Introduction

Singapore submitted its enhanced Nationally Determined Contribution (NDC) and its Long-Term Low-Emissions Development Strategy (LEDS) to the United Nations Framework Convention on Climate Change in 2022, revising¹ its commitment to reducing emissions to around 60 million tonnes of carbon dioxide equivalent (MtCO2e) in 2030 after peaking emissions earlier.²

Based on earlier projections, this is consistent with Singapore's existing 2030 NDC, which states that Singapore aims to achieve a 36% reduction in emissions intensity (EI) from 2005 levels by 2030. Singapore also aims to halve emissions from its peak to 33 MtCO2e by 2050, with a view to achieving net-zero emissions as soon as viable in the second half of the century.

Singapore's low-carbon transition will involve concrete actions across all sectors, building on its long-standing emphasis on sustainable development and will have three thrusts.

• Transformations in industry, economy and society, e.g., more renewable energy, greater energy efficiency, reduced energy consumption
• Adoption of advanced low-carbon technologies, e.g., carbon capture, utilization and storage (CCUS), and use of low-carbon hydrogen
• Effective international collaboration, e.g., international climate action, regional power grids, market-based mechanisms

According to the MND,³ buildings accounted for about 11 MtCO2e of carbon emissions in 2018, the most recent year for which verified data is available, with a projected increase in emissions arising from the recovery in the construction of new buildings following the pandemic.

To reduce embodied carbon in buildings, the BCA requires building projects to adopt a minimum number of sustainable construction practices under the following codes:⁴

• Code for Environmental Sustainability of Buildings (Edition 4.0) under the 2008 Regulations, which requires the following:
  • For new residential buildings: a selection of four carbon reduction measures in total as listed in Table 4.2(a), including a minimum of two measures from Section 2: Sustainable Construction
  • For new nonresidential buildings: a selection of four carbon reduction measures in total as listed in Table 4.2(b), including a minimum of two measures from Section 2: Sustainable Construction

   

• Code on Environmental Sustainability Measures for Existing Buildings (Edition 3.0) under the 2013 Regulations, which requires, for existing nonresidential buildings, all base requirements listed in Table 4.1, where relevant, and a selection of three carbon reduction measures from Table 4.2, with at least one measure from Sustainable Operation and Management

The following building works and types of use are exempted from the above codes:

• Building works involving a GFA of less than 5,000 m2

   

• Type A buildings used as the following:
  • Data center
  • Religious building
  • Residential building (other than serviced apartments)
  • Utility building

   

• Type B buildings used as follows:
  • As an industrial building, an industrial retail building a light industrial building, or a special industrial building
  • As railway premises
  • To provide airport services and facilities
  • To provide port services and facilities

However, note that, under the Carbon Pricing Act 2018, the following business facilities emitting a total amount of reckonable greenhouse gas (GHG) equal to or above 2,000 tCO2e annually directly into the atmosphere must register⁵ with the National Environment Agency (NEA):

• Manufacturing and manufacturing related services
• Supply of electricity, gas, steam, compressed air and chilled water for air-conditioning
• Water supply and sewage and waste management

Such business facilities could be carrying out any of the abovementioned activity at a single site or a series of the abovementioned activities at more than one parcel of land that:

• Are contiguous, adjacent or adjoining
• Are separated by any road, pathway, drain or waterway
• Have a dependency between the activities carried out on the parcels of land

All registered business facilities must submit an emissions report annually⁶ to the NEA on emissions in respect of the business.

Registered business facilities emitting at least annual direct GHG emissions of 25,000 tCO2e are subject⁷ to a carbon tax. The carbon tax rate will increase to SGD 25 per tonne in 2024, and to SGD 45 per tonne in 2026, with a view to reaching SGD 50 to SGD 80 per tonne by 2030.⁸ From 2019 to 2023, Singapore's carbon tax rate is set at SGD 5 per tonne of GHG emissions.

Starting from 2024, in lieu of paying the carbon tax, businesses will be able to use high-quality international carbon credits to offset up to 5% of their taxable emissions. There will also be a transition framework that may provide allowances for existing companies for a share of their emissions, though details have yet to be announced.⁹

[1] See Strategy Group, Prime Minister's Office: Singapore's Enhanced Nationally Determined Contribution and Long-Term Low-Emissions Development Strategy, 28 February 2020.

[2] See Strategy Group, Prime Minister's Office: Singapore Commits to Achieve Net Zero Emissions by 2050 and to a Revised 2030 Nationally Determined Contribution; Public Sector and Jurong Lake District to Lead The Way with Net Zero Targets; 25 October 2022.

[3] Written answer by MND on current and projected levels of carbon emission by the built environment sector and plans to enhance green financing for construction companies; 2 November 2021.

[4] See the BCA circular: Amendments to The Building Control (Environmental Sustainability) Regulations 2008 and adoption of the Code For Environmental Sustainability of Buildings (edition 4.0) and Code on Environmental Sustainability Measures for Existing Buildings (edition 3.0); 1 September 2021.

[5] Section 7 of the Carbon Pricing Act 2018.

[6] Section 12 of the Carbon Pricing Act 2018.

[7] Section 16 of the Carbon Pricing Act 2018.

[8] See the NEA: Climate Change: Carbon Tax.

[9] Baker McKenzie Wong & Leow client alert: Singapore Budget 2022: Key tax updates, March 2022.