Decarbonisation: Singapore's Options in Overcoming the Greatest Challenge of the 21st Century

In a recent speech on Singapore’s Long-Term Emissions Development Strategy (LEDS), DPM and Coordinating Minister for National Security, Teo Chee Hean highlighted a bold ambition - to cap carbon emissions at 65 million tonnes by 2030, and halve the emissions by 2050. The ultimate aim is bolder still - Singapore is to achieve net-zero emissions by the second half of the century.[1]

In the same vein, Minister for Trade & Industry Chan Chun Sing spoke about the need to create Singapore’s Energy Story at the Singapore International Energy Week (SIEW) 2019. The Energy Story envisions “4 Switches”: Natural Gas, Solar, Regional Power Grids and Emerging Low-Carbon Alternatives [10]. To further reduce its carbon emissions, Singapore will be tapping on immature low- carbon technologies like carbon capture, utilization and storage (CCUS), and also low- carbon fuels like hydrogen.[2]

The potential of carbon capture, storage and utilisation (CCUS) in reducing carbon dioxide emissions substantially have been emphasised by reports from McKinsey and International Environment Agency (IEA)[4][5]. Intergovernmental Panel on Climate Change has also stated that the world needs carbon capture to achieve the emission target under the Paris Agreement [3]. Currently, there are 43 carbon capture projects worldwide that have successfully stored around 160 million metric tonnes of carbon dioxide, most of which was used in enhanced oil recovery (EOR) [3]. Closer to home, the National Climate Change Secretariat (NCCS) has viewed carbon utilisation (a part of CCUS) to be more applicable in Singapore’s context, due to the country’s limited land, as well as high investment costs for carbon storage spaces. [6]

Aside from technology, government policies, laws and regulations are also integral to involving stakeholders in decarbonisation efforts. Such policies include carbon-pricing initiatives like Emission Trading Systems (ETS) and Carbon Tax. To date, more than 46 national and 38 subnational jurisdictions have implemented such initiatives, accounting for more than $40 billion in carbon pricing revenues [7]. In 2019, Singapore implemented a carbon tax of SGD 5/tCO2e to large carbon emitters from 2019. However, critics viewed Singapore’s carbon tax rate to be relatively low when compared with the global average of USD 21.50, and with that of other countries like France (USD33) and Sweden (USD 126). Hence, there are plans to eventually increase the carbon tax rate to between $10 and $15 per tonne in 2030. [8]

Additionally, there is an increasing focus on green finance like green bonds, green stocks and carbon credits to support green projects. In a bid to boost Singapore as a global green finance hub, the Monetary Authority of Singapore (MAS) has launched a US$2 billion green investments programme (GIP) to promote environmental-friendly projects [9]. Funds will be disbursed to green finance activities like green-focused bonds and green investments.

In summary, decarbonisation options in the form of technologies, policies and regulations are necessary to meet the carbon reduction targets implied by the Paris Agreement.

Contributed by: Chang Chia Chien, Lead (Circular Economy & Carbon Reduction)

Editorial by: Letitia Koh

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