UPDATED June 26, 2025
Image source: Meriç Dağlı via Unsplash
On 18 February 2025, Prime Minister Lawrence Wong delivered his Budget 2025 speech in Singapore’s Parliament, outlining a series of meaningful changes and additional support for Singaporeans and businesses.
In his speech, Prime Minister Wong covered sustainability as a core facet of Budget 2025. Recognising that the global momentum towards global climate efforts have slowed down, he urged for Singaporeans to remain resolute in our commitment towards decarbonisation and sustainability1.
Prime Minister Wong said, “We have come a long way in building today’s Singapore. But our journey is far from over. Our next decade will be pivotal, as we accelerate efforts to decarbonise our economy, and enhance the climate resilience of our built environment.”
Decarbonising Singapore’s transportation sector
Reducing carbon emissions from the transport sector—which currently accounts for about 15% of Singapore’s total emissions—remains a key pillar of Singapore’s net-zero roadmap. Under the Singapore Green Plan 2030, the Land Transport Authority (LTA) aims for 100% of vehicles on the road to run on cleaner energy by 20402. Efforts to achieve this goal have been progressively implemented. Prime Minister Wong affirmed that Singapore is making good progress, with more than half of newly registered vehicles since 2024 being either electric or hybrid.
For heavy vehicles like trucks and buses, the transition to electrification presents further challenges. Clean energy variants of heavy vehicles are significantly more expensive, limited to selective models and have less accessible charging infrastructure available. To accelerate the shift, the Government plans to implement two new schemes1: Heavy Vehicle Zero Emissions Scheme and an Electric Heavy Vehicle Charger Grant, with the purpose of incentivising the purchase of clean, heavy vehicles and the co-funding of charging infrastructure for electric vehicles (EVs).
On the other hand, Prime Minister Wong also noted that current internal combustion engine (ICE) vehicles currently pay fuel excise duties, which are taxed on petrol and diesel. To reach parity with ICE vehicles, lighter electric vehicles such as cars have been taxed with the Additional Flat Component (AFC), as a similar means of usage charge. Announced in Budget 2025, AFC will be implemented for electric heavy vehicles as well. This will be incrementally rolled out from January 2026 and in full force by January 2028.
For our public transport systems, Prime Minister Wong reiterated the importance of mass public transport as a critical means of reducing carbon emissions. Under the Bus Connectivity Enhancement Programme—launched in July 2024—an estimated S$1 billion will be invested over the next eight years to enhance our bus services. Additionally, over S$60 billion will be used to fund improvements to our train and rail network this decade, expanding and renewing our current fleet of trains and building a more cohesive rail network in Singapore. Further extensions are planned for the Thomson-East Coast Line, Downtown Line, and the Circle Line, with new rail projects like the Jurong Region Line and Cross Island Line also in the works. The aim is for 8 in 10 households to be within a 10-minute walk from a train station.
Coastal and Flood Protection Fund
Prime Minister Wong has warned against the dangers of climate change, predicting that the current global consumption rate of fossil fuels will lead to a one metre sea level rise by 2100. This places one-third of Singapore’s landmass in danger of coastal flooding, worsened by high tides, storm surges, and torrential rainfall. We have already seen flash floods occurring more frequently in Singapore during the rainy seasons.
In anticipation of these potential dangers, Prime Minister Wong announced the injection of an additional S$5 billion to the Coastal and Flood Protection fund. This will go towards the implementation of various coastal protection measures, including plans to reclaim an estimated 800 hectares of land on the east coast of Singapore—known as the ‘Long Island’ project3—announced in November 2023. The project raises the ground level and insulates the coast from rising sea levels. Simultaneously, it will create new homes and outdoor recreational parks under the country’s plans for urban development.
Further site studies are also being conducted on other coastal areas, such as the Greater Southern Waterfront and Changi which will be completed in 2025, whilst studies for Jurong Island and the Northwest Coast are still in progress. By thoroughly understanding our coastal regions, we can develop contingency measures and ensure the long-term survival of Singapore.
Climate change as a collective responsibility
On a more societal level, Prime Minister Wong reiterated that the responsibility of pursuing sustainability does not fall onto the Government alone, but onto the shoulders of all Singaporeans. Our consumption habits and ways of life have collective impacts on climate change.
To this effect, the Government enhanced the Climate Friendly Households Programme in 2024 and provided S$300 in Climate Vouchers to all HDB households for the purchase of energy and water efficient products. At Budget 2025, Prime Minister Wong announced an additional S$100 in Climate Vouchers, providing a total of S$400 per household. This has also been extended to Singaporeans living in private properties. The incentive was launched to encourage Singaporeans to be mindful of the energy wastage and environmental impacts associated with their household appliances, and to select appliances which are more environmentally friendly.
Future Energy Fund
Singapore is also emphasising the long-term development of energy infrastructure. In 2024, the Energy Market Authority announced the Future Energy Fund4—with an initial injection of S$5 billion—to support infrastructure investments for Singapore’s energy transition towards net-zero emissions. At Budget 2025, Prime Minister Wong stated that an additional S$5 billion will be allocated to this fund.
Given the Republic’s limited renewable resources, the potential deployment of nuclear power in Singapore will also be studied. Back in 2010, the possibility of conventional nuclear deployment in Singapore was dismissed and assessed to be unsuitable. The limited landmass and large opportunity cost associated with constructing nuclear facilities was a steep cost, and the associated risks with nuclear technologies would potentially impinge on the safety of Singaporeans.
However, with increased scientific advancements and innovations, new variants and modes of nuclear deployments have been made available. As Prime Minister Wong noted, one such development is small modular reactors (SMRs). According to the International Atomic Energy Agency, SMRs can produce a large amount of low-carbon electricity of up to 300MW(e) per unit. They have better safety features and are a fraction in size compared to conventional nuclear reactors and can be readily transported and installed.
In the systematic build-up of nuclear capabilities, Singapore has signed agreements with the US on civil nuclear cooperation5, enabling deeper cooperation consistent with highest international standards of safety, security, and nonproliferation. The Government is also working on similar nuclear cooperation deals with other countries, especially those who have expertise or capabilities in civilian nuclear power, especially SMRs. With an increase in funding of the Future Energy Fund, Singapore is investing to strengthen our energy infrastructure and diversifying our energy portfolio, bringing us closer to the target of net-zero emissions by 2050.
Nationally Determined Contributions (NDC) 2035
Despite its unique geographical challenges, Singapore continues to raise its sustainability ambitions, reinforcing its commitment to build a more resilient and low-carbon future. In its latest climate targets submitted to the UN on February 10, the nation pledged to cut greenhouse gas emissions to 45–50 million tonnes (Mt) by 2035, down from around 60Mt in 20306. This strengthened commitment provides a clear, structured pathway toward achieving net-zero emissions by 2050.
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