Singapore mulls keeping carbon tax at low end of target

Spanish Market: Electricity, Emissions, Hydrogen
13/02/26

Singapore is considering keeping its carbon tax at the lower end of the targeted range against the backdrop of slowing global momentum on climate action, said prime minister Lawrence Wong at the unveiling of the country's budget on 12 February.

Singapore's carbon tax is now at S$45/t ($35.60/t) and is planned to reach $50-80/t by 2030. But in light of international developments, Singapore is assessing its carbon tax trajectory carefully, Wong said. Singapore currently has the highest carbon tax rate in Asia, and "if global climate momentum continues to weaken, we may need to position ourselves towards the lower end of the $50-80/t range by 2030," he said.

Some governments are scaling back their climate ambitions, but this is not an option for Singapore, said Wong. A "key pillar" of the country's climate strategy is the carbon tax, which has already had an impact, with firms investing more in low-carbon solutions and raising energy efficiency, he added.

Separately, Singapore has achieved its 2030 solar deployment target of 2GW peak (GWp) ahead of schedule, and it has therefore raised the target to 3GWp by 2030, said Wong. Beyond 2030, Singapore will continue to maximise solar deployment across all viable surfaces, and will progressively set higher targets.

Singapore is also "advancing plans" to import low-carbon electricity from the region, said Wong, although further details were not provided. The country aims to import 6GW of low-carbon power by 2035 and has already signed a few supply agreements with neighbouring countries to achieve this.

The country is looking at opportunities to diversify its energy mix, including hydrogen, geothermal energy and nuclear power.

In terms of transport, the country aims to achieve 100pc cleaner vehicles by 2040, and incentives are already in place for the early adoption of electric vehicles, with charging infrastructure also being expanded across the country.

Singapore also targets 1pc sustainable aviation fuel (SAF) use for flights departing the country this year. And in shipping, the government is looking at developing low-carbon ammonia bunkering solutions on Jurong Island.

By Prethika Nair

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13/02/26

US climate rollback set to raise gasoline prices

Washington, 13 February (Argus) — US president Donald Trump's elimination of all federal greenhouse gas standards on cars and trucks could raise gasoline prices by as much as 29pc by 2050, according to projections prepared by his own administration. That higher spending on fuel, along with other effects caused by repealing the tailpipe standards, would result in net losses for consumers of about $180bn through 2055, according to a primary scenario the US Environmental Protection Agency (EPA) published on Thursday in support of its regulatory rollback. The agency's "Scenario A1" shows gasoline prices rising by 75¢/USG by 2050, in constant dollar terms, as a result of higher fuel demand coming from less fuel-efficient but cheaper cars and trucks. Trump on Thursday cited what he said were "trillions of dollars" in cost savings as a reason for repealing tailpipe standards. But EPA's own modeling shows the potential savings to consumers would be far less, or even result in net costs for consumers. That is before accounting for adverse health consequences caused by air pollution or effects of climate change. "By EPA's own analysis, American families will pay billions more in fuel costs. To make matters even worse, many people will be burdened with increased healthcare costs from the increase in air pollution that vehicles will be allowed to spew," said Katherine García, director of Sierra Club's Clean Transportation for All Campaign. EPA administrator Lee Zeldin said on Thursday that the tailpipe rollback would "eliminate over $1.3 trillion of regulatory costs", a figure pulled from agency projections largely focused on savings from lower vehicle prices through 2055. But that headline figure disregards key costs under the rollback, such as additional spending on fuel and repairs that would total nearly $1.5 trillion over the same time span, dwarfing the potential savings, agency modeling shows. The extra fuel demand from the rollback has been welcome news for oil producers, who contend EPA's tailipe standards forced consumers to purchase electric vehicles and other models they did not want. Before the rollback, the US Energy Information Administration's reference case in its Annual Energy Outlook showed fuel demand from light-duty vehicles falling to 4.9mn b/d by 2050, down from 8.3mn b/d this year. Oil groups have cheered the demise of EPA's vehicle greenhouse gas standards, even as they push to retain emission standards for oil and gas facilities. "EPA properly concludes that the Clean Air Act does not provide it with the authority to regulate certain greenhouse gas emissions," Independent Petroleum Association of America chief executive Edith Naegele said. EPA prepared alternative scenarios that show increased benefits from the rollback. In technical documents released on Thursday, EPA said "Scenario AI" does account for policies Trump is taking "to drive down the price of gasoline and diesel", so it modeled an alternative scenario where oil prices plunge to $47/bl by 2050, compared with a reference case of $91/bl. In that price scenario, net savings would reach $250bn by 2055. EPA also created scenarios showing even higher savings by assuming consumers only cared about the first 2.5 years of fuel savings when buying a more fuel-efficient vehicle. None of EPA's cost-benefit scenarios accounted for any of the negative health effects of more air pollution, or damage from climate change. Under a recent policy change, EPA assigned a value of $0 for all adverse health effects of regulatory changes. EPA expects the rollback will increase greenhouse gas emissions by 8.3bn metric tonnes of CO2-equivalent, equivalent to about 1.5 years of greenhouse gas emissions from the US. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Carbon — In Focus: EU ETS in political crosshairs

