MP for Nee Soon GRC
Speech on Carbon Pricing Bill
Compliance and Administrative Cost
Carbon Tax vs Carbon Trading
Together with the Ministry of Trade and Industry (MTI), the Economic Development Board (EDB), and the National Climate Change Secretariat (NCCS), my Ministry and the National Environment Agency (NEA) have consulted companies extensively over the past year on the design of our carbon tax framework. Whilst companies understood the need to price carbon, they asked for a transition period to adjust to the impact of the tax. This is why we are starting with S$ 5 per tonne for the first 5 years; companies will have time to adjust, for example, by upgrading to more energy-efficient equipment.
As highlighted by Mr Kwek and Ms Rahayu Mahzam, we are mindful of the need to manage compliance costs, which was also a key feedback from companies. We have done the following:
a. Firstly, we have built on existing measurement, reporting and verification (MRV) requirements set out in the Energy Conservation Act (ECA) which companies are already familiar with.
These requirements take reference from international standards like the ISO and GHG Protocols, which are used by many companies for corporate sustainability reporting. This approach streamlines requirements and aligns with international practices.
b. Second, we have identified a list of excluded emissions so that companies need not incur disproportionately high costs to measure and report these small emissions sources.
c. Third, NEA is actively growing the pool of third-party verifiers in Singapore to ensure that companies can access competitive offerings.
15. NEA has been organising briefings to familiarise companies with the new MRV requirements and carbon tax obligations, and will continue to help companies build up their capability. The detailed MRV requirements will be publicly available.