Tracking Carbon Tax Revenue Allocation Across Decarbonisation, Business Transition and Household Support, and Mechanism for Independent Oversight
Ministry of Sustainability and the EnvironmentSpeakers
Summary
This question concerns Mr Gabriel Lam’s inquiry regarding the allocation of carbon tax revenue for decarbonisation, business support, and household relief, and whether an independent tracking mechanism exists. Minister for Sustainability and the Environment Grace Fu Hai Yien explained that expenditure on decarbonisation and energy efficiency has comprised nearly a quarter of carbon tax revenue collected since 2019. These funds facilitate projects like the Resource Efficiency Grant for Emissions for manufacturing facilities and data centres, with spending expected to increase for nascent technologies. The Minister noted that revenue tracking is managed internally by relevant Government agencies in the same manner as other taxes and fees. There are currently no plans to establish a separate independent mechanism to track the distributional impact of the carbon tax revenue.
Transcript
33 Mr Gabriel Lam asked the Minister for Sustainability and the Environment (a) what percentage of the carbon tax revenue collected since 2024 has been channelled to (i) facilitate the development of decarbonisation solutions (ii) support businesses' shift to new low-carbon and more energy-efficient solutions and (iii) cushion the impact on households; (b) whether there is an independent mechanism to track the distributional impact of such revenue; and (c) if not, whether such a mechanism will be established.
Ms Grace Fu Hai Yien: The Government channels carbon tax revenue towards facilitating the development of decarbonisation solutions which require significant capital investment and supporting businesses' shift to new low-carbon and more energy efficient solutions.
Expenditures on decarbonisation and energy efficient solutions, thus far, comprise almost a quarter of carbon tax revenue collected since 2019. This includes support for manufacturing facilities and data centres under the Resource Efficiency Grant for Emissions (REG(E)), for them to undertake eligible projects that improve their energy efficiency and reduce emissions. We expect expenditures on decarbonisation to increase to support the implementation of future decarbonisation measures that are currently still in development and catalyse the development of nascent low-carbon technologies.
The tracking of the collection and expenditure of the carbon tax revenue is managed internally by the relevant Government agencies, like other taxes and fees. There is no intention to set up a separate tracking mechanism.