Ecosperity Week 2024 - Ms Grace Fu

Speech by Ms Grace Fu, Minister for Sustainability and the Environment, at Ecosperity Week 2024 on 15 April 2024

Distinguished guests,

Ladies and gentlemen,

1 Good morning.

2 "Renewing our Vibrant Spring", the theme for Ecosperity, heralds in a season of renewal and revitalisation, mirroring the transformation needed in our collective journey towards global net zero.

3 The inaugural Global Stocktake at COP28 marked an inflection point in our global net zero transition. Beyond pronouncements, it emphasised the need for urgent and decisive climate action within this critical decade, to keep our 1.5°C goal within reach.

4 The Global Stocktake set out clear recommendations and pathways that the world needs to take to limit global warming to 1.5°C. It called on all countries to transition away from fossil fuels in our energy systems, and to triple the world's renewable energy generation capacity and double energy efficiency by 2030. It called for the reduction of emissions from road transport on a range of pathways, including through the development of infrastructure and rapid deployment of zero- and low- emissions vehicles. It emphasised the need to accelerate zero- and low-emission technologies, including renewables, nuclear, carbon capture, utilisation and storage, as well as low-carbon hydrogen production.

5 This shift in focus, from setting broad-based net zero targets to the concrete implementation of transition pathways and climate mitigation strategies, marks a critical step in global climate negotiation.

6 As a member of the global community, Singapore will do our part. Singapore has been advancing our transition efforts through the Singapore Green Plan, and the updates to our Green Plan initiatives announced at COP28 and Budget 2024.

7 First, in our low-carbon transition.

8 Singapore has set for ourselves the ambition to reach net zero emissions by 2050, even when we are alternative-energy disadvantaged.

9 We raised the carbon tax from $5 per tonne to $25 this year. We will raise it further to $45 in 2026, and eventually to between $50 and $80 by 2030. The carbon tax attaches a tangible cost to the negative externalities of carbon, spurring emitters to take concrete steps to reduce their emissions.

10 The carbon tax revenue is then channelled back into supporting our businesses and households in the transition towards a lower-carbon economy. This includes the Resource Efficiency Grant for Emissions, which was recently enhanced to allow more businesses to tap on it for their energy efficiency and emissions reductions projects. We also enhanced the Climate-Friendly Households Programme to help more households offset the higher cost of energy- and water-efficient appliances through the provision of Climate Vouchers. As of today, all 1.1 million HDB households in Singapore are eligible to receive $300 worth of Climate Vouchers.

11 While domestic decarbonisation efforts are crucial, achieving the global transition hinges on international collaboration.

12 As a finance hub, Singapore is well-positioned to help accelerate Asia's transition to a low-carbon future. We recently launched the Financing Asia's Transition Partnerships (FAST-P) blended finance initiative, which will mobilise up to 5 billion US dollars from public and private sector partners to de-risk and finance marginally bankable green and transition projects in Asia. In September last year, the Monetary Authority of Singapore (MAS) and McKinsey published a working paper on "transition credits", which are carbon credits generated from the early retirement of coal plants and replacing them with cleaner energy sources. MAS subsequently launched the Transition Credits Coalition (TRACTION) at COP28, with a membership of close to 30 reputable ecosystem players, which will help identify barriers and potential solutions to develop transition credits as viable market solutions.

13 Second, the energy transition.

14 As COP28 outcomes have shown, there is growing global recognition that the future of energy lies in clean energy sources, representing a strategic shift towards a more secure, resilient, and low-emission energy landscape.

15 15.While it is uncertain what our energy mix will be in the future, it is clear that significant effort and resources will be needed to transition from Singapore's current energy system, which is powered almost entirely by natural gas, towards cleaner energy.

16 16.The Government will need to provide some catalytic funding to support the shift towards low-carbon energy sources. This is why we announced the establishment of the Future Energy Fund at Budget 2024, with an initial injection of $5 billion, to support the large amounts of upfront infrastructure investment required to secure low-carbon energy.

17 One promising source of low-carbon energy is hydrogen, which we believe has the potential to be a needle-mover in the global energy transition. In 2022, Singapore launched our National Hydrogen Strategy, setting out the steps we are taking to prepare Singapore for a hydrogen future. To facilitate the adoption of hydrogen as an energy source, we announced new emissions standards for power generation units last year, which will require all new generation units to be at least 30% hydrogen-ready by volume, with the ability to be retrofitted to become 100% hydrogen-ready in the future.

