure their tech solutions from greener and more sustainable sources, he added.
The DBS Regenerative Festival – currently in its second iteration – is one of the bank’s initiatives to help Singapore SMEs integrate sustainability into their business models.
On Wednesday, the bank also opened its DBS Asia Gateway (DAG) office at Perennial Business City in Jurong. The DAG – originally located in Toh Guan Road – operates as a live parallel site under the bank’s business continuity plan.
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