Speech by Minister Gan Kim Yong at the Joint Segment on the Singapore Green Plan Committee of Supply Debate 2022

“Green Economy and Energy Reset:

Opportunity in Necessity”

Mr Chairman,

1. I am encouraged by Members’ commitment to sustainability. Many have spoken about it and asked how we can do more to further our sustainability and climate ambition. Members also recognise that while Singapore must take bold steps to address climate change, we must remain pragmatic, managing the trade-offs while supporting our enterprises and helping our workers in the green transition.

2. A few days ago, I outlined in this House our economic strategies for Singapore.  Sustainability must underpin these economic strategies.

  a. We need to press on with our efforts to help our industries and enterprises decarbonise.

b. We need to help our enterprises and workforce harness sustainability as a competitive advantage, invest in innovation, and seize new growth opportunities in the green economy.

c. And we need to expand Singapore’s global connection to capture cross-border opportunities.

3. Singapore’s transition to a low-carbon economy is critical not only to ensure that we are aligned with global efforts on sustainable development, but also to leverage new opportunities in the emerging green economy.

4. Today, I will focus on the Government’s Green Economy Strategy. I will cover four key areas:

  a. First, decarbonise our industries, including the energy sector, which is a major emitter;

b. Second, drive new areas of growth in the green economy;

c. Third, invest in the development of new low-carbon solutions; and

d. Fourth, deepen our workforce capabilities.

Decarbonise our industries and energy sector

5. Many companies have already embarked on the sustainability journey, for they know that not doing so would risk them losing relevance and market share. We will continue to support industries and enterprises in their transition efforts.

6. Last November, we released the Sustainable Jurong Island report which outlines our plan to transform Jurong Island into a Sustainable Energy and Chemicals Park that operates sustainably, and produces sustainable exports and products. By 2030, we target for the E&C sector to increase its output of sustainable products by 1.5 times from 2019 levels, and achieve at least two million tonnes of carbon abatement per annum from low-carbon solutions.

a. For example, Shell Singapore has announced plans to halve its operational emissions by 2030 from 2016 levels.

b. Another example is specialty materials manufacturer, Arkema, which will be setting up a new bio-factory on Jurong Island to produce high-performance polymers made from castor beans. The new plant will enable Arkema to increase its polymer production capacity by 50% to meet the rising global demand for sustainable, high performance materials.

7. Decarbonising Singapore’s energy sector is key to greening Singapore’s economy. The energy sector powers our industries and households, and is a major emitter, contributing around 40% of Singapore’s direct emissions. The demand for energy will grow as we digitalise our economy and electrify transport and processes.

8. However, the energy transition is especially challenging for Singapore. Many of the renewable energy options adopted by other countries are not available to us. We have little wind, hydro, or tidal power. Solar is our most viable form of renewable energy, but we have heavy cloud cover and limited land available to expand our solar energy deployment. Despite these limitations and complexities, we must continue to forge ahead to transform the energy sector and reduce its carbon footprint.

9. First, we will enhance the energy efficiency of power generation plants.

a. Last year, we launched the second Genco Energy Efficiency (Genco EE) Grant Call to support generation companies in improving the efficiency of their existing power plants. EMA is evaluating the proposals and will announce the successful applicants later this year.

b. We also amended the Electricity Act to empower EMA to require electricity generation licensees to meet greenhouse gas emissions standards. EMA will consult the industry on the specific standards later this year.

10. Mr Saktiandi Supaat and Mr Shawn Huang asked for an update on our alternative energy deployment plans. They will be pleased to know that we are on track to achieving our solar deployment target of at least 2 gigawatt-peak (GWp) by 2030, which is equivalent to powering 350,000 households annually. Since 2015, our solar installed capacity has increased by over nine times to around 560 megawatt-peak (MWp) in 3Q 2021. We are finding ways to further accelerate solar deployment.

a. Our public sector agencies are taking the lead in solar deployment. Housing Development Board (HDB) recently launched the seventh SolarNova tender, to aggregate demand across HDB blocks and Government sites. Since 2020, Jurong Town Corporation (JTC) has put in place a mandatory solar deployment scheme for its lessees. To date, over 224 MWp of solar has been deployed across JTC’s industrial estates, or around 40% of our total solar deployment.

b. We are also exploring how we can overcome our land constraints. For example, PSA has installed vertical solar panels on the external walls of the PSA Tuas Port Maintenance Base Admin Building as a trial. The Government is also exploring the use of vertical solar panels on other surfaces.

c. To further expand the potential of solar deployment in Singapore, EMA is looking at ways to integrate energy storage systems into the grid, to overcome the intermittency of solar energy, and manage the stability and resilience of our energy grid.

11. But these efforts alone are not sufficient. Increasing the energy efficiency of our natural gas power plants can, at best, reduce carbon emissions by about 10%. Even if we maximise all available space in Singapore for solar deployment, and account for efficiency improvements, we would still be unable to generate enough power to keep the lights on with solar energy alone. Meaningful abatement can only be achieved through tapping on renewable energy beyond our shores, and by developing the use of other low-carbon alternatives in the longer term.

