SINGAPORE now has more options that will let it reach a more ambitious target for net-zero carbon emissions, Senior Minister Teo Chee Hean told Parliament on Tuesday (Mar 8), after the goal was moved from the second half of the century to "by or around mid-century" last month.

That's as he argued that Singapore should make the decisive shift to net zero to "make Singapore an attractive place for green economic activities" and establish the Republic's economic competitiveness in a low-carbon future.

Besides manufacturing more sustainable products and developing green financial instruments, Teo - who is chairman of the inter-ministerial committee on climate change - added that Singapore is also growing new sectors, such as international carbon trading and services.

"We will signal to global markets and corporates that Singapore is ready to be a good partner and location for forward-looking companies which have clear low-carbon goals," he said, as he opened a parliamentary joint segment on the Singapore Green Plan 2030.

"This will create many good jobs for Singaporeans and enhance Singapore's value proposition in the future low-carbon global economy."

He added that the Republic will declare a specific year for its target of net-zero carbon emissions after close consultation with "industry and citizen stakeholder groups", and plans to formally revise later this year the Nationally Determined Contribution for 2030 and Long-Term Low Emissions Development Strategy under the Paris Agreement treaty on climate change.

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Meanwhile, Singapore's planned carbon tax increase "is set at a level that sends a significant price signal to influence consumer and business behaviour", the minister noted.

Singapore will raise the carbon tax rate to between S$50 and S$80 a tonne by 2030, up from S$5 now. Teo noted that the proposed price takes reference from both the private sector and "competitor jurisdictions", such as China, South Korea and the European Union.

The carbon tax collected will be used to support households and businesses, including "transitory support" for existing investments in emissions-intensive trade-exposed sectors, which can include the chemicals, electronics and biomedical manufacturing industries.

The tax threshold of 25,000 tonnes covers about 80 per cent of Singapore's emissions, which Teo called one of the highest levels of coverage globally. The suggestion to lower the threshold and impose the carbon tax on all emissions "would impose significant regulatory additional burden and costs on companies without any meaningful increase in coverage", he said.

The latest measures come amid "positive international developments", with Teo citing the impact of developments such as regulations on markets for international carbon credits, as well as the capital flows from sustainable private financing and corporate net-zero targets.

Said Teo: "We can and we should make this decisive move to net zero. We must advance on this sustainability journey together as a nation, and we will require the participation and support of all Singaporeans to do so."

Trade and Industry Minister Gan Kim Yong cited sustainable tourism and low-carbon hydrogen development as potential growth areas in Singapore’s green economy strategy, with retraining workers for the low-carbon power sector another area of interest.

“Singapore’s transition to a low-carbon economy is critical not only to ensure that we are aligned with the global efforts on sustainable development, but also to leverage new opportunities in the emerging green economy,” he said.

Get the latest updates on Budget 2022 here: bt.sg/budget22