Carbon tax at a rate of SGD 25 per tonne of carbon dioxide equivalent (tCO2e) of emissions is applied on the total greenhouse gas emissions of facilities that produce 25,000 or more tCO2e of emissions per year.

The carbon tax applies uniformly to all sectors, without exemption, and takes the form of a fixed-price credits-based mechanism. The tax rate will be increased to SGD 45 per tCO2e of emissions for 2026 and 2027, and to SGD 50 to SGD 80 per tCO2e of emissions by 2030.

Taxable facilities are allowed to use high quality international carbon credits to offset up to 5% of their taxable emissions.