Speech by Singapore's Ambassador for Climate Action at the International Built Environment Week

Singapore’s Triple Transition Towards a Low Carbon Future

Good morning.  I thank the Building and Construction Authority (BCA), RX, sponsors and partners for the opportunity to join you at the International Built Environment Week Conference. 

THRIVING IN A LOW-CARBON, CLIMATE-IMPAIRED WORLD

Let me begin with a quick reflection on the state of the planet. It is not in a good place. Climate change is already happening. We are seeing more extreme storms, floods, wildfires, and heat waves. 2024 could be the world’s hottest year on record. Tropical cyclones are picking up more energy from warmer ocean waters and intensifying more quickly, leading to major floods. Droughts have become persistent across many parts of the world¹.

It will only get worse in the coming decades. To mitigate climate change, we need to limit global warming to 1.5 degrees Celsius above pre-industrial levels. But global temperatures are already 1.1 degrees Celsius higher and are continuing to rise². The main driver of global warming – the emission of greenhouse gases – is also continuing to rise. The climate crisis – and that is exactly what it is – is gathering pace.

To avert climate catastrophe, the world has been stepping up decarbonisation. As of June 2023, 149 countries have committed to achieve net-zero emissions³. In the advanced economies, emissions have fallen to their level of 50 years ago⁴. The share of renewables in global power generation has been growing over the years and surpassed 30% in 2023⁵.  The global demand for each fossil fuel – coal, oil, and natural gas – is expected to peak before 2030⁶. Globally, investment in energy transition technologies has surged from US$240 billion in 2012 to US$1.8 trillion in 2023⁷.

What do these two ongoing trends – climate change and decarbonisation – mean? It is likely that the world will accelerate the current pace of decarbonisation in the face of worsening climate change.  We will not sit still. But it is also likely that decarbonisation will not occur at a fast enough pace to stop climate change.  We will not act decisively.

We are thus looking at two scenarios co-existing: a low-carbon world and a climate-impaired world.  These are the two futures that Singapore needs to prepare for.

Preparing for a low-carbon world is both an international obligation and an economic necessity. Two years ago, Singapore committed to peak emissions before 2030 and achieve net-zero by 2050.  We account for only 0.1% of global emissions but every country must do its part. The transition to a low-carbon world will likely entail the biggest economic transformation since the Industrial Revolution. Those countries, industries, and businesses that successfully transition towards net-zero will thrive in a low-carbon world. Singapore must ensure that it is among these countries.

Preparing for a climate-impaired world is an existential issue for Singapore. We are vulnerable to rising sea levels.  We are low-lying, with 30% of Singapore less than five metres above mean sea levels. We are vulnerable to severe heat stress.  We are a densely populated tropical city subject to urban heat effects and high humidity. We must ensure that we remain a resilient, vibrant and liveable city in a climate-impaired world.

Finally, Singapore can and must play a constructive role in Asia’s transition. Asia accounts for half of global emissions.  To mitigate climate change, Asia needs to decarbonise, and the rest of the world must help it to do so. As an international business, financial, transportation and technological hub, Singapore can play a useful role in partnership with others to facilitate Asia’s transition.

In short, we need to fight on three fronts: drive our own transition to net-zero; strengthen our resilience to climate change; and facilitate Asia’s transition to a low-carbon future.

SINGAPORE'S TRIPLE TRANSITION

Today, I will focus on Singapore’s transition to net-zero.  In fact, our approach comprises three transitions: a carbon transition; an energy transition; and an economic transition.

The triple transition will require us to fundamentally rethink the way we produce and consume.  I will discuss each transition in turn, using the built environment to illustrate.

Carbon Transition 

Let me start with the carbon transition, to reduce primary carbon emissions to net-zero across all sectors. As of 2021, primary emissions, or emissions arising from non-electricity related activities, made up 60% of Singapore’s total emissions. About 73% of these primary emissions come from industrial activity and 23% from transportation. Buildings account for about 1.5%, and households, waste and water, and others account for the rest.

The government has been working with various industries on decarbonisation plans and mitigation packages. For instance, we are piloting the use of carbon capture, storage, and utilisation technologies. We are also exploring the use of low-carbon hydrogen for industrial heating, which is a major source of emissions in the manufacturing sector. These efforts will take time. The technologies are nascent, and the cost implications are not trivial.

