Aqil Haziq Mahmud Channel NewsAsia 16 Feb 18;
SINGAPORE: Starting next year, the Government will impose a carbon tax to reduce greenhouse gas emissions, as part of its commitments under the Paris climate agreement,
Finance Minister Heng Swee Keat said in his Budget speech last year that the tax will create a "price signal" to incentivise industries to reduce emissions.
It will also create "new opportunities" in green growth industries such as clean energy, he added, pointing out that revenue from the tax will help to fund measures by industries to reduce emissions.
The tax will affect 30 to 40 large emitters, defined as those that emit 25,000 or more tonnes of greenhouse gases annually. The Government is looking at charging between S$10 and S$20 per tonne of greenhouse gas emissions.
The final price will be announced in the Carbon Pricing Bill, which will be introduced in the first quarter of this year.
While the tax will not apply directly to households, Mr Heng expects a "modest" trickle-down effect on consumers. The idea is for power generators to pass on the cost of the carbon tax, experts said.
The National Climate Change Secretariat has said that for the average household living in a four-room flat, the tax translates to an increase of S$1.70 to S$3.30 per month in electricity tariffs.
So, here's what you need to know about how the carbon tax works:
1) FACILITIES MUST SUBMIT EMISSIONS REPORTS
The bill states that facilities which emit more than 2,000 tonnes but less than 25,000 tonnes of greenhouse gases annually must continue to submit an emissions report, in line with the Energy Conservation Act.
"Taxable facilities" which emit more than 25,000 tonnes every year must submit an emissions report that is verified by an independent third party and based on a monitoring plan.
Once the carbon tax kicks in next year, facilities will have to monitor their emissions for a year before submitting their emissions report by Jun 30, 2020. Emissions reports must be submitted by Jun 30 each year.
2) 'TAXABLE FACILITIES' MUST DEVELOP MONITORING PLAN
The monitoring plan must state how a facility ensures the quality of data required for computations in the emissions report. If required, the plan must also be independently verified.
The monitoring plan must be submitted by Dec 31 each year.
3) FACILITIES MUST CORRECT INACCURACIES IN REPORTS, PLANS
If the authorities find that an emissions report or monitoring plan is inaccurate or incomplete, they can direct the facility to rectify the document and resubmit it.
If the facility discovers an inaccuracy, it must notify the authorities as soon as possible. It should also describe the circumstances that led to the error and how it will be corrected. Where applicable, it should give an estimate of the greenhouse gases represented by the error.
Those who intentionally provide inaccurate information to dodge taxes can be fined triple the evaded amount, on top of a fine capped at S$10,000, and/or jailed up to three years.
4) 'TAXABLE FACILITIES' WILL PAY CARBON TAX IN CREDITS
"Taxable facilities" can buy carbon credits from the National Environment Agency (NEA) at a fixed price throughout the year. At the end of an assessment year, the credits are used to pay tax levied on their total greenhouse emissions.
The price of the credits will be determined closer to the date of implementation.
This system gives the authorities the flexibility to adopt other methods if and when needed, such as linking Singapore’s carbon pricing framework to that of a bigger jurisdiction.
Taxes must be paid by Sep 30 each year. Those who fail to pay the carbon tax can be fined triple the amount of outstanding tax. The first carbon tax is expected to be paid in 2020.
5) FACILITIES CAN APPLY FOR DEREGISTRATION
All facilities can apply to be deregistered if their greenhouse gas emissions fall below certain thresholds for three consecutive years.
But if they can prove that they have made “significant and substantial changes” to processes that will lower emissions "considerably" below these thresholds, they can apply for deregistration the following year.
NEA will approve such applications on a case-by-case basis.
Source: CNA/hz