13/02/26

Carbon — In Focus: EU ETS in political crosshairs

London, 13 February (Argus) — Political focus on the EU emissions trading system (ETS) has intensified noticeably in the past two weeks, weighing on prices, as leaders and policymakers consider how the scheme's approaching review can be used to address its implications for industrial competitiveness in the bloc. The benchmark front-year EU ETS contract dropped by almost 6pc on the day on 5 February, in reaction to media reports suggesting that the European Commission was planning to weaken the system. EU officials were quick to express "surprise" at a "mix-up" in reports on the possible extension of free allowance allocation beyond 2034, emphasising that the trajectory and ways of aiding industrial decarbonisation will be part of the EU ETS review, legislative proposals for which are expected to be published by the European Commission early in the third quarter. The EU ETS is increasingly under scrutiny as politicians look to address the high costs local industries are facing, threatening its competitiveness on the world stage. Emissions prices in reality only contribute a portion of such rising costs, which are driven by numerous factors feeding into higher energy costs and uncertain market outlooks. The global macroeconomic prospects are constantly exposed to geopolitical risks such as the Russia-Ukraine conflict — which has had a large impact on natural gas supply, or US tariff threats. But as the EU ETS is a political instrument, set to undergo a major review later this year, it is seen as a much easier opening to address costs than wider energy markets, which are at the whim of wider economical and political factors. Discussions came to a head as industrials and politicians gathered in Belgium for the European Industry Summit on 11 February — where industry seized the opportunity to lobby for adjustments to the system — and an informal EU leaders' summit the following day. "After 20 years in the ETS we might have gone in the wrong direction," said Marco Mensink, director general of chemical industry association Cefic, which organised the summit. German chancellor Friedrich Merz — whose CDU party is staunchly pro-business — weighed in on the matter, stating that "this system is not the system to generate new revenues". "We should be very open to revise it or at least to postpone" the ETS, he said, without specifying what such a revision or postponement would entail. He softened his comments the next day at the end of the leaders' summit, terming the ETS as an "effective instrument" in need of frequent revision to make sure it continues to work effectively. But carbon prices had already fallen in reaction to his initial statement, dropping another 7pc in all on 12 February to stand at their lowest levels since August. And comments by other EU leaders following the summit reinforced a general push to reform the system, even if details on how to do so were scant. French president Emmanuel Macron said he wants "concrete" solutions from the European Commission in March to reduce the ETS price burden. Belgian prime minister Bart De Wever urged "intelligent" adaptations to industry's "too high" CO2 costs. And Czech prime minister Andrej Babis reiterated his position that ETS allowances are "destroying" his country's industry. Commission president Ursula von der Leyen, who also attended the meeting, defended the ETS's "clear benefits", and pointed to its market stability reserve as an option to "modulate" the price. She had at the industry summit the previous day already emphasised that member states invest less than 5pc of ETS revenues in industrial decarbonisation, saying that "this will be a core focus of the upcoming reform of our ETS this summer." A review of the system is not a surprise — it has been written into the EU ETS's governing directive since 2023. But lack of visibility on which changes member states will push for has left participants with an uncertain outlook. "The events of the last two days have amply demonstrated that confidence requires political as well as regulatory stability," the International Emissions Trading Association said. "The EU ETS must remain protected from ad hoc political interventions that risk undermining investor confidence and weakening Europe's decarbonisation pathway." The still significant long position held by speculative participants leaves prices open to extensive downside risk. Investment funds held an outright long position of 118.3mn allowances in the EU ETS at the Intercontinental Exchange (Ice) in the week ending 6 February, commitment of traders data published by the platform on Wednesday show. UK ETS tumbles Despite not being at the centre of political discussions, allowances under the UK ETS have seen even larger losses this week as wider uncertainty surrounding the tenure of prime minister Keir Starmer prompted some participants to close out positions in the market. The benchmark front-year contract declined by 19pc cumulatively over the past three sessions. Similarly to the EU ETS, investment funds have built up a substantial outright long position of 22.1mn permits in the UK ETS at the Ice, posing downside risk. And price moves tend to be exaggerated in the UK ETS compared with the EU ETS because of the former market's relative lack of liquidity. By Victoria Hatherick EU, UK ETS front-year contracts €/t CO2e Investment fund long positions on Ice '000 allowances Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Japan’s 50MW Tomato biomass unit begins operations