The land transportation sector’s strategy for decarbonisation is based on cleaner energy and modal shift. For cleaner energy, we will cease the registration of new diesel cars and taxis from next year, and install 60,000 charging points for electric vehicles by 2030. As for modal shift, the aim is for mass public transport to make up 75% of travel at peak hours by 2030.

For the built environment, the Singapore Green Building Masterplan has set the target to green 80% of our buildings by 2030. To qualify as green, buildings not covered under existing Environmental Sustainability Regulations must be certified under the Green Mark scheme. To obtain Green Mark certification, a building will have to achieve required energy performance standards along with other good sustainability practices such as: one, conducting whole-of-life carbon assessments; two, significantly reducing the embodied carbon in the building’s concrete, glass and steel; and three, publishing a transition plan that delineates the steps to deliver a net zero carbon building from 2030.

I am encouraged that building owners are taking decarbonisation seriously. For example, City Developments Limited has pledged to achieve net zero carbon by 2030 for all its wholly-owned buildings, through onsite or offsite renewable energy sources and carbon offsets. Lendlease, a multinational construction and real estate firm, has set targets to achieve net zero carbon by 2025, and absolute zero carbon – meaning without using offsets – by 2040.

Energy Transition

Next, the energy transition, to achieve a resilient net-zero electricity grid and enhance energy efficiency. Electricity generation accounts for about 40% of Singapore’s total emissions. Of those emissions, the building sector accounts for nearly one-third. Reducing these emissions is a shared responsibility: the government must progressively shift to a cleaner energy mix at the production stage, while the private sector must enhance energy efficiency at the consumption stage.

Singapore faces significant disadvantages in producing clean energy. Our average wind speeds are below what is needed for commercial wind turbines. We have no river system with fast flowing water, limiting our hydroelectric potential. We have no conventional underground geothermal energy sources. Solar energy is the most promising option, but its scale is limited by Singapore’s dense cloud cover and limited land. Even if we reach the full technical potential for solar deployment by 2050, it will barely meet 10% of our projected electricity demand.

But we are doing what we can, pursuing multiple avenues to a cleaner grid, while taking into account energy security and cost competitiveness.

First, we are trying to maximise solar energy through innovative deployment. Singapore is now home to one of the world’s largest inland floating solar PV systems. The Sembcorp Tengeh Floating Solar Farm comprises 122,000 solar panels and spans across an area of about 45 football fields.

Second, we are looking to import low-carbon electricity from our neighbouring countries. The Energy Market Authority has granted conditional licenses to import a total of 2 gigawatts from Indonesia. Conditional approvals have also been granted to projects importing electricity from Cambodia, Indonesia, and  Vietnam. Just yesterday, we announced that we will raise our ambition and seek to import 6 gigawatts of low-carbon electricity by 2035, up from 4 gigawatts previously.

Third, we are exploring hydrogen – and its derivatives such as ammonia – as a low-carbon energy source. Hydrogen is relevant for both our energy transition and carbon transition.  As a low-carbon energy carrier, hydrogen produces electricity when combined with oxygen in a fuel cell or combusted in a gas turbine. As a low-carbon fuel, hydrogen can be used directly in many industrial processes and transportation. But the technologies to produce, transport, and use hydrogen are nascent and costly. To realise the potential of hydrogen, we are: bringing together academia and industry to scale up hydrogen R&D, and forging international partnerships to build up hydrogen supply chains.

In particular, Singapore sees strong potential for ammonia – as a hydrogen carrier as well as a fuel for shipping and power. The Energy Market Authority and Maritime Port Authority are selecting a lead developer to provide an end-to-end low-carbon ammonia solution on Jurong Island. If successful, Singapore will be one of the first countries in the world to directly combust ammonia for power generation and deploy ammonia bunkering for international shipping.

Beyond producing cleaner energy, the energy transition is also about enhancing energy efficiency by users.

The Singapore Green Building Master Plan will hold buildings to high energy efficiency standards. From 2030, 80% of all new developments by gross floor area must achieve at least 60% improvement in energy efficiency over 2005 levels. Achieving this standard will contribute towards eligibility for a bonus gross floor area incentive. Beyond this, BCA will support best-in-class buildings to achieve 80% improvement in energy efficiency over 2005 levels by 2030.

