Carbon Capture Utilisation & Storage: Cutting Carbon Tax in Singapore

Singapore’s carbon tax is climbing, from S$25 per tonne in 2024–2025 to a targeted S$50–80 per tonne by 2030. For large industrial facilities emitting over 25,000 tonnes of CO₂e annually, this means a significant increase in operational costs.

For companies in chemical, energy, biopharma, and manufacturing industries, one strategic move stands out: invest in Carbon Capture, Utilisation & Storage (CCUS).

In this article, we explore how carbon capture works, why it’s an effective response to the carbon tax, and how it can integrate seamlessly into your plant operations.

Understanding the Carbon Tax in Singapore

The Carbon Pricing Act applies to industrial facilities with annual emissions of 25,000 tonnes CO₂e or more, covering around 80% of Singapore’s greenhouse gas emissions.

Carbon tax rates:

2019–2023: S$5/tCO₂e
2024–2025: S$25/tCO₂e
2026–2027: S$45/tCO₂e
By 2030: S$50–80/tCO₂e

From 2024, companies can offset up to 5% of their taxable emissions with high-quality international carbon credits, but the bulk of emissions reduction must be achieved through operational improvements or technology adoption.

Key takeaway: Without emission reduction measures, your annual tax burden will keep rising.

What Is Carbon Capture, Utilisation & Storage (CCUS)?

CCUS is a suite of technologies that capture CO₂ emissions from industrial processes, transport them, and either store them securely underground or reuse them in industrial applications.

How CCUS works:

Capture – CO₂ is separated from flue gas or process emissions using chemical solvents, membranes, or adsorption systems.
Compression & Transport – The CO₂ is compressed for transport via pipelines, ships, or trucks.
Utilisation or Storage –
- Utilisation: CO₂ can be used in enhanced oil recovery, industrial processes, or converted into useful products.
- Storage: Injected deep underground into geological formations for permanent storage.

Why CCUS Makes Sense Under the Carbon Tax

1. Direct Reduction in Tax Liabilities

Every tonne of CO₂ you capture and prevent from being emitted reduces your taxable emissions.
For example:
If your facility emits 50,000 tCO₂e/year, a 30% reduction from a CCUS could save:

15,000 tCO₂e × S$25 = S$375,000/year (2024–2025)
15,000 tCO₂e × S$45 = S$675,000/year (2026–2027)

2. Compliance and Competitive Advantage

Customers and investors increasingly demand sustainability commitments. A CCUS shows you are proactive, compliant, and future-ready.

3. Operational Integration

Carbon capture technology can be retrofit to existing plants, minimizing downtime and optimizing energy use.

Industries in Singapore That Benefit Most

Industries with high process emissions and subject to carbon tax:

Petrochemical & Refining
Chemical Manufacturing
Energy & Power Generation
Food & Beverage Processing (with large boilers)

Types of Carbon Capture Units

1. Post-Combustion Capture

Captures CO₂ after fuel combustion in boilers or furnaces.
Ideal for retrofitting existing plants.

2. Pre-Combustion Capture

Removes CO₂ from syngas before combustion.
Common in hydrogen and ammonia plants.

3. Oxy-Fuel Combustion

Burns fuel in pure oxygen, producing a CO₂-rich flue gas for easier capture.

Key Considerations Before Installing a CCUS

Emission Profile Assessment – Measure your current CO₂ output.
Space & Infrastructure – Allocate space for capture and compression units.
Energy Impact – Understand the power needs and integrate with existing utilities.
CO₂ Utilization/Storage Options – Plan for end-use or storage logistics.
Regulatory Compliance – Ensure adherence to NEA and international standards.

How We Can Help You Tackle the Carbon Challenge

We have partnered with a leading Carbon Capture, Utilisation & Storage (CCUS) research organisation to bring the latest, most effective carbon capture technologies to your plant.

This collaboration allows us to:

Apply cutting-edge CCUS research to real-world plant conditions.
Identify the most cost-effective capture solutions for your specific processes.
Support your team in design, integration, and authority submissions.
Align CCUS deployment with your long-term sustainability and cost-reduction goals.

Our expertise in engineering and construction of process plants, combined with the research partner’s innovation, ensures you get a high-performance CCUS system tailored to your needs.

Conclusion: Turn Carbon Tax Pressure into a CCUS Opportunity

With Singapore’s carbon tax set to rise sharply, the cost of inaction is growing. Carbon Capture, Utilisation & Storage (CCUS) offers a way to cut emissions, reduce tax liability, and strengthen your market position.

📩 Let’s explore how CCUS can work for your plant.
Contact our team to discuss a customised CCUS solution that fits your operations and budget.

Aug 13,2025