12. In October last year, I announced that MTI and EMA plan to import up to 4GW of electricity by 2035. This will constitute about 30%, or one-third of Singapore’s electricity supply by then. In the interim, we will conduct small-scale 100MW trials which will help us learn, build confidence, and pave the way for our larger-scale sustainable electricity import projects.

13. The energy transition will require trade-offs, and we will need to accept changes to the way we live and work. In particular, the transition to more carbon-efficient generation and low-carbon technologies, accelerating the deployment of renewable energy, and importing electricity, may not mean cheaper electricity, as Mr Shawn Huang pointed out. We will need to invest in infrastructure and technology, which are costly and likely to lead to higher electricity costs. This is an inevitable but necessary trade-off to build a better and greener world. The Government is pacing and managing the transition to ensure that electricity remains affordable and provide assistance to vulnerable groups when necessary.

14. We will continue to work closely with our industry partners and stakeholders to innovate and explore new solutions.

Drive new areas of growth in the green economy

15. Even as we push on with decarbonisation, there are exciting new economic opportunities too. They are different sides of the same coin on sustainability.

16. Green financing for example, will grow as companies look to financing instruments to support their sustainability investments. Another opportunity is in the carbon services and carbon credits market. Firms and even countries will want to trade in carbon credits to offset their emissions and meet their climate goals. Mr Leon Perera suggested that we need to scrutinise and properly account for the carbon credits, and indeed so. This means that we  will need monitoring, reporting and verification (MRV) services. These growth areas will lead to good jobs in the professional services.

17. Mr Saktiandi Supaat asked how the Government will enable the development of Singapore's carbon markets. Today, there are more than 70 organisations in Singapore providing carbon services, which is the highest concentration of service providers in South East Asia. We will continue to work with the private sector as well as with other countries to develop carbon credit projects which have high environmental integrity and quality, as Mr Perera talked about. These credits can be traded via trusted platforms in Singapore, or can be used by corporates or the government to meet climate targets.

a. For example, we have partnered local ecosystem players such as Climate Impact X (CIX) and AirCarbon Exchange (ACX) to establish marketplaces for companies to access high-quality carbon credits. This entire value-chain and ecosystem will require new skills. The Ministry of Manpower (MOM), Ministry of Education (MOE), Workforce Singapore (WSG), and SkillsFuture Singapore (SSG) are working together to equip our workers with these new skills and for these new job opportunities.   

18. Another area that presents opportunities for Singapore is sustainable tourism.

  a. Eventually, global tourism will recover and become vibrant again as we emerge from the COVID-19 pandemic. Tourists are increasingly demanding sustainable travel options, such as eco-friendly hotels and attractions. This is why we have been taking steps to work with the tourism industry to move towards more sustainable operations, create sustainable products and experiences for visitors, to establish Singapore as a sustainable urban destination. This includes initiatives such as the launch of the hotel sustainability roadmap later this month, a key milestone that will spur hotels to adopt sustainable operations.

  b. Last year, Sentosa received the Top 100 Destination Sustainability Stories Award. The Sentosa Development Corporation (SDC) also launched the Sentosa Carbon Neutral Network, Singapore’s first business alliance committed to carbon neutrality by 2030. The Network aims to help businesses develop sustainability solutions through the sharing of resources and expertise, while also leveraging economies of scale and providing a common network to introduce larger-scale, precinct level solutions.

19. I agree with Ms Jessica Tan, Ms Mariam Jaafar, and Ms Foo Mee Har that businesses which start early on the sustainability journey can gain a competitive edge over those who are slow to do so.

a. This is why last year, the Government launched the Enterprise Sustainability Programme (ESP) to enable local enterprises to uplift their capabilities and capture opportunities in sustainability.

b. The ESP provides support at three levels: first, to develop sustainability capabilities in enterprises through training and access to relevant tools and resources; second, to strengthen sector-specific initiatives through partnerships with Trade Association & Chambers (TACs) and corporates; and third, to foster a vibrant and conducive sustainability ecosystem by working with service providers and enablers in training, certification and provision of green financing.

c. ESG has announced the roll out of the first series of ESP-Sustainability Courses for businesses, which were developed in partnership with Global Compact Network Singapore (GCNS), PwC Singapore, and Singapore Environment Council (SEC).

d. Businesses are also making good use of the Enterprise Financing Scheme (EFS) – Green, which provides enterprises better access to green financing. For example, Durapower Group was extended a green trade loan of $6 million by HSBC Singapore. The loan will enable the Singapore tech company to accelerate the development and distribution of its high-tech energy storage solutions using lithium-ion batteries for the Tuas Port’s automated guided vehicle fleet. I encourage more companies to tap on the ESP and EFS-Green.

Develop new low-carbon solutions

20. Mr Chairman, as Ms Foo Mee Har and Ms Jessica Tan pointed out, innovation and the development of low-carbon solutions are key to sharpening Singapore’s competitive advantage in the green economy and facilitating the green transition.

21. Some of these solutions, such as low-carbon hydrogen and carbon capture, utilisation and storage, or CCUS, have the potential to be a game-changer, especially for the hard-to-abate sectors such as Energy & Chemicals. However, the technology will take time to mature and become more commercially viable. The Government is studying how we can catalyse its development.

