On 4 October 2023, the Ministry of Sustainability and the Environment and the National Environment Agency shared a set of criteria for international carbon credits (“ICCs“) under the ICC Framework. The ICC Framework will allow carbon tax-liable companies to use eligible ICCs to offset up to 5% of their taxable emissions commencing 1 January 2024. The criteria detailed in the Carbon Pricing Act 2018 – Carbon Pricing (Carbon Tax and Carbon Credits Registry) (Amendment) Regulations 2023 (which amends the Carbon Pricing (Carbon Tax and Carbon Credits Registry) Regulations 2020) (“Prescribed Criteria“) takes effect on 1 January 2024. The Prescribed Criteria aims to ensure that ICCs are of “high environmental integrity” that companies may use to offset taxable emissions.
This Update outlines key aspects regarding the use of eligible ICCs to pay carbon tax as well as the Prescribed Criteria under Singapore’s legislation and ICC Framework, along with our comments.
For more information, click here to read the full Legal Update.
