Singapore Carbon Tax 2026: The S$45/t Hike, Corporate Liability Calculations, and ISSB Scope 1-3 Compliance

Singapore’s carbon tax rose from S$25 to S$45 per tonne of CO₂e on 1 January 2026, an 80% jump that lands on the country’s largest emitters at the same time as mandatory ISSB-based climate reporting rolls out across SGX-listed companies. For a facility emitting 100,000 tonnes a year, the gross bill climbs from S$2.5 million to S$4.5 million. This guide explains who pays, how to calculate the Singapore carbon tax liability step by step, how the 5% international carbon credit allowance works, and what the ACRA and SGX reporting timeline means for Scope 1, 2 and 3 disclosure.

It is written for sustainability leads, CFOs and compliance teams who need a single reference that connects the tax to the disclosure rules. All rates and thresholds come from the National Climate Change Secretariat (NCCS) and ACRA; the worked numbers are our own calculations.

• What changed on 1 January 2026
• Who pays the tax
• How to calculate your liability
• The 5% international carbon credit rule
• Transition allowances for EITE sectors
• ISSB Scope 1–3 reporting timeline
• A 6-step compliance playbook
• FAQs

What changed on 1 January 2026: the S$45 carbon tax

Singapore introduced its carbon tax in 2019 at S$5 per tonne, the first in Southeast Asia. The rate was held at S$5 until 2023, raised to S$25 for 2024 and 2025, and raised again to S$45 per tonne from 1 January 2026, covering 2026 and 2027. The government has signalled a range of S$50 to S$80 per tonne by 2030 (NCCS, updated 9 July 2026).

The logic is a predictable, rising price signal. Firms planning capital projects with 15 to 25-year lives now have a published path to price against, which is why the 2026 step matters more than its headline: it confirms the trajectory is real, and it makes the 2030 range the planning case for any new boiler, furnace or cracker.

Who pays Singapore’s carbon tax?

The tax applies at facility level, not company level. Any facility that directly emits at least 25,000 tCO₂e a year is taxable. It covers seven greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and nitrogen trifluoride.

• Around 50 facilities are covered, in sectors such as refining, petrochemicals, power generation and semiconductors.
• Together they account for about 70% of Singapore’s GHG emissions.
• Add fuel excise duties on transport fuels and about 80% of national emissions carry a price.

Because the tax is levied on direct (Scope 1) emissions, a company below the threshold still feels it indirectly through electricity prices, since gas-fired power plants pass their carbon costs through to tariffs. That indirect cost shows up in Scope 2 and in supplier pricing, which is why the tax is relevant to almost every business operating in Singapore. If you need a refresher on boundary-setting, our guide to GRI, SASB and TCFD explains how the frameworks treat each scope.

How to calculate your Singapore carbon tax liability

The core formula is simple. The complexity sits in the inputs: verified emissions, any transition allowance, and any credits surrendered.

The worked example below applies the formula to four illustrative facilities, from one sitting right at the threshold to a large refinery-scale emitter. It shows the gross liability at the old and new rates and the effect of using the full 5% credit allowance.

Reading the numbers

A facility at the 25,000-tonne threshold sees its gross bill rise from S$625,000 to S$1,125,000. At 2 million tonnes, the increase alone is S$40,000,000 a year. Using the maximum 5% of credits on a 100,000-tonne facility cuts the S$45 tax bill by S$225,000; whether that saves money depends on whether eligible credits can be bought for less than S$45 a tonne.

Sensitivity matters more than any single year. At S$80 per tonne, the top of the 2030 range, the 100,000-tonne facility would face S$8 million a year in gross tax. Every tonne abated before 2030 is therefore worth at least S$45 now and potentially S$80 later, which changes the payback maths for heat pumps, electrification, carbon capture and process efficiency.

The 5% international carbon credit (ICC) rule

Since 2024, companies may use high-quality international carbon credits to offset up to 5% of their taxable emissions. The aim is to cushion the cost for firms that can source eligible credits cheaply, create local demand for high-quality credits, and build out regional carbon markets (NCCS).

Not every credit qualifies. Eligible ICCs must come from host countries that have signed implementation agreements with Singapore, comply with Article 6 of the Paris Agreement (including corresponding adjustments to avoid double counting), and meet Singapore’s eligibility criteria, built on seven principles covering areas such as additionality, permanence, measurement and the avoidance of net harm.