18 To further expand our options for clean energy, we are studying the potential for geothermal power generation in Singapore, and building capabilities to better understand advanced nuclear energy technologies and their potential to play a role in Singapore's long-term energy mix in a safe manner.

19 Another area with promising potential in the energy transition is sustainable aviation fuel (SAF), a cleaner alternative to traditional jet fuel used in airplanes. Blended with conventional jet fuel, SAF is expected to contribute around two-thirds of the carbon emissions reductions needed for the aviation sector to achieve net zero by 2050. However, the cost of SAF remains too high for widespread adoption.

20 As an aviation hub, Singapore is playing our role in scaling up SAF. From 2026 onwards, all flights departing from Singapore will be required to use at least 1% of SAF, with the aim of increasing it to 3 to 5% by 2030, subject to global developments and the wider availability and adoption of SAF. This will provide an important demand signal to fuel producers and give them the incentive to invest in new SAF production facilities. An SAF levy will also be introduced from 2026 onwards to support the purchase of SAF. The levy will be set at a fixed quantum, to provide airlines and travellers with cost certainty. The amount collected through the levy will go towards the bulk purchase of SAF that airlines will need to use.

21 Finally, the transition of the economy.

22 As we progress towards our net zero goal, not only must we ensure economic competitiveness and resource resilience, we must also leverage on new growth opportunities for our long-term success.

23 It is important to help our businesses to understand and measure their carbon footprint, and integrate sustainability into their management frameworks systematically.

24 One way to do so is through climate reporting. By requiring companies to disclose climate-related data such as carbon emissions, we can increase market transparency and empower businesses to take greater ownership of their sustainability performances. This data also allows consumers, investors and financiers to make more informed choices in their purchases and investments, directing finance to businesses with strong sustainability practices.

25 Singapore will require all listed issuers to make climate-related disclosures from FY2025, followed by large non-listed companies from FY2027. These disclosures will need to be aligned with the standards set out by the International Sustainability Standards Board.

26 To help our businesses meet their climate reporting needs, I am pleased to announce the launch of the Emission Factors Registry by the Singapore Business Federation, with support from corporates like Singtel, PwC and the Government. The idea of the Registry emerged from a Forward SG conversation in 2022, where companies highlighted the difficulties presented in reporting Scope 3 emissions. To address this, PwC and Singtel stepped forth to kickstart the project with the support of the Government. The Registry will capture a database of emissions factors developed based on Singapore's context. These emissions factors essentially act as conversion rates, converting operational data from activities into their corresponding greenhouse gas emissions. This will help our businesses track and report their emissions more easily and accurately, saving time and effort. In turn, it will empower them to make informed sustainability decisions based on their environmental impact.

27 Next, on upskilling our workforce. We need to empower our workers with the skillsets and capabilities to support climate action. We convened the Green Skills Committee last year, to bring together industry players, training providers and other partners from various backgrounds to ensure that our workforce develops the relevant green skills to keep pace with industry demand. The Committee is currently focusing on areas requiring green skills which are and will be in high demand in the immediate and near term - namely, clean energy and sustainability reporting and assurance. We have witnessed initiatives by private companies, trade associations and institutes of higher learning, who have rolled out several programmes and courses in collaboration with Government agencies. For example, the Energy Market Authority has been working with training providers to launch training programmes to address clean energy skills gaps identified by the industry, such as the safe handling of energy storage systems. Schneider Electric, in partnership with Enterprise Singapore, launched the SME Kickstarter Decarbonisation Programme in 2022, which equips participating SMEs with the necessary knowledge and guidance needed throughout their sustainability journeys, with a focus on decarbonisation.

28 Ladies and gentlemen, tackling climate change requires a global collective effort.

29 While government policies and incentives are crucial catalysts for decarbonisation, they are not sufficient. We need a vibrant marketplace of ideas, where cutting-edge technologies are nurtured and groundbreaking solutions are cultivated. We need robust financing mechanisms, where public and private sectors work hand-in-hand to unlock the trillions needed for a just and inclusive global net zero transition. We need strong international partnerships that transcend geopolitical boundaries, fostering effective collaboration and knowledge sharing on a global scale. And finally, we need everyone - governments, businesses, and civil society alike - to embrace a culture of sustainability, hold each other accountable

30 I hope that Ecosperity Week 2024 will inspire innovative, collaborative, and transformative efforts that resonate across borders, industries, and communities.

31 I wish you fruitful discussions ahead. Thank you.

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