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Business Times
2 days ago
- Business
- Business Times
Singapore's climate strategy stands firm amid global setbacks on emissions
[SINGAPORE] As major economies scale back climate commitments and global momentum stalls, Singapore stands out for its steadfast approach to climate action. Recent policy reversals in countries like the United States – where significant climate safeguards for air, water, wildlife, and toxic chemicals have been dismantled – have cast doubt on the world's collective resolve. Several major signatories to the Paris Climate Agreement also missed the Feb 10, 2025, deadline to submit updated carbon emission targets to the United Nations (UN), signalling a worrying slowdown in global efforts to cut emissions. In contrast, Singapore remains resolute in pursuing its climate ambitions. For one thing, it was among the few nations to meet the UN deadline for new climate targets. Prime Minister Lawrence Wong also reaffirmed Singapore's commitment in the latest Budget statement, reiterating that the government 'remains resolute' in its decarbonisation efforts, despite slowing momentum on the issue globally. During Budget 2025, he also introduced a S$5 billion injection into the Future Energy Fund to secure clean power, alongside incentives to accelerate the adoption of zero-emissions heavy vehicles like electric goods vehicles and buses. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Mitigating risks Singapore's commitment to decarbonisation is not only a far-sighted course of action, but also an act of great wisdom. As climate change accelerates and extreme weather events become more common, governments that delay taking action now will face a far more challenging transition down the line. When disasters like wildfires, floods, and heatwaves grow too frequent and severe to overlook, governments will be compelled to take drastic actions – but at that point, it may already be too late to prevent the catastrophic consequences. By addressing climate risks today, Singapore is not only preparing to handle future challenges proactively, but also positioning itself to capitalise on new opportunities in the burgeoning global awareness and seismic shift towards a low-carbon economy. The city-state aims to cut emissions to between 45 million and 50 million tonnes of carbon dioxide equivalent by 2035. This is on top of an ambitious plan to achieve net-zero emissions by 2050, through the Singapore Green Plan 2030. This national strategy is anchored by five key pillars: city in nature; energy reset; sustainable living; green economy; and resilient future. One focus of the Singapore Green Plan is about enhancing the city-state's liveability. The government is expanding the rail and cycling networks, retrofitting buildings to be greener, and creating more parks and green spaces. Clear targets have also been set to cut landfill waste and reduce water usage. These efforts not only advance the goal of creating sustainable, eco-friendly homes, but also fulfil residents' desires for a cleaner, healthier living environment. Another key priority is transitioning to sustainable energy sources. Singapore aims to raise its solar energy deployment to 2 gigawatt-peak by 2030, which would meet 3 per cent of the city-state's projected energy needs. It also aims to slash emissions in the transport sector, by spurring the transition towards electric or low-emission vehicles across air, land, and sea. Achieving these goals requires the right skilled talent to drive scientific innovation and bring new inventions to market. Hence, the energy transition will create new job opportunities across various sectors including research, analytics, and finance. Globally, the International Energy Agency projects the creation of 10.3 million new jobs by 2030 as the world shifts to cleaner energy. In Singapore, the green economy is a key growth sector, with the national skills agency SkillsFuture identifying strong demand for highly adaptable and in-demand skills. Aside from talent, transitioning to a low-carbon economy will also demand substantial investments. This has led to the growth of sustainable finance, which is channelling significant new capital into the economy by supporting investments in infrastructure, expanding the green bond market, and fostering the development of carbon trading hubs. A passing fad? Some have questioned whether shifts in global climate policy and ongoing trade uncertainties might mean that sustainable finance is losing its relevance. However, this is far from the case. While recent changes in trade policies may complicate supply chains for technologies like electric vehicles and solar panels, these challenges are also prompting governments to strengthen domestic capabilities and encouraging companies to localise their supply chains. Singapore is not the only country advancing these