S$5 per tonne tax rate ‘fair amount’ to pay for greenhouse gas emissions: Masagos

SIAU MING EN Today Online 23 Feb 18;

SINGAPORE – The initial carbon tax of S$5 per tonne of greenhouse gas emissions imposed on large emitters is a “fair amount”, and was decided after considering the industry’s compliance costs, among other factors, said Environment and Water Resources Minister Masagos Zulkifli on Thursday (Feb 22).

The initial tax rate will also help affected businesses transit into the carbon tax regime, and give them time to adjust and comply, said Mr Masagos, who spoke to reporters on the sidelines of the opening of a green classroom at Bukit View Secondary School.

In his Budget speech in Parliament on Monday, Finance Minister Heng Swee Keat announced that large carbon emitters who produce 25,000 tonnes or more of greenhouse gases annually will be taxed S$5 for each tonne of emissions from next year to 2023. This will be increased to between S$10 and S$15 by 2030.

The carbon tax will apply to about 30 to 40 of the largest emitters in the power generation, petroleum refining, chemicals and semiconductor sectors, which account for about 80 per cent of Singapore’s emissions.

Mr Masagos said they had consulted the industry and arrived at the S$5 per tonne rate, which is lower than the S$10 to S$20 rate first announced by the authorities last year. They also wanted to make sure that the cost of compliance is comparable to the tax they will have to pay.

The businesses had also asked the authorities to be transparent about the tax rates in the long run, among other reasons, which is why they have set a flat carbon tax rate that will apply to all sectors, with no exemptions, he noted.

“We took into account that these companies need to transit into the future where they will need time to change their processes, improve their emissions, so that when the tax actually takes place at a higher rate… they (would) already have reduced (their) emissions,” he added.

Businesses will also need time to comply with the requirements under the carbon tax regime, as well as to adjust to them during this period of transition, he said.

“I think by giving them five years to adjust and also getting used to the compliance regiment of this carbon tax, S$5 is a fair amount to put to our companies,” said Mr Masagos. In jurisdictions where there is a high carbon tax, he noted that exemptions are also made for certain industries where the tax rates are lowered such that it is no longer as effective.

While there is concern about the projected carbon tax rates after 2030, Mr Masagos said that timeline is still “too far away”. Reiterating that companies will pay between S$10 and S$15 by 2030, he added that this is “depending on many factors, including competitiveness as well as the level playing field we will like to see around.”

When asked if more regular and detailed data on Singapore’s emissions,including those of individual emitters, will be published, Mr Masagos said the carbon pricing bill has to be passed in Parliament so that the authorities can get a clearer picture of how much greenhouse gas each large emitter produces and how to nudge them to do better.

In the draft carbon pricing bill released for public consultation last October, large emitters will have to register themselves as a taxable facility. The National Environment Agency will determine the number of carbon credits they have to surrender based on the emissions report they submitted for that year, which must be verified by an independent third party.

Such data will not be released publicly but the Ministry of Environment and Water Resources (MEWR) will continue to release key environmental statistics annually.

For instance, the most recent publication last year showed Singapore’s total annual greenhouse gas emissions for 2014 and 2015, which were recorded at about 50 million and 51.4 million carbon dioxide-equivalent tonnes respectively.

There is a more comprehensive emissions report published in 2012, which was submitted to the United Nations Framework Convention on Climate Change two years ago. Updated figures will be released at the end of this year.

Dr Sanjay Kuttan, programme director at Nanyang Technological University’s (NTU) Energy Research Institute, said more data on Singapore’s emissions will help with innovation, where specific innovation can be targeted at areas or processes that can be more efficient.

Associate Professor Toh Mun Heng from the National University of Singapore Business School said the amount of information to be made publicly available has to be balanced between allowing businesses to remain competitive, and to be accountable to the public.

Given that the large emitters will have to submit more of such data to the authorities, the Government has to be the “honest broker” to monitor the emitters’ emissions levels and their impact on the environment and the public, he added.

