Question

Ms He Ting Ru: To ask the Minister for Trade and Industry (a) whether he can provide an update on the transition framework for carbon tax that was first introduced on 12 January 2022; (b) how does the transition framework for existing facilities in the emissions-intensive trade-exposed sectors ease the transition without eroding the price signal for such companies to invest in decarbonisation; and (c) whether an update can be provided on how much SMEs have drawn down on the Energy Efficiency Fund to build capabilities.

Oral Answer (to be attributed to Second Minister for Trade and Industry Dr Tan See Leng)

1. In January 2022, the Government announced the introduction of the carbon tax transition framework to provide time for Singapore companies in emissionsintensive and trade-exposed (EITE) sectors to adjust to a low-carbon economy and to make the necessary investments for their transformation. Since the announcement, EDB has been engaging affected companies, such as those in the chemicals and semiconductor sectors, on the details and implementation of the framework.

2. The transition framework will be calibrated to spur companies to invest in decarbonisation. Transitory allowances will be provided only for a proportion of the companies’ emissions, and are based on internationally recognised efficiency benchmarks, where available, or the companies’ decarbonisation plans. The remaining emissions will be subject to the prevailing headline carbon tax rate. The Government will review and adjust the allowances based on how companies have fared in lowering their emissions, as well as international developments and advancements in decarbonisation technologies.

3. For the Energy Efficiency Fund (or E2F), 90 projects amounting to S$3.4 million have been approved to date The Energy Efficient Fund has been subsumed under the enhanced Energy Efficiency Grant (EEG) from 1 April 2024, which will be available to more companies.