Speech by MOS Alvin Tan In response To Adjournment Motion On “The Road To Decarbonising Our Corporations”

1. Sir, I thank the Member for his adjournment motion and Members for staying up until almost 10.30pm.

2. Sir, the Government recognises the importance of encouraging all companies to decarbonise while also maintaining our economic competitiveness. And this balance is key in every single decision we make to move Singapore towards a low-carbon future.

3. Amidst international efforts to address climate change, Singapore must and in fact we will do our part. We have set a clear direction to reach net zero by 2050. And to meet our commitment, we must take as what the member said, bold steps. But we must also pace ourselves carefully, consider global and technological developments, and of course the impact to our companies, and our people as well.

4. We have indeed made decisive moves at the national level, and please allow me touch on some of these moves.

5. First, the carbon tax which the Member raised. The carbon tax is a primary lever in our decarbonisation toolkit. It sends an economy-wide signal to our companies to decarbonise. And I thank the Member and the Workers Party for supporting our carbon tax and note that he had reemphasised that the carbon tax that we have set is not quite high enough and still below the preferred rate for the Workers Party. That said we must be mindful and careful about the carbon tax rate. In fact, we were the first in our region to implement such a carbon price.

a. Today, the tax targets large direct emitters responsible for about 80 per cent of our total carbon emissions. This coverage is one of the most comprehensive already in the world, and it rises to 90 per cent if you account for excise duties on transport fuels.

i. We are also striking a delicate balance between covering this final 10 per cent of emissions, and the added administrative burden, including of reporting and verification. We need to balance between that as well as the burden to our companies as well as our people.

b. The carbon price is scheduled to reach $50 to 80 per tonne of CO2-equivalent by 2030. Which is in line and aligned with our international climate commitment, and again sets a clear direction in our decarbonisation journey.

6. Member also talked a bit about our energy mix, and besides setting this price on carbon, we are indeed also intensifying our efforts to decarbonise our power grid which will help all companies address their scope 2 emissions.

a. First, we are maximising our use of solar energy, which is the most viable source of renewable energy available to us.

b. Second as the Member knows, we have raised our ambition to import up to 6GW of low-carbon electricity by 2035, up from the previous 4GW.

c. Third, we are exploring nascent low-carbon alternatives, such as hydrogen, geothermal energy and newer nuclear energies, and assessing how they can be applied to Singapore. Minister Tan See Leng talked about that earlier this morning.

d. Fourth, we are of course also engaging industry players to address demand.

7. Sir, these moves are important in our green transition, and we recognise that companies face both opportunities as well as challenges as we make this transition to net zero together.

8. First, the opportunities.

a. More large corporates are setting science-based climate targets, including here in Asia. And what does that do?

i. Well, it in fact generates higher demand for clean energy, sustainability solutions, and carbon credits for those hard-to-abate emissions.

ii. It also generates new green growth opportunities in areas such as offshore wind, and carbon services and trading.

b. At the same time, we also acknowledge that companies face challenges to adopt these low-carbon alternatives and operations.

i. For example, they may need to deploy new technology that is probably more expensive and less proven, and also make adjustments to their processes and face possible downtime in their production.

ii. Capital providers and clients are also increasingly demanding that companies report and reduce their emissions.

iii. Workers as the members mentioned, may also need different skills to take on new or transformed roles.

iv. All of these transitions take time.

9. Therefore, we are supporting our companies at different stages of their sustainability journey, to build capabilities, develop their decarbonisation plans, access financing, and also to train, upskill and reskill our workers. And we are working with our Trade Associations and Chambers (TACs) and financial institutions in this endeavour.

10. Member talked about measurement and reporting. This is an important first step indeed for a company to understand its baseline emissions, and for them to develop a decarbonisation strategy. Here are some ways we are helping, the Member enumerated some ways too.

a. Companies under Singapore’s phased climate reporting requirements get started early on their International Sustainability Standards Board (ISSB) aligned reports by using the Sustainability Reporting Grant introduced by EDB and EnterpriseSG, a point made by the Member.

b. SMEs can also use our SME Sustainability Reporting Programme to prepare their first sustainability report, much more affordably, and also with the help of appointed service providers.

c. SMEs can also tap into the Singapore Business Federation’s Emission Factors Registry, and also MAS’ Gprnt to adopt digital solutions to smoothen their carbon accounting and reporting processes.

i. In fact, Gprnt can help an SME automatically translate its day-to-day activities and data from local digital platforms such as Myinfo Business and Corppass, into a basic sustainability report.

ii. And with the company’s consent, Gprnt can directly share this report with financing and supply chain partners, which will help these SMEs cut down their reporting time and also costs.

