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Singapore carbon tax hike spurs demand for credits, but companies face supply crunch

Government is again looking into allowing roll-over of unused credits, and trying to ink carbon credit transfer deals with more countries

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Janice Lim

Janice Lim

Published Fri, Feb 6, 2026 · 07:02 PM
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    • A carbon credit transfer agreement was signed between Singapore, represented by Singapore’s Minister-in-charge of Energy and Science and Technology Tan See Leng (right), and Thailand's minister of natural resources and the environment Chalermchai Sri-on last August.
    • A carbon credit transfer agreement was signed between Singapore, represented by Singapore’s Minister-in-charge of Energy and Science and Technology Tan See Leng (right), and Thailand's minister of natural resources and the environment Chalermchai Sri-on last August. PHOTO: SINGAPORE BUSINESS FEDERATION

    [SINGAPORE] Demand for carbon credits is projected to rise among Singapore corporates, say market watchers, as carbon tax-liable companies look to purchase credits to offset up to 5 per cent of their taxable emissions. 

    This comes as Singapore’s carbon tax increased to S$45 per tonne of carbon dioxide equivalent (tCO2e) from Jan 1, almost double the previous rate of S$25 a tonne. 

    However, there are concerns that there may not be enough supply of credits that meet Singapore’s eligibility criteria under its International Carbon Credit (ICC) framework. 

    Carbon taxCarbon creditsCarbon MarketsCarbon TradingDecarbonisationESGsustainable finance

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