Speech by Senior Minister Teo Chee Hean at the Committee of Supply Debate 2024

Speech by Senior Minister and Coordinating Minister for National Security Teo Chee Hean, Committee of Supply Debate 2024

Progress Towards a Greener and More Sustainable Future

Thank you, Mr Chairman.

Ms Poh Li San and other members have raised important issues which I will address from a whole-of-government perspective. Some of the details will be dealt with by the individual ministries during their Committee of Supply debates.

I speak as Chairman of the Inter-Ministerial Committee on Climate Change (IMCCC).

The Imperative for Climate Action

Amid heightened geopolitical and economic turbulence, the world is currently on a pathway to 2.1 - 2.8°C of global warming by 2100.

The Ministry of Sustainability and the Environment (MSE) has been working to improve our understanding of the consequences of such a pathway. Today, we have a clearer projection. But it is a projection, because we are talking about what is going to happen for the rest of the century.

The Third National Climate Change Study, released last month, forecasts the extreme climate conditions that we could experience – higher temperatures, heavier spells of rainfall, longer and more frequent dry spells.

In the worst-case scenario where global emissions continue to rise rapidly, Singapore could face daily maximum temperatures exceeding 35°C almost year-round. This would be a marked increase from the historical average of 21 such days each year.

Ms Poh Li San asked how we are responding to these latest projections. We take a long-term and proactive approach, and we are developing our adaptation plans. These are regularly refreshed to keep up with the latest science, to help us be ready for the climate risks we will face – whether they are physical risks, such as flooding, or health risks.

The physical effects of climate change also have wider implications for our economy, as Mr Dennis Tan has pointed out about the Northern Sea Route. The rising temperatures in the Arctic make this shortcut passable year-round, it could alter the flow of shipping between Asia and Europe. Our port will therefore have to be more efficient and better connected to compete. This is why Singapore has been closely monitoring developments in the Arctic. Although Singapore is on the equator, we have been an Arctic Council Observer State since 2013 – for the last 11 years – and we contribute and participate actively in its discussions. Currently, the commercial viability of the Arctic routes remains low. It is a very difficult and treacherous route. In 2022, only 43 transit voyages were made through the Northern Sea Route, fewer than the 85 transit voyages in 2021.

Still, we cannot ignore how profoundly climate change can disrupt our lives and livelihoods. For Singapore, this means not just acting now to achieve our own climate goals, but also catalysing regional and global action, so that other countries do the same – only then can we collectively achieve our global climate action goals. As Ms Poh Li San has pointed out, we emit about 0.1% of global carbon dioxide emissions each year but we are affected by the other 99.9%.

Translating Domestic Ambition into Action

Domestically, we have set ambitious targets. In 2022 we announced our enhanced climate targets, committing to reduce emissions by 2030 to 60 million tonnes of carbon dioxide equivalent, after peaking emissions earlier; and to achieve net zero emissions by 2050. We have essentially decided to target for the future, look at what the future will bring for us, to shape our economy and society, and plan on that basis rather than doing incremental changes as we go along.

Mr Liang Eng Hwa asked how we are turning our ambitions into action. Our carbon tax, which was raised to $25 per tonne this year, is a key enabler. It shapes behaviour across our economy, and we continue to use the revenues to help businesses and households become greener. I am truly heartened that both sides of this house have expressed support for a broad-based carbon tax. Some have advocated, for example from the Workers’ Party, much higher tax rates and sooner than what the government is actually intending to implement up to 2030. What we are intending to implement is carefully calibrated to take into account the adjustments as needed by households and businesses, and also the maturing of technologies that will make it more efficient for us to decarbonise.

We are also transforming our energy mix to run on greener power. We have doubled our solar power deployment since 2021 to over 1,000 Megawatt-peak, despite our limited land area. We aim to reach 2,000 Megawatt-peak by 2030. As a comparison, our power consumption right now is about 8 Gigawatt (GW). Of course, 2 GW-peak is not the same, you cannot put them side by side. We are importing low-carbon electricity, allowing us to tap renewable energy beyond our shores.

Dr Lim Wee Kiak asked how Singapore can capitalise on emerging technologies to support our energy transition. This year, the government will set up the Future Energy Fund (FEF) with an initial injection of $5 billion. The FEF will allow us to plan ahead to catalyse the infrastructure investments we need to deploy low-carbon technologies, when they are viable. There is a range of things it could be. It could be hydrogen, it could be ammonia, it could be a number of things; and we need to start doing that within the next few years.

We are also looking at new solutions beyond the power sector. We have been monitoring Carbon Capture and Storage (CCS).

The technologies underpinning CCS are not new and there is growing recognition from countries and organisations such as the International Energy Agency (IEA) that CCS can play an important role in achieving significant reductions of industrial emissions.

Countries in the region, such as Australia, Brunei, Indonesia and Malaysia, have strong geological potential for carbon dioxide storage, and some of our regional partners have announced plans to develop as regional CCS hubs.

We are ready to work with like-minded partners on pathfinder projects to catalyse the development of such regional hubs.

The Ministry of Trade and Industry will provide more details on this.

