Singapore mulls introducing carbon offsetting legislation for airlines

Singapore Law Watch

11-07-2025

Singapore mulls introducing carbon offsetting legislation for airlines
Source: Business Times
Article Date: 11 Jul 2025
Author: Janice Lim
No time frame has been set yet for the draft law, but it will take a leaf from an existing legislation that mandates carbon emissions reporting.
Singapore is looking to draft a carbon offsetting legislation for the aviation sector, and is studying whether to introduce penalties for airlines if they fail to comply with its requirements.
While still in the works, the new legislation is likely to take reference from an existing one that mandates airlines to report their carbon emissions, said Ng Shao Hua, senior manager of global partnerships at Singapore's National Climate Change Secretariat on Wednesday (Jul 9).
That carbon reporting legislation, which came into effect in 2023, has provisions to fine airline operators for failing to make these disclosures.
Ng, who was speaking at the Asia Climate Summit organised by the International Emissions Trading Association, said: 'If you were to look at how we have framed our legislation on monitoring, reporting and verification (MRV) – where there are penalties, I think we are most likely to take reference from that.'
He added that no timeline has been set for the Bill to be introduced and debated in Parliament.
Ng was responding to a question during a panel discussion, on whether the Singapore authorities are looking to penalise airlines for not complying with carbon offsetting requirements in the future legislation.
The carbon reporting legislation was developed in line with an international programme to cut emissions from the aviation sector, known as the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), which has required participating airlines to report their annual emissions since 2019.
Besides disclosing their emissions, airlines which have signed up to Corsia are also obligated to purchase carbon offsets if their emissions go above 85 per cent of their 2019 levels. The International Civil Aviation Organization had developed the scheme in 2016 to stabilise the sector's net emissions.
Under the scheme's initial phases, airlines have until 2026 to purchase carbon offsets voluntarily. From 2027, however, it would become mandatory to do so.
Singapore is looking to start work on this carbon offsetting legislation, given that airlines would soon have to start buying carbon offsets to meet Corsia requirements.
This is because – even though carbon offsetting obligations began in 2021 – many airlines have not crossed the 85 per cent threshold in the last few years with the imposition of international travel curbs during the Covid-19 pandemic. They are, however, expected to cross this limit with their 2024 emission levels, said Ng.
Countries such as the United Kingdom and Canada, have already introduced penalty frameworks for airlines in their legislations.
Ng had said that Singapore had decided to take a step-wise approach on legislations, starting first with MRV, and then moving on to carbon offsets.
MRV requirements are low-cost and not difficult for airlines to meet, even voluntarily. However, Ng noted that getting airlines to buy carbon offsets might not be as easily accomplished without legislation in place.
'We do need that demand certainty and that will come from legislation. Because if countries are ready to put their foot forward to say: 'I will legislate this. I will be prepared to fine the airlines if they're not ready to comply, even though it's a voluntary scheme until 2026' – if there's a clear direction from governments, then I think that will be the game changer,' said Ng.
'So I think what is needed is how can we push more countries to come on board,' he added.
Source: The Business Times © SPH Media Limited. Permission required for reproduction.
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