Ladies and gentlemen,
1. Good Afternoon. It is my pleasure to join you at today’s ground-breaking ceremony of Shell’s pyrolysis oil upgrader unit at the Shell Energy and Chemicals Park Singapore.
2. Shell is a valued long-standing partner in Singapore’s Energy & Chemicals (E&C) sector. The company first set foot here 130 years ago when it anchored its first oil storage facility right here on Pulau Bukom. Back then, Singapore served as a base for the storage and regional distribution of kerosene.
3. Over the decades, the E&C sector in Singapore has grown steadily to include other high-value economic activities such as oil refining, the downstream production of petrochemicals and specialty chemicals as well as research and development (R&D) and headquarter (HQ) activities.
A HISTORICALLY IMPORTANT SECTOR FOR SINGAPORE’S ECONOMY
4. As the sector grew, so too did the space occupied by the industry. When it was first mooted under the 1991 Strategic Economic Plan, Jurong Island adopted a unique and trailblazing cluster development concept. This concept emphasises a symbiotic relationship between companies where the output of one plant would become the input for another plant, while sharing core capabilities and infrastructural facilities. This resulted in significant economies of scale. Many new E&C parks around the world have since followed suit and adopted this concept as well.
5. Today, we are one of the world’s leading E&C hubs. In 2020, the sector contributed to roughly 3% of our GDP and one-fifth of our output. It employs over 27,000 people, including many Singaporeans who enjoy well-paying jobs and good career progression. Some of the key leadership positions in E&C companies, including Shell, are also helmed by Singaporeans. These are just some of the direct benefits. The E&C sector also has strong spillovers to other sectors such as trading and logistics. Just as importantly, as an export-oriented sector, it helps plug Singapore into the world, helping us maintain our relevance, and gives the world a stake in our success.
6. The sector will continue to play a vital role in supporting domestic and global needs for many years to come. The current energy crisis we are going through is a reminder of the importance of the E&C sector to meet household and industrial needs. Our companies produce chemicals which are the building blocks for many everyday items, from diapers to plastics to healthcare items too. Globally, we expect demand for chemicals to see strong growth, and Singapore is well-positioned to capture this growth. But there is one major challenge which the sector must confront, and that is its impact on climate change.
ENABLING TRANSFORMATION TOWARDS A LOW-CARBON FUTURE
7. The United Nations has identified climate change as the single biggest threat to humanity. In response, many governments and organisations have stepped up their policies and regulations to promote sustainable practices and outcomes. Just earlier this month, the world congregated in Glasgow to discuss how to accelerate our efforts to combat climate change, recognising that we are racing against the clock. Consumers and investors have also increasingly placed emphasis on sustainability. The E&C sector has come under the spotlight, because of its high carbon footprint. But the good news is that the sector is not standing still. It has recognised the existential impact of climate change on its future and has started to respond proactively.
8. First, the E&C sector is in the midst of transiting their product portfolios towards lower-carbon fuels, renewables as well as sustainable chemicals. Some have also set ambitious climate targets for their businesses. For example, both Shell and BP have announced that they would write down up to US$17.5 billion and US$22 billion from their oil and gas portfolios respectively, as part of their net-zero emissions target for 2050.
9. Second, the E&C sector is a critical catalyst of the adoption of low-carbon technologies and fuels, given their deep capabilities in CO2 management, process engineering and advanced materials development. For example, three oil majors, Shell, Equinor, and Total have formed a consortium to develop the Northern Lights project, which aims to transport and store CO2 permanently in the North Sea. Here in Singapore, the E&C community is taking bold steps to decarbonise too. Neste’s biorefinery in Tuas, which produces exclusively renewable products, will be doubling its output to meet the rising global demand for renewable energy. I am delighted that besides the new pyrolysis oil upgrader unit that Shell is investing in today, Shell is also exploring a biofuels facility here in Singapore. These sustainable solutions will also help us achieve our decarbonisation goals for other sectors like aviation. It may not be too long before your flight out of Changi Airport is powered by sustainable biofuels made in Singapore too!
OUR PLANS FOR A SUSTAINABLE JURONG ISLAND
10. Building on these ongoing efforts, today, I am pleased to announce the release of the Sustainable Jurong Island report, here in Pulau Bukom where Singapore’s E&C sector began. This report, developed by EDB with support from JTC, EMA, A*STAR and NEA, details the Government’s ambitions and plans to transform Jurong Island into a sustainable energy and chemicals park – a vision which was first outlined in the Green Economy Pillar of the Singapore Green Plan 2030 that the Government announced earlier this year.
11. The Sustainable Jurong Island plan is centered around two focus areas – increasing output of sustainable products such as bio-based fuels and chemicals, and enabling sustainable production to reduce carbon emissions and pollution. Our aspiration is for the E&C sector to, first, increase its output of sustainable products by four times from 2019 levels and, second, achieve more than six million tonnes of carbon abatement per annum from low-carbon solutions, all by 2050.
12. We have also set milestones in our journey towards the 2050 goals. By 2030, we have set a target for the E&C sector to increase the output of sustainable products by 1.5 times from 2019 levels, ensure that the refineries and crackers in Singapore are in the top quartile of the world in terms of energy efficiency; and realise at least two million tonnes of carbon capture potential.
13. This plan will be supported by several infrastructure and support measures. Let me highlight two of them.
· First, A*STAR, EDB and JTC are working together to study the potential of a Carbon Capture and Utilisation (CCU) Translational Testbed on Jurong Island. This facility will leverage the latest test bedding technologies – such as modularisation and digitalisation – to accelerate the development of CCU technologies from feasibility at lab-scale to technology translation in industrial settings. Such infrastructure will help to support our research institutes and companies to develop and scale their CCU technologies in Singapore. More information will be released by A*STAR later today.
· Second, the Resource Efficiency Grant for Energy (REG(E)) and the Investment Allowance for Emissions Reduction (IA(ER)) schemes will be enhanced to support additional forms of emissions reduction activities such as carbon capture, utilisation and storage, in addition to energy efficiency improvements and the reduction of non-CO2 greenhouse gases.
14. These measures are the result of close consultations and partnership between the Government and industry. But we are only at the starting point of the journey, and we stand ready to partner like-minded companies and stakeholders to realise our vision of Jurong Island as the world’s preeminent energy and chemicals park, with the same pioneering spirit of its early days.
15. Constant evolution and the pursuit of excellence have allowed Singapore’s E&C sector to transform from its humble beginnings as an oil storage facility to the vibrant and competitive cluster of chemical plants we see today. Shell’s plans to transform its business in Singapore and become a net-zero emissions energy business is very much aligned with our vision for the E&C sector.
16. My hope is that Shell’s announcement today will inspire other companies to also take bold action to disrupt themselves and reimagine their future, and that Singaporeans, especially younger Singaporeans, will be excited about the possibilities and potential of our E&C sector even in a low-carbon future.
17. Thank you.