Support for Our Whole-of-Nation Effort

Mr Chairman, the climate transition will take a whole-of-nation effort. Ms Poh Li San asked how the government is supporting businesses and households in this transition.

Our SMEs are benefiting from schemes that help them decarbonise and seize green economy prospects. One example is bbp – an energy efficiency solutions provider. Leveraging Enterprise Singapore’s Enterprise Development Grant and other scale-up programmes, bbp has helped businesses achieve more than $90 million of energy savings and avoid 240,000 tonnes of carbon dioxide emissions, across 9 Asian markets. Of course, developing a nice business for themselves.

We will continue to enhance our schemes to encourage energy efficiency among businesses and households. These include expanding the Energy Efficiency Grant to more sectors, and enhancing the climate-friendly households programme that offsets the upfront costs of switching to more energy- and water-efficient appliances. The Ministry of Trade and Industry and Ministry of Sustainability and the Environment will update this House on their efforts in these areas in greater detail.

Mr Louis Ng asked about support for our research community. The Government’s Research, Innovation and Enterprise (RIE) 2025 Plan (“RIE2025”) allocates significant funding to R&D across every pillar of the Singapore Green Plan. This ranges from low-carbon energy research, all the way to research in coastal protection and flood management, and covers a wide range of things. We recently enhanced funding for the RIE2025 Plan. This will facilitate the research community’s contribution to climate action.

Catalysing Regional and Global Climate Action

Ms Poh Li San asked how Singapore can play an active role in fostering international collaboration and catalysing global climate action. Mr Chairman, domestic action alone is necessary but not sufficient for us to succeed in global climate action. All countries and regions must do their part. And this is why, under the Sustainability Action Package, Singapore supports capacity building for developing countries and brings together a diverse range of public and private sector partners to share best practices on sustainability and climate issues.

Let me share a few examples of the efforts we contributed to at COP28 in Dubai:

Minister Grace Fu helped broker a landmark consensus among the Parties to transition our energy systems away from fossil fuels. This is a strong signal of global resolve to pursue a net-zero future.

Beyond the negotiating rooms, the Singapore Pavilion at COP28 was a hive of activity. It brought key organisations and persons from the private and people sectors together to forge new partnerships. For example, Singaporean ocean carrier Pacific International Lines and Dubai-based port and terminal operator DP World signed an MOU to jointly develop green solutions to decarbonise global supply chains.

Our Pavilion was also home to Singapore’s inaugural youth delegation to COP28. Our young people deserve our support to apply their energy and ideas to the challenge of climate change and make a real difference. The Ministry of Sustainability and the Environment will share more about how the Government is enabling youth action.

The world needs to continue the momentum from COP28 to accelerate climate action. Dr Lim Wee Kiak asked how Singapore can leverage our strengths as a hub to do that. Let me highlight three ways:

Green and Transition Finance

First, green and transition finance.

Asia will require an estimated US$1.7 trillion dollars in climate and infrastructure investment annually through to 2030. This substantial amount will need to be met by a combination of concessional and commercial capital.

As a financial hub, Singapore is well-placed to catalyse green and transition finance for the region.

As an example, at COP28, I announced the launch of a new blended finance initiative – the Financing Asia’s Transition Partnerships, or FAST-P, that will mobilise up to US$5 billion dollars from public and private sector partners to de-risk and finance transition and marginally bankable green projects in Asia.

Singapore is also helping to build high-integrity carbon markets and pursuing collaboration on carbon credits under Article 6 of the Paris Agreement with various countries. At COP28, we signed our first Implementation Agreement, with Papua New Guinea. The Ministry of Trade and Industry will share more about our efforts on carbon markets.

Southeast Asia’s Energy Transition

The second area is energy. Singapore is helping to accelerate Southeast Asia’s energy transition by promoting partnerships that benefit our nation and the region.

To support regional energy transition, we will establish in Singapore the first-ever International Energy Agency (IEA) Regional Cooperation Centre outside of its Paris headquarters. The Centre gives Southeast Asia greater access to the IEA’s expertise and facilitates capacity building.

Transport

The third area is transport. As an aviation and maritime hub, Singapore can play a major role in developing the infrastructure and standards for green aviation and shipping.

The Civil Aviation Authority of Singapore (CAAS) recently launched the Singapore Sustainable Air Hub Blueprint, which takes a balanced approach on the need for sustainability and competitiveness for our aviation sector. This will help catalyse the development of sustainable aviation globally and facilitate the industry’s progress towards decarbonisation.

We are also making progress on green shipping. In December 2023, we signed a memorandum of cooperation with Japan to establish the Singapore-Japan Green and Digital Shipping corridor. This complements similar partnerships with ports in the Netherlands, China, and the US, allowing us to support the decarbonisation, digitalisation, and growth of the maritime industry.

Conclusion

Mr Chairman, I have explained why it is in Singapore's interest to commit to climate action, outlined concrete steps we are taking as a nation to meet our ambitious climate targets, and highlighted how Singapore is stepping up to encourage regional and global action.

We must stay the course in our green transition because we want to leave behind a liveable, resilient, and thriving country and world for future generations of Singaporeans.

Thank you, Mr Chairman.