Mr Speaker, the PM signaled in his Budget speech that the government is considering the lower end of the planned carbon tax range for 2030, citing weaker global climate momentum. While we still have time before the decision is made, how does the government plan to ensure that there is enough pressure on large emitters to decarbonise. With the recent carbon tax increase, how is the government evaluating its impact and progress on decarbonisation, given that the allowance system makes the decisionmaking process more complex both for firms and for price setters. Is progress being made fast enough? Have KPIs for allowances been met? Which allowance recipients are resisting decarbonisation despite being given time to do so?
What is the government’s evaluation of the carbon tax’s effect on the development of domestic renewables projects and projects importing low-carbon electricity to Singapore? Has the constrained supply of high-quality international carbon credits pushed Singapore towards higher reliance on low-carbon electricity import projects?
These are pertinent questions as our electricity use accelerates, particularly with the government’s backing of the expansion of data centre capacity. While the government should support higher levels of low-carbon electricity use in data centres, beyond the 50% stated in the second Data Centre – Call for Application, is the increase in demand for electricity hampering our decarbonisation efforts? Are big tech firms also outcompeting smaller users like SMEs and households for cheaper renewable electricity? Even without the AI-driven explosion in data centres, green electricity is in high demand due to increased electrification.
The government should consider tougher measures on data centres and other key polluters alongside the carbon tax. Frameworks already exist in the form of efficiency standards and grants to support progress. What is needed is ambition to scale up incentives and disincentives, alongside more clarity on what our emissions roadmap looks like in the industrial sector.