Carbon tax of S$5 per tonne of greenhouses gases to give companies time to adjust: Masagos
Deborah Wong Channel NewsAsia 22 Feb 18;

SINGAPORE: The Government decided to impose a carbon tax of S$5 per tonne of greenhouse gas emissions, instead of the previously announced range of between S$10 and S$20, so as to give affected companies time to adjust, Minister for Environment and Water Resources Masagos Zulkifli said on Thursday (Feb 22).

“We considered a few things,” he said. “Number one: To make sure that the cost of compliance is comparable to the tax being paid. We impose it only on the highest greenhouse gas emitters. This means that to cut off at 80 per cent of the total emission, about 40 companies will be affected by this.”

On the decision to implement flat rates without exemptions, Mr Masagos said: “These companies also ask us to be transparent, to know what the rates will be like in the long term as well as to make it simple so compliance costs are not difficult. Because of that, we made the rates flat."

Mr Masagos was speaking to reporters on the sidelines of the launch of JOULES Smart Centre, a green classroom at Bukit View Secondary School.

The centre will be used for the school's environmental classes, as well as other events and functions.

The school also plans to use the JOULES Smart Centre to help senior residents in the neighbourhood learn to use electronic devices.

The centre itself uses sustainable products, such as tables made from repurposed pallets, and a thermal air conditioning system that harnesses solar and ambient heat to reduce electricity.

It has an indoor green wall that purportedly gives better air quality and reduces noise levels by absorbing acoustic energy.

The Singapore Green Building Council (SGBC), which had a hand in building the JOULES Smart Centre, said it hopes to use the facility to make the case for greener, healthier classrooms.

“Green building should not be adopted by just the building and construction industry alone,” said the council's president Tan Swee Yiow. "Research has shown that Green Mark-certified buildings are not only better for the environment, but also have positive effects for the building occupants.”

BVSS has a strong focus on sustainability education. Its students attend a four-year enrichment programme, where they learn about key environmental issues and developments, how to build a solar car, as well as coding.

Source: CNA/aa


$5-per-tonne carbon tax is fair on companies, says Masagos
Samantha Boh Straits Times 22 Feb 18;

SINGAPORE - Getting large carbon emitters to pay $5 for every tonne of greenhouse gases they generate is a "fair" way to start a compliance regime, Minister for the Environment and Water Resources Masagos Zulkifli said on Thursday (Feb 22).

From next year till 2023, all facilities producing 25,000 tonnes or more of greenhouse gas emissions a year will be taxed $5 per tonne of emissions - significantly lower than the $10 to $20 per tonne envisioned last year.

However, the Government will review the tax rate in 2023, and eventually increase the carbon tax to between $10 and $15 per tonne by 2030.

He called the initial $5 per tonne a "fair amount", which gives the affected 30 to 40 companies - which contribute 80 per cent of Singapore's greenhouse gas emissions - time to "adjust and also get used to the compliance regime"

"They will need time to change their processes and improve their emissions" he said.

He added that the transition period will allow the affected companies - mainly from the petroleum refining, chemicals and semiconductor sectors - to be better placed to comply with the higher tax rates to be imposed by 2030.

Mr Masagos was speaking on the sidelines of a visit to Bukit View Secondary View, where he launched a new green classroom comprising various eco-friendly features, including a green wall - covered in plants - and motion-activated fans.

A carbon tax is a common tool used to control the amount of earth-warming greenhouse gases released into the atmosphere.

About 67 countries and jurisdictions, including China, the European Union and Japan, have implemented or announced plans to implement such a scheme. They aim to encourage companies to reduce their greenhouse gas emissions and improve energy efficiency.

Households here could see their total electricity and gas expenses increase by 1 per cent on average due to the carbon tax, which will be offset by additional Utilities-Save rebates.

Asked how companies can be made accountable, Mr Masagos said it is necessary to pass a carbon tax act which will require companies to submit data on their greenhouse gas emissions, and which will impose stricter requirements on large emitters such as an audit report that confirms their data.

"By doing so we will have a better grasp of how much each of these industries and companies emit and therefore have an idea of how we can then nudge (them) to do better," he said.

The Ministry of the Environment and Water Resources said there are no plans to make individual company emissions data public.

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