efforts through a national climate policy platform. The European Union, for instance, aims to be carbon-neutral by 2050 through a set of policy initiatives put forth under the European Green Deal. Further, even if the tempo of climate policy action may appear to be abating, some structural trends are here to stay. Rapid urbanisation and population growth are set to double electricity demand globally over the next two decades. Meeting this demand will require increased energy supplies, particularly from renewables. With solar and wind now the most cost-effective sources, global investments in renewables is expected to surge, making them the preferred options for new energy supplies. At the same time, advancements in artificial intelligence will drive demand for energy-efficient data centres to support these energy-intensive technologies. Separately, the slowdown in global mitigation efforts has heightened the risk of climate-related damage and loss. In response, investors are seeing growing opportunities in climate adaptation measures. According to a report by Singapore's sovereign wealth fund GIC, global annual revenues from various adaptation solution sectors could rise from US$1 trillion today to US$4 trillion by 2050. The associated investment opportunities are projected to expand from US$2 trillion now to US$9 trillion by 2050, with US$3 trillion of this growth directly linked to global warming. These projections are based on the assumption that global temperatures will increase by 2.7 degrees Celsius by the end of the century. A separate report by Temasek, which focuses on private equity opportunities, estimates that global annual demand for adaptation financing could reach between US$500 billion and US$1.3 trillion from 2025 to 2030. This is significantly higher than current adaptation financing levels, which average about US$76 billion per year and are primarily sourced from public funds. Notwithstanding the observation that some governments are slowing down their efforts to promote climate protection, there remains a growing pivotal emphasis on environmental protection and sustainability. The shift toward a sustainable future remains inevitable. In time, Singapore's current investments in a greener future will yield qualitative dividends for its people, to be able to reside in a salubrious climate.
Business Times
04-05-2025
- Business
- Business Times
Asia leads decarbonisation push to build green hydrogen economy
THE race to net-zero is on, and green hydrogen is emerging as a game-changer. More than just a cleaner fuel, it enhances energy security, resilience and carbon reduction. In Asia, where energy demand is rising rapidly, scalable low-carbon solutions are essential. With a strong track record in renewables, Sembcorp is driving this transition to a cleaner, more sustainable future for the region. Powering the future of energy and industry Green hydrogen is reshaping industries and redefining energy systems. From powering factories and refuelling transport to decarbonising hard-to-abate sectors, its potential is immense. Green ammonia, a key hydrogen carrier and energy storage solution, is also gaining traction. While large-scale adoption is still in its early stages, governments are rolling out incentives, supportive policies and infrastructure investments to accelerate adoption and integration. The market is responding with confidence – global investments in green hydrogen and ammonia projects surpassed US$680 billion in 2024, with over 1,500 projects announced globally. With strong public and private sector backing, these innovations are transforming energy systems and advancing the global transition towards sustainability. Spearheading the global hydrogen transition Asia is emerging as a global leader in the hydrogen space, leveraging its abundant renewable resources, progressive policies and strong momentum in project execution to drive the clean-energy transition. Nations like India, Singapore, Japan and China are making significant strides, accelerating the region's potential to become epicentres of the global green hydrogen economy. For instance, India's National Green Hydrogen Mission offers a 25-year waiver on interstate electricity transmission charges for green hydrogen and ammonia projects commissioned before Dec 31, 2030. The initiative also provides capital support for electrolyser manufacturing and green hydrogen production, while establishing hydrogen export hubs. With a target to produce five million metric tonnes per annum of green hydrogen by 2030, India is well-placed to harness its abundant natural resources and grow its renewable energy capacity to drive large-scale hydrogen production. