Excerpt of Speech by Minister for the Environment and Water Resources Masagos Zulkifli at Committee of Supply Debate

Climate change

While we stand on solid footing, the road ahead is uncertain. A major concern for us is climate change, a far-reaching threat we can already see and feel today. Our Met Service recorded 2016 as the hottest year since 1929, when we started keeping temperature records. In recent years, our water managers, too, have had a foretaste of the looming challenge of coping with extended dry spells on the one hand and higher intensity rainfall on the other. Singapore has to plan ahead to deal with climate change impacts. We will not only need to protect our buildings, coasts, and infrastructure, but also foster greater awareness, so that we are a resilient people.

As a responsible member of the international community, Singapore is committed to fulfilling our pledges under the Paris Agreement to reduce our greenhouse gas emissions. Both households and industry play a role in this, as Mr Gan Thiam Poh has noted. Industry, however, contributes the lion’s share – 60 per cent – of Singapore’s greenhouse gas emissions. We therefore need to focus our efforts there. The upcoming carbon tax to be imposed on large emitters, as announced by the Finance Minister, will help send the right price signal to industries to reduce their emissions when and where it makes the most business sense.

The carbon tax, however, is not a panacea for achieving our 2030 emissions pledge. We will need other measures to complement the tax. That is why we introduced the Energy Conservation Act (ECA) in 2013, to put in place measures such as mandatory energy management and encourage companies to enhance their energy efficiency. I am pleased to report that we have made progress on this front since then.

Let me give an example. Murata Electronics Singapore, which manufactures electronic components, is becoming an early adopter of efficient motors. Murata is replacing 50 motors with higher efficiency ones. This will save Murata some 160 MWh of electricity each year. These annual savings of $21,000 in energy costs will last throughout the 15-year lifespan of the motors. Murata is a good example of how industrial energy efficiency measures can benefit the environment as well as the company’s bottom line, but for the industry sector as a whole – there is clearly more to be done.

Data collected shows that our companies achieved an annual energy efficiency improvement rate of 0.6 per cent in 2015, a slight improvement over 0.4 per cent in 2014. This is still low. To meet our 2030 pledge, we need to work towards the 1 to 2 per cent improvement rates achieved by leading countries such as Belgium and the Netherlands.

On a positive note, companies that I spoke to at a recent consultation session recognised the importance of improving their energy efficiency. They, however, mentioned that they faced operational and capability constraints. Some also asked for best practices and useful data to be shared with them.

We are studying their feedback and for a start, we will amend the Energy Conservation Act to introduce a new set of initiatives to help companies improve their energy efficiency. First, all ECA-registered companies will now be required to implement structured energy management systems and conduct regular energy efficiency opportunity assessments. Second, companies expanding their facilities will need to factor energy efficiency into their designs upfront, as well as measure and report energy usage for key energy-consuming systems. Third, NEA’s data shows that a substantial proportion of common industrial equipment is inefficient. Hence, Minimum Energy Performance Standards will be introduced, first for motors, and then other systems and equipment progressively. These practices are in line with that of leading jurisdictions and will help companies to adopt more efficient equipment, conserve energy and enjoy life cycle cost savings.

To pave the way for a robust carbon tax regime, we need to have a sound measurement, reporting and verification (MRV) system in place. The ECA will thus be amended to require larger industrial emitters to improve the quality of measurement and reporting processes for their greenhouse gas emissions. This will help companies to better understand and manage their emissions. My Ministry will continue to work closely with the NCCS and MTI to consult the affected companies on how to best achieve this.

We have also received feedback on the need to improve the current incentive schemes. NEA will be consolidating their existing energy efficiency incentive schemes into a single fund called the Energy Efficiency Fund (E2F). NEA will redesign the E2F to better support companies to identify and undertake energy efficiency retrofits. We will especially help our SMEs by co-funding up to 30 per cent of their investments in energy efficient technologies. Further details will be released by NEA.

We need a sustainable way to grow our economy. This is even more important as the world becomes increasingly carbon-constrained.

Source: Ministry of the Environment and Water Resources