customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

knowledgeQuestion

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Reuters

Singapore is offering refiners and petrochemical companies rebates of up to 76 per cent for its planned carbon tax for 2024 and 2025 to help them ease cost stress and remain competitive versus rivals elsewhere, four sources familiar with the matter said.
The tax concessions will provide a significant buffer for refiners’ profit margins amid growing competition with newer plants in China and the Middle East.
Carbon tax costs are estimated at between 80 cents and US$1 per barrel of crude input basis for refineries based on the US$25 per ton of emission rate, according to consulting firms FGE and Wood Mackenzie. That would be close to a quarter of refiners’ current margins in Singapore.
Under Singapore’s new taxation rate for carbon emissions, which took effect on January 1, businesses that emit more than 25,000 metric tons of carbon annually pay US$25 per ton until 2025, compared with US$5 per ton in 2019-2023.
The rate will subsequently go up to US$45 per ton in 2026-2027 and US$50-80 per ton by 2030, the government announced in 2022.
Major companies in the refining and downstream sectors have been given rebates on a transitional basis to soften the added tax burden, lowering the final costs to between US$6 and US$10 per ton of emissions, three of the sources said.
These refineries and downstream businesses will still have to pay an outright US$25 per ton of carbon emission tax and subsequently apply for the rebates, according to the terms and conditions set out by the government, a fifth source said.
Singapore has three refineries of a combined capacity of 1.119 million barrels per day, currently operated by Shell, ExxonMobil Corp, and Singapore Refinery Co (SRC), a joint venture between Chevron and Singapore Petroleum Co, wholly owned by PetroChina.
While the disruption of Russian oil trade post-Ukraine war and post-Covid demand boosted refining margins between 2020 and 2022, these profits have halved from peak levels reached in February.
Shell declined to comment, while an ExxonMobil spokesperson said: “As a matter of practice, we do not discuss confidential matters.”

“The Singapore Refining Company remains committed to support the Singapore government’s policies through close partnership and continued dialogue,” an SRC spokesperson said.
The concessions are likely to be in place at least for 2024 and 2025, one of the sources said, adding that the “discounted” rate will be back on the table for discussion in 2026 or after.
Singapore introduced a transition framework last year to support companies in Emissions-intensive trade-exposed (EITE) sectors such as chemicals, electronics and biomedical manufacturing in their energy transition.
“The allowances will only be provided for a proportion of the companies’ emissions, and are based on internationally recognised efficiency benchmarks where available, or the ambition and robustness of companies’ decarbonisation plans,” a spokesperson at Ministry of Trade & Industry told Reuters in an email.
“Their remaining emissions will continue to be subject to the prevailing headline carbon tax rates.”
The duration of this transition framework will depend on the development of carbon prices internationally and the progress of decarbonisation technologies, he said, adding that companies will be given sufficient notice in advance of changes to facilitate business planning.
In general, the carbon tax would have to be paid in the year following the reporting year “because of the time needed to compile the emissions data and independently verify the total emissions of the reporting year”, a spokesperson from the city state’s National Environmental Agency (NEA) said earlier.
Companies currently have the option to also offset up to 5 per cent of their taxable emissions using international carbon credit – either bought or accumulated elsewhere in the world, according to the NEA.
This hefty increase in carbon taxes has been a hot topic in Singapore’s refining sector, following the sale of Shell’s flagship Bukom and Jurong Island refinery and petrochemical facilities amid stiff competition.


Singapore Exchange eyes Middle East move to target Dubai-bound hedge funds

Singapore’s ex-transport minister Iswaran faces trial in ‘high-stakes’ corruption case

Singapore, Indonesia, Australia, New Zealand team up to fast-track air travel

Singapore Design Week: 10 Southeast Asian artists about to go on show at Emerge, part of Find – Design Fair Asia

Singapore

Singapore to offer carbon tax rebates up to 76% for refiners, petrochemical firms, sources say

Steam rises from the coal-fired power plant. Singapore is offering refiners and petrochemical companies rebates to help ease costs and remain competitive. Photo: AP/File

In 2018, ExxonMobil said it would spend US$1 million to support a US lobbying campaign behind a carbon tax. Photo: AFP/File

Climate change: Budget, stakeholder engagement are ‘main challenges for Hong Kong firms’

‘The availability of dedicated budgets for emissions reduction, energy efficiency, and low-carbon research and development emerged as the most critical determinants for achieving net-zero targets,’ says BEC chief. Photo: Shutterstock

Net-zero offices in Hong Kong, Asia face supply crunch by 2030 as 87% of occupiers need them to hit carbon targets: JLL

Buildings in Hong Kong’s Central district, pictured on May 16, 2024. Photo: Jelly Tse

Helen Amos, JLL’s head of sustainability in Hong Kong. Photo: Handout

Singapore study links air pollution to 135 million premature deaths

Women cover their faces with masks as haze shrouds Singapore’s central business district in 2016. Photo: Reuters

Haze shrouds the Singapore Flyer observation wheel and Marina Bay Sands in 2019. Photo: Bloomberg

Women in Indonesia’s Aceh province wear masks in 2019 amid thick haze caused by smog-belching forest fires. Photo: AFP

Malaysia confronts deadly consequences of Kuala Lumpur’s neglected urban forest

Rescuers stand where a tree fell across one of Kuala Lumpur’s busiest roads on May 7, killing a motorist. Photo: Reuters

Malaysia’s landmark Petronas Twin Towers are seen between trees in Kuala Lumpur. Photo: AFP

Rescuers stand where a tree fell across Jalan Sultan Ismail, one of Kuala Lumpur’s busiest roads, killing a motorist on May 7. Photo: Reuters

A park opposite the central business district at Marina Bay in Singapore. The tiny city state has more than 620 certified arborists to its much larger neighbour’s 109. Photo: Bloomberg

A fallen tree partially blocks a road in the upscale Bangsar neighbourhood on the outskirts of Kuala Lumpur on May 25. Photo: Hadi Azmi/Handout

Saifful Pathil, one of Kuala Lumpur’s 21 certified tree surgeons, uses a mallet to check a tree in the city. Photo: Handout 

What is green hydrogen and what is China’s role in its production and use?

China has more than 30 large-scale green hydrogen projects involving 260 billion yuan of investment. Photo: Shutterstock

A 5G+ hydrogen-powered unmanned tractor is displayed at the 13th Central China Investment and Trade Exposition in Changsha, central China’s Hunan province, last week. Photo: Xinhua

A model of Airbus’ ZEROe hydrogen fuel cell powered aero engine is displayed at the VivaTech conference in Paris, France, on May 24. Photo: Bloomberg via Getty Images

News

Asia

Southeast Asia

Singapore is offering refiners and petrochemical companies rebates up to 76% for its planned carbon tax to help ease costs and remain competitive


This hefty increase in carbon taxes has been a hot topic in Singapore’s refining sector, following the sale of Shell’s flagship Bukom and Jurong Island refinery and petrochemical facilities amid stiff competition.