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Singapore is also aiming for green hydrogen to supply half its power needs by 2050. Its National Hydrogen Strategy strengthens energy security, and the injection of another S$5 billion into the Future Energy Fund will further support the development of infrastructure and emerging technologies. Japan has launched a 'Contracts for Difference' scheme, which bridges the price gap between hydrogen and fossil fuels, accelerating industrial adoption. The country plans to invest 15 trillion yen (S$134 billion) over 15 years to scale production and infrastructure. China is leading in hydrogen innovation and project execution, leveraging state-driven policies and funding to accelerate market growth and technological advancements. Its industrial ecosystem and commitment to clean energy place it at the forefront of the hydrogen revolution. Despite the positive momentum, challenges remain. Infrastructure gaps, competing technologies and the need for improved electrolyser efficiency and storage solutions must be addressed. Scaling green hydrogen requires cost reductions in production, storage and transport. Strategic partnerships such as take-or-pay contracts with suppliers and off-takers can mitigate risks and attract investments. With strong government support and the right market mechanisms, green hydrogen will be a transformative force in clean energy. Sembcorp: Advancing energy transition through green hydrogen Sembcorp's strong renewables capabilities in key geographical regions give us a credible 'right to play' in the green hydrogen space. Our strong presence in supply and demand centres supports large-scale, cost-effective green hydrogen production and offtake. In India, we harness our wind and solar capabilities to develop competitive green hydrogen and green ammonia projects. Through collaborations with the Tamil Nadu and Odisha governments, we are exploring the development of green hydrogen and ammonia production facilities to support India's decarbonisation goals. We have commenced front-end engineering and design work for our green ammonia plant in Tuticorin, reflecting our commitment to establish Tamil Nadu as a global hub for green hydrogen production. Additionally, we are collaborating with Sojitz, Kyushu Electric and NYK for large-scale green ammonia production in India for export to Japan, reinforcing our role in facilitating cross-border clean-energy trade. In the Middle East, we are looking to grow our renewables portfolio, which can potentially be used for future green hydrogen production. Our expertise in renewable energy positions us to enable large-scale green hydrogen production and export. As one of Singapore's largest importers and retailers of natural gas, we have access to diversified low-carbon feedstocks and can facilitate alternative fuel imports and hydrogen blending with natural gas. This positions us to support industries in transitioning to cleaner energy sources while maintaining power reliability. Through long-term contracts, we provide customers with scalable decarbonisation solutions and supply security, ensuring a stable and sustainable energy transition. To prepare for the hydrogen economy, we are building Singapore's first 600MW hydrogen-ready combined cycle power plant, equipped with Mitsubishi's advanced J Series gas turbines, set for operation by 2026. We are also exploring the retrofitting of our existing power plant with ammonia-firing capabilities through partnerships with GE Vernova and IHI. To advance Singapore's National Hydrogen Strategy and accelerate the adoption of low-carbon ammonia as a viable fuel, we have been shortlisted by the Energy Market Authority and the Maritime and Port Authority to develop a low- or zero-carbon ammonia solution for power generation and bunkering on Jurong Island. This will support Singapore's goal of achieving net-zero emissions by 2050, reinforcing its position as a leader in hydrogen technologies. Beyond Singapore, we are exploring hydrogen pipeline imports from neighbouring countries to secure a stable and sustainable supply of green hydrogen. These efforts are crucial to meeting the region's growing energy needs and accelerating hydrogen adoption. In South-east Asia, we strengthened our green feedstock production by partnering with PLN Energi Primer Indonesia (PLN EPI) to develop the region's largest green hydrogen production facility in Sumatra, Indonesia, with an annual capacity of 100,000 metric tonnes. Additionally, in collaboration with PLN EPI and Transportasi Gas Indonesia, we are exploring the development of a hydrogen transportation pipeline linking Sumatra, the Riau Islands and Singapore, facilitating the creation of a regional hydrogen hub. Unlocking the full potential of green hydrogen and ammonia Undeniably, green hydrogen and ammonia offer a cleaner and more sustainable alternative to fossil fuels. Asia's proactive approach, driven by policy support, expanding infrastructure and vast renewable energy potential, is shaping a thriving hydrogen economy. The writer is CEO of Hydrogen Business in Sembcorp Industries