22. Let me elaborate on hydrogen, which has in recent years emerged as a promising energy carrier in the global search for low-carbon fuels.

a. Many of the technologies required to enable the production, transportation, storage, and use of hydrogen at scale are still nascent and relatively costly today.

b. Currently, there are also no commercially available utility-scale combined cycle gas turbines (CCGTs) that can use 100% hydrogen. Without significant retrofitting, only small amounts of hydrogen – up to 5% by volume, can be deployed.

c. Another challenge is in transporting hydrogen in large volumes, over long distances, as the technology to transport liquified hydrogen is not yet available at scale. Alternative carrier forms of hydrogen, such as ammonia and liquid organic hydride carriers, are more easily transported, but come with their own challenges, such as the need to extract hydrogen from the carriers at the destination.

d. We expect the costs of low-carbon hydrogen technologies to fall over time with technological advancements and greater economies of scale. Low-carbon hydrogen will also become increasingly more accessible with the development of global supply chains, and as technological developments make its transportation and use easier.

e. The Government is therefore investing resources to understand and monitor the potential for hydrogen deployment in Singapore, and exploring potential solutions.

f. Last year, we awarded $55m for R&D projects under the Low-Carbon Energy Research Funding Initiative to pursue R&D in low-carbon technologies such as hydrogen. One of the projects supported involves NTU working with a consortium of companies, comprising local enterprises such as PSA and Sembcorp Industries, and international partners like Chiyoda Corporation and Mitsubishi Corporation. The consortium will seek to develop new technologies for the extraction of hydrogen from liquid organic hydrogen carriers.

g. Another project involves NUS and NTU researchers collaborating with industry to develop new catalysts to liberate hydrogen from ammonia in a more energy-efficient way. These have the potential to allow for more efficient and economical transport of hydrogen, which can in turn contribute to the expansion of global hydrogen supply chains and improve the viability of hydrogen as an alternative fuel.

23. Another promising low-carbon technology is CCUS, which could be deployed to capture greenhouse gas emissions and keep them out of the atmosphere. Efforts are underway to make CCUS pathways a reality, and we will put in place a robust verification system to ensure proper accounting of the carbon captured, as Mr Leon Perera mentioned.

a. In November last year, A*STAR’s Institute of Chemical Engineering and Sciences (ICES) worked with EDB and JTC to partner 13 E&C stakeholders to study the development of a Carbon Capture and Utilisation Translational Testbed (CCUTT) to be housed on Jurong Island. CCUTT will facilitate the rapid evaluation and test-bedding of emerging carbon capture and utilisation technologies to accelerate industry adoption. This will complement our efforts to develop Jurong Island into a sustainable E&C park.

24. To enhance the synergy of our R&D efforts in low-carbon technologies and solutions, A*STAR will reorganise key R&D capabilities across its institutes into a new Institute of Sustainability for Chemicals, Energy and Environment, (ISCE²). ISCE² will advance research areas such as carbon capture and utilisation, low-carbon hydrogen, carbon life-cycle accounting, and synthetic biology to pave the way for alternative green materials, products and processes, to support Singapore’s sustainability agenda. ISCE² will continue to partner academia, public agencies, and industry to contribute to Singapore’s climate change goals.

25. We look forward to reaping the fruits of these industry and international partnerships in time to come.

Deepen our workforce capabilities

26. Sir, as we transform our industries, we must also equip our people to seize upcoming opportunities in the transition to a green economy and low-carbon power sector, as Ms Mariam Jaafar and Prof Koh Lian Pin have highlighted.

27. I shared about the reskilling and upskilling programmes offered by agencies in January. These include the Career Conversion Programme (CCP) for Clean and Renewable Energy Professionals by WSG, and MAS’s setting up of centres of excellence for training and research in green financing.

28. I am pleased to hear of employers and workers coming forward to make use of these skills programmes. One such example is Mr Wang Yi Tian, a Design Engineer at SembCorp Marine. Mr Wang and seven of his colleagues enrolled in the CCP for Clean and Renewable Energy Professionals to undergo training in new offshore wind technologies. They will be future-skilled to take on job roles such as supporting the construction and commissioning of overseas windfarms and windfarm substations. With these new skills, Mr Wang and his colleagues will be part of the team to expand SembCorp Marine’s capabilities in renewable energy beyond our shores.

29. We will continue to roll out new programmes to keep pace with the evolving needs of the transition to a green economy. This will enable our workers to benefit from the emerging green economy and low-carbon power sector.

Conclusion

30. Mr Chairman, over the past five decades, Singapore’s economy has built up significant strengths and competitive advantages. We have adapted to various challenges, and constantly reinvented ourselves to stay relevant in the regional and global economy. Our transformation to a low-carbon economy is yet another chapter in the Singapore story. It will be a challenging journey, but an exciting one. The Government will partner our industries, businesses, and workers, as we undertake this journey.

31. Together, we can navigate the transition, explore new ideas, and forge new frontiers as we create a greener future for Singapore and for the world. Thank you.