13/02/26

Japan’s 50MW Tomato biomass unit begins operations

Tokyo, 13 February (Argus) — Japan's 50MW Tomato biomass-fired power plant came on line, holding company Hokkaido Electric Power (Hepco) announced on 13 February. The biomass plant, located in Japan's northernmost Hokkaido prefecture, started commercial operations today. It will burn around 200,000t/yr of wood pellets, mainly imported from Vietnam and Indonesia. The facility is designed to generate up to 340GWh/yr of electricity, which will be sold under the country's feed in tariff (FiT) scheme at a fixed price of ¥24/kWh (16¢/kWh) for approximately 20 years, according to Hepco. The start-up was delayed from an initially scheduled date of April 2025 . The operating company, Tomato Biomass Power, is a joint venture 80pc owned by Singapore-based fund company Equis and 20pc by Japanese utility Hepco, which also handles plant maintenance. Hepco aims to install a carbon capture and storage (CCS) system — currently under development — onto the biomass plant around 2030-31 to achieve carbon-negative operations. Hepco is also researching technologies to produce methane from hydrogen and CO2 captured at power plants, the company said. Hepco further plans to pursue co-firing with coal and black pellets, which are also known as torrefied pellets, at its thermal power plant . Black pellets have a higher calorific value along with better water resistance and grindability compared with regular wood pellets, enabling them to be handled similarly to coal — although they remain more expensive than coal and conventional biomass fuels. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Australia should have CBAM on some commodities: Review

13/02/26

Australia should have CBAM on some commodities: Review

Sydney, 13 February (Argus) — Australia should consider introducing a carbon border adjustment mechanism (CBAM), starting with imports of cement and clinker and potentially expanding to products such as hydrogen, steel, and ammonia and derivatives like urea and ammonium phosphate, according to a key report released by the government today. The identified commodities face risk of future carbon leakage from imports, which could lead to greenhouse gas (GHG) emissions being relocated from Australia to overseas. The carbon leakage review , led by Australian National University professor Frank Jotzo between July 2023 and March 2025, assessed leakage risks in 2030 for all 75 trade-exposed commodities under Australia's safeguard mechanism across 42 commodity groups. The review was announced as part of the 2023 reform of the safeguard mechanism While current safeguard mechanism settings are effective at mitigating carbon leakage risk in the short- to medium-term, the declining emissions baselines under the scheme could put some of the identified sectors at a "more significant" risk over time, according to the report. Cement and clinker first, others to follow Risks are higher for cement and clinker, and the implementation of a border carbon adjustment for these products "is likely to be simplest," according to the report. Australian production of lime and glass, on the other hand, is only partially covered under the safeguard mechanism, and a CBAM application would face more complexity. Hydrogen, steel, and ammonia and derivatives carry material carbon leakage risks, but feature more complexity with respect to production methods, supply chains, and product diversity. Some of these products are also only partially covered by the safeguard mechanism. The government should also consider potential risks for a second group of commodities, consisting of aluminium and alumina, refined petroleum, and pulp and paper. These products face mixed evidence related to leakage risk indicators and analysis of trade and investment leakage, but the government could assess them in the forthcoming review of the safeguard mechanism scheduled for the July 2026-June 2027 financial year and consider particularly the suitability of arrangements for emissions-intensive trade-exposed activities for all commodities under the scheme. Preference for fees instead of ACCU surrenders The safeguard mechanism covers over 200 individual facilities emitting more than 100,000t of CO2 equivalent (CO2e) in a compliance year across the oil and gas, mining, manufacturing, transport and waste sectors. Facilities earn Safeguard Mechanism Credits (SMCs) if their reported scope 1 emissions fall below their baselines, and must surrender SMCs or Australian Carbon Credit Units (ACCUs) if emissions exceed the threshold. If the Australian government decides to pursue a CBAM, it should consider applying liabilities only to scope 1 emissions that exceed the relevant safeguard mechanism baseline at the time of import. The assessment should be based on explicit carbon prices only, and the liability should account for the differences between the effective carbon price paid in the originating country and an Australian benchmark price. While importers could, in principle, clear the liability by paying a fee or surrendering ACCUs, there was "broad support" for the fee option during the consultation, according to the report. Surrendering ACCUs would more closely reflect domestic requirements, but trading in ACCUs has legislative requirements that would have to be met by importers which would require careful consideration, the report warned. The ACCU purchase option would create additional demand for the product, raising prices. But stakeholder feedback "reflected concerns about the potential impact on ACCU supply" if these carbon credit units were used to meet carbon border adjustment liabilities. The government should not consider a carbon border adjustment that provides rebates for exports, as that would be inconsistent with Australia's emissions reduction targets and could raise considerable international trade law concerns. "Rebating emissions obligations to exports would effectively exempt production for export from emissions reductions obligations, running counter to overall policy objectives towards net zero and increasing the required emissions reductions elsewhere in the economy," the report read. Teba provisions could be removed Trade-exposed, baseline-adjusted (Teba) facilities operating in emission-intensive sectors that might face unfair competition from imports from countries with weaker or no emission reduction policies currently benefit from discounted baseline decline rates under the safeguard mechanism. Decline rates can be as low as 2pc for non-manufacturing sectors or 1pc for manufacturing sectors, compared with the standard 4.9pc/yr declining rate until 2030. The Teba provisions for a commodity should be removed once a border carbon adjustment is fully implemented for that commodity, according to the review. Limited impact on downstream activity The report also noted that analysis indicates the impact of a carbon border adjustment on downstream activity, such as construction, would be "very limited". "The review's analysis suggests that the maximum price impacts on final goods that incorporate commodities that may be subject to a border carbon adjustment, such as wind farms, house construction and crops like wheat, would be vanishingly small as a share of product prices," the report said. The government said today it will continue to consult on carbon leakage with affected industries, and will consider the report's recommendations in the safeguard mechanism review. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US E15 group floats fewer biofuel mandate waivers

