Singapore drives energy efficiency with funding initiatives while monitoring industry progress.
The Singapore government has allocated S$3.4 million to 90 projects under the Energy Efficiency Fund (E2F), according to an announcement by Second Minister for Trade and Industry, Tan See Leng, on April 3, 2024. This fund, previously managed by the National Environment Agency, is now incorporated into the broader Energy Efficiency Grant.
The E2F supports Singapore’s carbon tax transition framework, launched in January 2022, which encourages companies to adopt decarbonization strategies. The Economic Development Board has engaged more than 20 companies in the chemicals and semiconductor sectors to facilitate this transition, reflecting a strong government push for greener industrial practices.
Singapore’s carbon tax, which was raised to S$25 per tonne of emissions in 2024, serves as an additional incentive for companies to reduce their carbon footprint. While some transitory allowances will be provided, companies will face the prevailing tax rate on the remainder of their emissions.
Dr. Tan emphasized that the framework is designed to encourage long-term investment in decarbonization technologies. Though companies are urged to act now, the framework allows for flexibility in the amount of transitory allowances given to firms, which will be adjusted based on their progress in emissions reduction.
The revenue generated from the carbon tax is expected to be reinvested into climate mitigation measures, as well as other incentives to encourage both companies and consumers to adopt more environmentally friendly practices. This aligns with Singapore’s broader sustainability goals.
More details about the framework and its developments are anticipated within the next year. Dr. Tan noted that the government would provide further clarity as it continues to evaluate international benchmarks and advancements in decarbonization technologies.
This evolving framework represents Singapore’s commitment to balancing economic development with environmental responsibility, positioning the country as a leader in sustainable industrial practices.
