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Supermarket plastic bag charge raises millions of dollars, but questions emerge over fund usage
While most proceeds support environmental and social causes, some retailers are using funds for internal operations – drawing scrutiny from a green group.
Koh Wan Ting
06 Feb 2026 06:00AM (Updated: 06 Feb 2026 10:25PM)
SINGAPORE: In the more than two years since Singapore introduced mandatory charges for plastic bags at major supermarkets, the initiative has raised millions of dollars – but not all the money is going where environmental advocates believe it should.
The Singapore Environment Council (SEC) has flagged concerns about some retailers’ use of the proceeds, particularly where substantial amounts fund internal business operations rather than external causes.
"One supermarket chain spent over 80 per cent of the proceeds to upgrade its refrigeration system. Another supermarket spent proceeds on vehicular electrification trials," said Mr Cheang Kok Chung, SEC's executive director.
"Although these measures can be deemed to help reduce emissions, they could be expected of any business committed to sustainability."
At the extreme end, supermarket operator Hao Mart used all its proceeds – save for the Goods and Services Tax (GST) – on its own operating expenses, including costs related to administering the bag charge. The retailer collected S$32,000 (US$25,000) from the plastic bag charge in the second half of 2023 and S$21,000 in 2024.
"Such use of the charges may undermine public support for the policy," Mr Cheang said.
WHERE THE MONEY GOES
Since Jul 3, 2023, larger supermarket operators with annual turnover exceeding S$100 million have been required to charge at least 5 cents for each disposable carrier bag provided to customers.The initiative collected more than S$3 million in its first six months, according to the National Environment Agency (NEA). For the full year of 2024, that figure doubled to more than S$6 million, as operators provided 129 million disposable bags to customers.
The supermarket chains under the scheme include FairPrice, Sheng Siong, Cold Storage, Giant, Prime Supermarket, Don Don Donki and Phoon Huat. Two retailers – Hao Mart and Ang Mo Supermarket – are no longer part of the scheme after their annual turnover fell below the S$100 million threshold, although both still continue to levy a charge for plastic bags.
To ensure transparency and accountability, supermarket operators are required to publish annually the amount of proceeds collected and how the funds are used.
While NEA strongly encourages retailers to donate proceeds to environmental and social causes, this is not mandatory and operators have discretion over how the funds are used.
CNA’s review of the operators’ reports found that the money was spent on a mix of internal initiatives and external donations.
NTUC FairPrice Group – which includes convenience chain Cheers – collected the highest amount, with S$1.68 million in the second half of 2023 and S$3.41 million in 2024.
Around half or more went to its FairPrice Foundation to support social welfare programmes. The cooperative channelled funds into developing electric vehicle infrastructure at its premises to encourage contractors to switch to electric vans, and exploring the possibility of replacing diesel-powered heavy vehicles with electric ones.
It also used proceeds to engage a packaging consultant to reduce virgin plastic use.
Additionally, S$204,000 of the proceeds from 2023 and S$135,000 from 2024 went to WWF-Singapore’s conservation fund and its consumer education programme on sustainable food production and consumption.
Sheng Siong, which collected S$760,000 in the second half of 2023 and S$1.56 million in 2024, donated most of its proceeds to three iterations of the President’s Challenge, which supports various social causes. A small portion of its 2024 proceeds went to the National Parks Board’s Garden City Fund.
Cold Storage and Giant, both owned by Malaysian retail group Macrovalue, reported their spending jointly. The supermarkets collected S$542,500 in 2023 and S$1.01 million in 2024, with most of it spent on upgrading their refrigeration system. The rest of it went to the Chingay Parade and other community events and services.
Prime Supermarket's 2023 reports, which were uploaded to its website on Friday (Feb 6), showed S$152,400 collected, with most of the proceeds going to community initiatives for the disadvantaged. A smaller portion – 32.2 per cent – was used to provide free reusable bags for customers as part of a campaign.
Its 2024 reports showed nearly S$337,000 collected, most of which went towards grassroots initiatives.
Don Don Donki, managed by Pan Pacific Retail Management (Singapore), collected S$143,900 between Jul 3, 2023 and Mar 31, 2024, and over S$90,000 from Apr 1, 2024 to Mar 31, 2025. The retailer split proceeds equally among three beneficiaries in both years: Zero Waste SG, The Food Bank Singapore and Food from the Heart.
Phoon Huat collected between S$3,700 and S$4,400 in 2023 and 2024, donating most of the funds to social service agencies and running a baking class for beneficiaries.
Ang Mo Supermarket collected S$33,200 in 2024, splitting the funds equally between the Marymount and Punggol Shore Citizens' Consultative Committee Community Development and Welfare Fund - Education Fund.
CNA could not find published reports for Marks & Spencer, which was added to the scheme in 2025.
RETAILERS DEFEND INTERNAL SPENDING
In response to the SEC's observations, Cold Storage said its refrigeration upgrades were undertaken “with the clear objective of accelerating the adoption of more energy-efficient and environmentally friendly technologies”.A spokesperson added that the retailer remains committed to supporting social and environmental causes through planned programmes.
FairPrice Group said it was committed to reinvesting proceeds back into the community and to support decarbonisation across its value chain. A spokesperson pointed out that nearly S$2.7 million has been donated to the FairPrice Foundation, specifically ringfenced for sustainability education.
The foundation has also pledged S$3 million over the next three years to sustain the operations of The Carbon Gallery, an experiential hub focused on raising carbon literacy.
Hao Mart's senior vice-president of operations, Mr Jupri Suep, attributed the decision to use proceeds for operating expenses to business losses. He said the retailer is in discussions with NEA over last year’s proceeds.
The retailer has closed most of its outlets in recent years. Its latest prominent exit was from Taste Orchard, where it previously operated Eccellente supermarket across multiple levels.
ARE CONSUMERS SUBSIDISING BUSINESSES?
A Nanyang Technological University (NTU) professor said supermarkets that charge for plastic bags effectively pass the cost to consumers, lowering their own business costs.If part or all of the proceeds go towards reducing firms’ operational costs, it would be a "clear case of consumers directly increasing the profits for the firms", said Professor Euston Quah, director of NTU's Economic Growth Centre.
The spending reports also raise questions about whether consumers are effectively subsidising businesses' sustainability initiatives – costs that companies should bear themselves.
"When firms are able to pass these costs of carrier bags to consumers and use their proceeds whether to purchase green equipment or pursue green innovation, these would imply that consumers are subsidising firms to grow green," said Prof Quah.
"This absolves the firms from their own responsibility to contribute to society's green movement."
Assistant Professor Sreeja Nair from the Lee Kuan Yew School of Public Policy said the challenge lay in how information about the charge was communicated and understood by the public.
She noted that consumers may differ in what they consider a worthy use of proceeds.
"While some may expect direct support for environmental causes, others may prefer these proceeds going to community or social initiatives, while still others may remain indifferent," Asst Prof Sreeja Nair said.
"If sustainability and societal well‑being are perceived as distant or abstract goals for the public, the rationale for the disposable carrier bag charge may not fully resonate," she added. "Messaging must therefore connect the fee to tangible outcomes, showing how individual action contributes to collective benefit."
While compliance is ensured because the charge is mandatory, she said legitimacy depends on whether consumers perceive it as fair.
For the scheme to gain lasting acceptance, it must be seen not as an arbitrary levy, but as "a fair mechanism that aligns individual choices with collective responsibility towards the environment".
"In this way, the fee becomes more than a deterrent for not using plastic bags. It is a permanent reminder that sustainability carries shared costs."