12/02/26

US E15 group floats fewer biofuel mandate waivers

New York, 12 February (Argus) — US lawmakers are weighing a proposal that would make it harder for oil refiners to win exemptions from annual biofuel mandates but still let regulators decide which companies deserve relief. The US House of Representatives last month punted on legislation that would allow year-round sales of 15pc ethanol gasoline (E15) and revamp the biofuel quota program, instead tasking a "rural domestic energy council" of more than 20 Republican lawmakers with hashing out reforms. One provisional plan circulated by the council this week would cap the total volume of future exemptions, according to four people familiar with the proposal and a draft framework shared with Argus . The US Environmental Protection Agency (EPA) requires oil companies to annually blend biofuels or buy Renewable Identification Number (RIN) credits from those that do, while letting small refineries bid for hardship exemptions that can save them tens of millions of dollars. Exemption decisions have varied wildly over time, from mass denials under former-president Joe Biden to generous exemptions under President Donald Trump that has frustrated farmers. 450mn RIN cap The House task force's proposal would make the program somewhat more predictable. EPA would initially have to exempt 450mn RINs from annual biofuel obligations but no more, prioritizing companies that prove the most hardship. That would be a substantial drop from the nearly 1bn RINs the Trump administration has already exempted from 2024 quotas, initially set at 21.5bn credits. If mandates rise over time, EPA must proportionally raise that 450mn RIN cap. One gallon of corn ethanol generates 1 RIN, while more energy-dense fuels like renewable diesel earn more. Unexpected exemptions can hurt RIN prices, cutting into biorefinery margins and curtail demand for crops like corn and soybeans. Other changes would limit — but not entirely eliminate — EPA's discretion. Regulators would have to largely stick to their current system for measuring hardship, which factors in criteria like a refinery's access to capital. EPA would also have to consider "additional materials" determined by the council to limit "abuse", though the framework does not elaborate on what this would entail. An earlier proposal backed by the American Petroleum Institute and ethanol groups would have restricted exemptions to companies with limited collective refining capacity, angering some larger companies that would have lost the ability to win exemptions for smaller units they own. The latest proposal would leave it to EPA to decide which facilities deserve relief, letting small companies, mid-sized refiners like Delek and even oil majors like Chevron still compete for a smaller pool of exemptions. EPA could not force larger oil companies to blend more biofuels to offset exemptions for their smaller rivals and would have to automatically extend exemptions if it takes more than six months to weigh a company's new request. The framework would also keep the program focused around fuels that retailers can easily blend, blocking EPA from ever reviving a Biden plan to credit biogas that powers electric vehicles. The proposal shared with Argus makes no explicit mention of removing summertime limits of E15, though that is the top priority for farm-state lawmakers on the council keen to help corn farmers. Trump has made clear too he wants to expand E15 access . The framework would require EPA to finalize E15 labeling and storage standards. The proposal includes no details on timing. Some biofuel advocates have pushed delaying any changes to 2028, worried that near-term shifts could delay the Trump administration's goal of finalizing new biofuel quotas before April. Not final, still an uphill battle The framework is just one idea the council is weighing and could change. A legislative source familiar with the debate told Argus that "nothing definitive has been decided". The council has a goal of aligning around fuel market reforms by 15 February. Afterwards, any plan would likely need to be added to larger legislation to have a chance of passing, such as a farmer aid package. Advocates of the plan face an uphill battle. Some Republicans, including in the US Senate, have long pushed for more substantial reforms to the biofuel mandates than what the task force has contemplated. The framework only alludes to these concerns, requiring a government watchdog agency to regularly study how the program impacts fuel prices and US refining capacity. Democrats, already frustrated they were left off the council, could also resist permanently excluding electricity. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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Singapore mulls keeping carbon tax at low end of target

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