Achieving higher energy efficiency in buildings will require advances in automation systems. Conventional building automation systems are not intelligent enough to achieve multiple objectives like energy efficiency and occupant well-being. A so-called model predictive control solution can do much better, optimising and coordinating air-conditioning, ventilation, lighting and shading, to achieve energy savings of up to 60%. What started as a research project by the National Technological University has since been commercialised and deployed at several buildings, including Jurong Town Hall and the PSA Tuas Port Maintenance Base.

Economic Transition

The third transition is economic, to capture new green growth opportunities and restructure the economy to remain competitive in a low-carbon future. Decarbonisation will require broader changes in industrial structure, business processes, and workforce skills.

The economic transition is about greening the brown and growing the green. We have to progressively decarbonise hard-to-abate carbon-intensive sectors like semiconductors, chemicals, and maritime services. We also have to grow new green sectors like carbon services, green and transition finance, and green ecosystem enablers like Measurement, Reporting and Verification, or MRV, services. The low-carbon economy of the future is likely to look quite different from today.

Greening the brown is not just about decarbonising Scope 2 emissions but also Scope 3. With the International Sustainability Standards Board requiring Scope 3 reporting, the pressure on companies to clean up their supply chains will increase. In the built environment sector, Scope 3 forms the lion’s share of total emissions. These emissions are also hard to abate, like cement and steel. The challenge for companies in Singapore’s built environment sector is greater because most of these materials are imported. Our companies would need to work together across the supply chain to explore ideas and push innovation in areas such as low-carbon concrete, electric furnaces, and use of low-carbon hydrogen in steel production.  

KEY ENABLERS FOR THE TRIPLE TRANSITION

Achieving the triple transition - in carbon, energy and the economy – will require several key enablers:

• Carbon Pricing.  Progressive increases in carbon taxes will send the right price signals for economy-wide decarbonisation.

• Technology.   Many of the barriers to cost-effective decarbonisation will require significant advances in climate-related technology.

• Finance.  More private capital and innovative financing instruments will be needed to support the triple transition.

• Data and Disclosure.  The disclosure of reliable and comparable sustainability data is necessary to guide and sustain decarbonisation efforts by businesses.

• Green Procurement.  Incorporating sustainability considerations in procurement decisions can be a powerful lever for decarbonisation across supply chains.  

Let me highlight three of the enablers – Technology, Finance, and Data and Disclosure.

Clean Technology

To effectively harness technology for decarbonisation, we need to strengthen collaboration across the public sector, industry, and academia.

The government has been stepping up support for solutions with high levels of technology readiness. BCA has enhanced the funding under its Green Buildings Innovation Cluster or GBIC programme to S$45 million. The enhanced programme will support research into alternative cooling technologies, smart building solutions, and next-generation building ventilation.

The SMU Connexion building is an interesting project supported by the GBIC programme, deploying a wide range of sustainable technologies. Their smart control system integrates building services with networked sensors for temperature, relative humidity, carbon dioxide and occupancy. By adjusting for outdoor weather conditions, the system avoids overcooling – a common problem in many of our buildings - and thereby minimises energy consumption. The fans in their air-conditioning units are integrated with CO₂ sensors, introducing fresh air only when CO₂ levels reach the upper range. The SMU Connexion building has achieved an energy efficiency improvement of nearly 65% from the 2005 baseline.

We are also seeing interesting innovations in buildings to better harness solar energy. At the PSA Tuas Port Maintenance Base, solar PVs are not just being deployed on rooftops, but also on the building’s vertical façade. At DBS Newton Green, the PV modules have solar panels on both sides. This enables harvesting not just the sunlight that falls on the roof but also the sunlight reflected from the roof surface.

Transition Finance

The challenge in financing decarbonisation is not green finance but transition finance.   Getting financing for fully green activities, like renewable energy deployment, is becoming easier notwithstanding high capital intensity and long payback periods. But financial institutions find it more difficult to assess transition activities – activities that move away from brown but are not yet fully green. Examples include the switch in electricity generation from coal to natural gas, or the use of carbon capture for the combustion of fossil fuels. The question around the pace of decarbonisation is also important. How fast should a company be transitioning, for it to be considered favourably for financing?

