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Ministry of Energy, Trade and Industry

Carbon

METI supports efforts by our companies to reduce their carbon emissions and to become more carbon-efficient over time.

Last updated on 25 September 2026

Carbon Tax

Singapore's carbon tax, implemented in 2019 as Southeast Asia's first carbon pricing scheme, covers approximately 70% of the nation's greenhouse gas emissions across around 50 facilities in the manufacturing, power, waste, and water sectors. This serves as an economic signal to shift producers and consumers away from carbon-intensive goods and services, ensures businesses take responsibility for their carbon footprint, and encourages investment in low-carbon alternatives. 

Initially set at S$5/tCO2e from 2019-2023, the tax increased to S$25/tCO2e in 2024 and subsequently to S$45/tCO2e in 2026-2027, with a view to reaching S$50-80/tCO2e by 2030 to support Singapore's net-zero commitments. The government expects no additional net revenue from increases, with proceeds funding decarbonisation measures and supporting businesses and households during the transition to a low-carbon economy. 

Companies may use high-quality international carbon credits to offset up to 5% of taxable emissions from 2024, while a transition framework provides allowances for emissions-intensive trade-exposed companies. 

Carbon Capture and Storage (CCS)

Singapore is exploring carbon capture and storage (CCS) as a decarbonisation pathway for hard-to-abate sectors such as the chemicals sector.

As Singapore does not have suitable geological resources, we are partnering countries in the region, such as Australia, Indonesia and Malaysia, which have strong potential for carbon dioxide storage, to explore cross-border CCS. At the same time, we also engage countries to exchange views on CCS technologies, and policies to support CCS. 

Carbon Markets

METI’s carbon markets initiatives include developing and reviewing carbon mitigation strategies and policies, with particular focus on carbon credit measures outlined in Singapore’s Long-term Emissions Development Strategy (opens in new tab) and plans to achieve Singapore's 2030 Nationally Determined Contributions (opens in new tab).

METI designs and implements robust sourcing strategies and develops implementation plans to meet our climate targets. Additionally, METI builds strategic partnerships with private sector organisations, international and multilateral bodies, and like-minded countries to secure carbon credits compliant with Article 6 of the Paris Agreement. For more information, please access Singapore's Carbon Markets Cooperation website (opens in new tab).


Industry Energy Efficiency

Industry Energy Efficiency measures and grants help support businesses in reducing emissions and improving resource efficiency.

Research and Development

As a small island state, Singapore faces unique decarbonisation challenges. Thus, Singapore must invest early in decarbonisation technologies to meet 2050 emission targets. METI has initiated various programmes such as LCER and LCT3 to reduce emissions from its carbon-intensive energy sector.