According to reports, Singapore will soon provide refiners and petrochemical companies with up to 76% carbon tax refunds for planned carbon taxes in 2024 and 2025 to help these companies ease cost pressures.In the increasingly fierce competition with competitors in other regions, tax incentives will provide an important buffer for refiners' profit margins.

According to data from Fei's Global Energy Consulting Company and Wood Mackenzie, calculated at an emission tax rate of US225 per ton, the cost of carbon tax for refineries is estimated to be between 80 cents and US11 per barrel of crude oil, accounting for nearly a quarter of the current profits of Singapore refineries.

According to the new carbon emission tax rate that took effect at the beginning of the year in Singapore, before 2025, companies with annual carbon emissions of more than 25,000 tons will be required to pay a tax of US225 per ton, while from 2019 to 2023, the tax will be US55 per ton.Previously, the Singapore government announced that the carbon tax will rise to US445 per ton from 2026 to 2027 and to US550 to US880 per ton in 2030.

Sources said that major companies in the refining and downstream industries have received transitional tax rebates to reduce the tax burden, and the final cost has been reduced to between 6 and 10 US dollars per ton of emissions.According to the regulations of the Singapore government, these refineries and downstream companies are required to pay a carbon emission tax of US225 per ton before applying for a tax refund.This preferential policy may last until 2025, and the discounted tax rate may be re-discussed after 2026.

Singapore launched a transition framework policy last year to support the energy transition of emission-intensive and trade-based companies such as chemicals, electronics, and biomedical manufacturing.A spokesperson for Singapore's Ministry of Trade and Industry said that these quotas only account for a portion of corporate emissions, and the remaining emissions will continue to be subject to the current carbon tax rate.The National Environment Agency of Singapore said that at present, companies can also choose to use international carbon credits purchased or accumulated in other parts of the world to offset up to 5% of taxable emissions.

In the face of fierce competition, Shell sold its refineries and petrochemical facilities on Maui and Jurong Islands in Singapore.Since then, the sharply increased carbon tax has become a hot topic in Singapore's refining industry.