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Singapore joins ICAP as an observer

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Skyline of Singapore (© Jeda Hutchison / Pexels)

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We are very pleased to welcome Singapore as the 7th jurisdiction with ICAP observer status.

Ms Grace Fu, Minister for Sustainability and the Environment, has signed the ICAP Political Declaration, making Singapore an ICAP observer as of 21 February 2022.

As part of Singapore’s longstanding commitment to climate action and sustainable development, Singapore is the first country in Southeast Asia to implement a carbon tax in January 2019. The carbon tax level is set at a transitional rate of SGD 5/tCO2e from 2019 to 2023, covering about 80% of Singapore’s emissions.

The tax is implemented through a fixed-price credit-based mechanism, whereby companies pay the carbon tax by surrendering Government-issued credits representing the equivalent amount of emissions generated. The framework puts in place the building blocks that will help companies build up necessary capabilities to operate in a linked carbon market, such as linked emissions trading systems with other jurisdictions, should Singapore decide to do so in the longer term.

Singapore is proactively engaged in the international effort to combat climate change. In March 2020, Singapore enhanced its 2030 Nationally Determined Contribution and submitted its 2050 Long-Term Low-Emissions Development Strategy under the Paris Agreement. Acknowledging the importance of international markets, Singapore actively contributed to the successful conclusion of Article 6 negotiations. Against the backdrop of an increase in global momentum for climate action, Singapore completed its review of the post-2023 carbon tax trajectory and level, as part of its commitment to spur decarbonisation and advance the transition to a low-carbon economy. The carbon tax level will be raised from SGD 5/tCO2e to SGD 25/tCO2e in 2024, and SGD 45/tCO2e in 2026, with a view to reach between SGD 50 to 80/tCO2e by 2030.

Singapore looks forward to engaging with ICAP as an observer, to strengthen capabilities and explore new possibilities in carbon pricing development, implementation, and linking. By joining ICAP, Singapore is also determined to help advance the role of carbon markets in meeting the goals of the Paris Agreement.

For further information on Singapore’s efforts concerning climate change and carbon pricing, please visit the website of National Climate Change Secretariat Singapore.