11. But beyond that, we also helping companies as they chart and implement their decarbonisation strategies, working with industry partners such as the Sustainability Alliance which comprises of 18 TACs.

a. TACs such as the Singapore Logistics Association have been working very closely with my colleagues at EnterpriseSG to develop sectoral sustainability playbooks to guide companies on practical, sector-specific steps to the green transition. I launched this playbook with the SLA in February.

b. We also have “Queen Bee” companies, which are important. Companies such as City Developments Limited and SingPost are also helping their suppliers build capabilities in emissions measurement as well as decarbonisation, to better meet their sustainable procurement criteria.

12. Member also talked about financing, let me touch on funding and financing. Government provides funding to help companies implement green initiatives, with higher support levels for SMEs.

a. SMEs can use the Energy Efficiency Grant, and for larger companies, the Resource Efficiency Grant for Emissions, to implement energy efficiency projects and enjoy longer-term energy efficiency gains.

b. They can also use the Enterprise Development Grant – Sustainability. This is a scheme which provides up to 70% support for sustainability projects, which is higher than for other project categories. Let me give you an example.

i. This particular grant helped a local company called Mlion Corporation to build an innovative B2B steel marketplace for pre-owned construction steel materials. Beyond opening up a new revenue stream, the platform has facilitated the use of pre-owned steel instead of new steel and helping this company, whom I’ve met before, save 25,000 tonnes of carbon emissions in its first year. So by using that, you are already seeing some savings.

13. But beyond this funding, financing is important. The Member’s point about green finance is key. That is why we are catalysing private green capital to support companies in their transition, leveraging Singapore’s status as a sustainable finance hub.

a. In fact, as the Member observed, Singapore is ASEAN’s largest market for green, social, sustainability, and also sustainability-linked bonds and loans, accounting for over half of the ASEAN market.

b. And local companies can use MAS’ Sustainable Loan Grant and Bond Grant Schemes to obtain green and transition financing, and to defray the cost of external reviews to validate the sustainability credentials of such loans and bonds.

c. We have also recently expanded our Enterprise Financing Scheme – Green which provides enhanced risk share to catalyse lending to SMEs, with around $350 million in green loans to date.

d. EnterpriseSG also recently launched programmes with DBS and UOB to offer preferential financing rates for sustainability action, including decarbonisation and green initiatives.

14. Finally, the Member talked about skills. Companies do in fact need talent to drive this low-carbon transition. That is why we are (in fact and indeed) reskilling and upskilling workers to take on these newly created roles.

a. Member mentioned the Green Skills Committee which we launched last year. It is developing skills and training programmes in areas such as sustainability reporting and assurance as well.

b. SkillsFuture Singapore is also working with the Institute of Banking and Finance (IBF) to extend its accredited sustainable finance courses, and this is beyond financial institutions, to build sustainable finance capabilities among real-economy companies, particularly our SMEs.

c. EnterpriseSG and EDB has also recently partnered NTU to establish the Carbon Markets Academy of Singapore. This will offer courses to around 300 professionals to take on jobs in the carbon services and trading sector over the next three years so there’s a comprehensive suite of training.

d. These are really examples of how we are preparing our people for this green transition.

15. Mr Speaker Sir, it’s getting late and its really fitting that we close what is likely our last parliamentary sitting of the year on this very important issue. Why? Because it concerns the future of our island nation. Climate change, Mr Speaker is an existential threat to Singapore. As an island, we are vulnerable to rising sea levels. And As a densely populated tropical city, we are vulnerable to severe heat stress.

16. On our part, our Government will continue to set clear direction and also build an enabling environment for the green transition. We chart forward-looking decarbonisation pathways, and partner industry to build green capabilities.

17. But beyond government and businesses, we all too as consumers must play an important role in this green transition. We could choose low or zero-carbon alternatives in our lifestyles for example.

18. Sir, advancing the green transition is not just a good to do, it is a must do if we are to secure the survival of our island nation.

19. Sir, I am proud that this House continues to stand together with our people and our businesses in our important mission to secure a competitive, low-carbon future for Singapore.

20. Thank you Sir.