• Cap: 5% of taxable emissions. For a 100,000-tonne facility, that is 5,000 credits.
• Economics: worth using only if the all-in credit cost (price, due diligence, transaction fees) is below the S$45 tax rate.
• Disclosure: credits reduce the tax bill, not reported gross emissions. Under ISSB/IFRS S2, gross Scope 1 must still be disclosed, and planned credit use is disclosed separately.

For background on how Article 6 trading works, see our guide to Article 6 carbon markets.

Transition allowances for emissions-intensive, trade-exposed sectors

To protect competitiveness, a transition framework gives emissions-intensive, trade-exposed (EITE) facilities allowances against part of their taxable emissions. Allowances are based on efficiency benchmarks and on each facility’s decarbonisation plan. In practice this means two facilities with the same emissions can face different net bills: the more efficient one, with a credible plan, keeps more of its allowance.

The allowance is not a permanent shield. It is tied to measurable progress, so a facility that falls behind its plan risks losing support just as the rate heads toward the 2030 range. Treat the allowance as a bridge to finance abatement, not a reason to delay it.

ISSB Scope 1–3 reporting: the ACRA and SGX timeline

The tax is one half of Singapore’s climate framework; disclosure is the other. After a recalibration announced by ACRA and SGX RegCo on 25 August 2025, the requirements are phased by company size (ACRA).

• All listed companies report Scope 1 and 2 emissions from FY2025.
• STI constituents make full ISSB-based disclosures from FY2025 and add Scope 3 from FY2026.
• Other listed companies follow from FY2028 (market cap of S$1 billion or more) or FY2030 (below S$1 billion), with Scope 3 voluntary.
• External limited assurance of Scope 1 and 2 is deferred to FY2029 for listed companies.
• Large non-listed companies (revenue of at least S$1 billion and total assets of at least S$0.5 billion) begin ISSB-based disclosures and Scope 1 and 2 reporting from FY2030, with Scope 3 voluntary and assurance deferred to FY2032.

The two regimes connect directly. The emissions measured for the carbon tax feed the Scope 1 figure in an ISSB report, and the tax itself is a financial effect that IFRS S2 expects companies to describe. Our IFRS S2 implementation roadmap and climate scenario analysis guide cover how to present carbon-price risk under S$45 and S$80 scenarios.

A 6-step compliance playbook for 2026

1. Build a reliable inventory. Measure Scope 1 and 2 by facility using GHG Protocol methods. Our free GHG Emissions Engine structures the inventory and emission factors.
2. Check the 25,000-tonne threshold. Confirm which facilities are taxable and which are close enough to cross it as production grows.
3. Model the liability. Price emissions at S$45 now and at S$50 and S$80 for 2030, net of expected transition allowances.
4. Decide on credits. Compare the all-in cost of eligible ICCs with the tax rate, and line up suppliers well before the surrender deadline.
5. Set a reduction pathway. Translate the price path into abatement targets. The SBTi Pathway Modeler helps test a 1.5°C-aligned trajectory.
6. Map export exposure. If you ship steel, aluminium, cement, fertiliser or hydrogen to the EU, the EU carbon border adjustment applies too. Estimate it with our CBAM Calculator.

Companies that run these steps once a year, aligned with their financial close, turn two compliance obligations into one data process, and the same numbers then serve the tax return, the sustainability report and investor questions.

Frequently asked questions

What is Singapore’s carbon tax rate in 2026?

S$45 per tonne of CO₂e, effective 1 January 2026 for 2026 and 2027. It was S$25 per tonne in 2024 and 2025, and the government aims for S$50 to S$80 per tonne by 2030.

Which companies pay Singapore’s carbon tax?

Facilities that directly emit at least 25,000 tCO₂e of greenhouse gases a year. About 50 facilities are covered, accounting for around 70% of Singapore’s emissions.

How much of the carbon tax can be offset with international carbon credits?

Up to 5% of taxable emissions, from 2024, using eligible international carbon credits that meet Singapore’s eligibility criteria, including alignment with Article 6 of the Paris Agreement.

Do all SGX-listed companies have to report Scope 3 emissions?

No. Under the August 2025 timeline, Scope 3 reporting is mandatory only for STI constituents, from FY2026. For other listed companies and large non-listed companies it is voluntary.

Sources

• National Climate Change Secretariat (NCCS), Carbon Tax, last updated 9 July 2026
• Accounting and Corporate Regulatory Authority (ACRA) and SGX RegCo, joint announcement on climate reporting, 25 August 2025
• Worked liability figures: Sustainability Awakening calculations using NCCS rates.

This guide is for information only and is not legal or tax advice. Confirm current rules with NCCS, ACRA and your advisers before filing.