A key enabler for transition finance is international standards. Well-conceived standards enable financial institutions to more confidently invest in a company’s decarbonisation.  Let me cite an example from the building sector. An international alliance of leading green building rating system organisations has launched a guide to help bridge knowledge gaps⁸. The guide helps institutional investors and financial institutions better understand major building certification systems, and how those certifications align with the goals of sustainable finance.

Another enabler is taxonomies.  The Monetary Authority of Singapore, in collaboration with industry, has established the Singapore-Asia Taxonomy for Sustainable Finance. The taxonomy aims to serve as a common reference point for financial institutions to inform their financing decisions. It classifies activities into “green”, “red”, and “amber”, with the last category of “amber” signifying activities that are credibly transitional in nature, moving from “red” to “green”. Take for example the renovation of an existing building: it will be considered “green” if the renovation enables the building to reach the prevailing Green Mark Certification or align with relevant Climate Bonds Building Criteria; it will be “amber” or transition if the renovation leads to at least a 30% reduction in emissions or energy consumption up to the category’s sunset date of 2030. It will be “red” if it does not meet the above criteria. 

Data and Disclosure

Finally, data and disclosure. What gets measured gets done and what gets disclosed gets done even better. The disclosure of reliable and comparable sustainability data is a powerful tool to accelerate the triple transitions. It enables companies to benchmark themselves to their competitors. It enhances supply chain accountability and management of Scope 3 emissions. It helps governments to prioritise their decarbonisation efforts. It helps sectoral regulators to calibrate their emissions or efficiency-related requirements. It enables financial institutions to make more informed sustainable financing decisions.

As a key step towards a robust data and disclosure ecosystem, Singapore will introduce mandatory climate-related reporting. From FY2025, all listed issuers will be required to make annual climate-related disclosures, aligned with ISSB standards. From FY2027, all companies with annual revenue of at least $1 billion and total assets of at least $500 million will be required to do the same.

BCA has taken steps to increase the transparency of buildings’ energy performance. Building owners can benchmark the performance of their buildings to the top quartile of buildings in Singapore using the BCA’s Building Energy Benchmarking Report.

CLIMATE RESILIENCE

I have not touched on adaptation and resilience strategies to deal with the physical effects of climate change.

Even as it plans for the triple transition, the built environment sector must prepare for climate resilience. Many of Singapore’s climate vulnerabilities, like heat stress and rising sea levels, will have a significant impact on the built environment. This is why all new developments are required to be built on higher platforms, at least four metres above mean sea levels. Critical infrastructure will be built an additional metre higher. The sector must also prepare for the effects of heat stress on related industries like construction. As our climate continues to deteriorate, even more adaptation measures may be required in the built environment sector in future. In short, resilience must become an integral part of our transition planning.

THE FOURTH TRANSITION

I have spoken about our triple transition – carbon, energy, and economic.  I have also touched on three key enablers for this transition – technology, finance, and data and disclosure.

Perhaps there is a fourth transition that the world and Singapore need to make – a transition in mindsets. It begins with building awareness – that climate change is no longer a prediction but a current reality that will progressively worsen. We need to transition from short-term thinking to long-term thinking. The time for action is not 2030 or 2050, but now.   We need to transition from viewing carbon as a constraint on economic growth to viewing low-carbon as a source of competitive advantage. This is how many of the most progressive companies in the world are approaching the issue. We need to transition from seeing decarbonisation purely as a cost to seeing it as an investment in future growth. Finally, we need to transition from considerations based purely on self-interest to collective interest.

We must transition because it is the right thing to do – for our people and our planet.

Thank you.

¹ State of the Global Climate 2023, World Meteorological Organisation

² NASA’s Goddard Institute for Space Studies

³ Net Zero Stocktake 2023, New Climate Institute, Oxford Net Zero, Energy & Climate Intelligence Unit and Data-Driven EnviroLab

⁴ CO₂ Emissions in 2023, IEA

⁵ Renewables & Power Trends Report, Rystad Energy

⁶ World Energy Outlook 2023, IEA

⁷ Energy Transition Investment Trends 2024, BloombergNEF

⁸ Financing Transformation: A Guide to Green Building for Green Bonds and Green Loans