Speech by Senior Minister of State Dr Amy Khor - Pressing on Towards Net Zero

Speech by Dr Amy Khor, Senior Minister of State for Sustainability and the Environment, at Ministry of Sustainability and the Environment's Committee of Supply (COS) Debate 2024, 4 March 2024

Introduction – Pressing on Towards Net Zero

1 Chairman, while we push hard on public hygiene which is the foundation for healthy, resilient communities, we must also press on with our efforts to confront climate change.

2 Climate change has profound impacts on our living environment and public health.

3 Singapore is committed to peaking emissions before 2030, and achieving net zero by 2050. We have taken concrete steps to reduce our carbon footprint. These include gradually increasing our carbon tax rate, facilitating renewable energy imports and promoting energy efficiency. Everyone needs to fight climate change – the Government, businesses, and households.

Update on Green Procurement Policies under GreenGov.SG

4 Let me start with the Government. In 2021, we launched GreenGov.SG, the public sector’s sustainability movement, where we committed to ambitious carbon and resource efficiency targets. Last December, we published the inaugural GreenGov.SG report, which documented our sustainability efforts, progress and plans.

5 Ms Cheryl Chan and Mr Don Wee asked about our plans for the next GreenGov.SG report, and whether Scope 3 emissions will be included. The second report will be released this year, and will include data on waste and waste reduction efforts. As there are wide-ranging sources of Scope 3 emissions from the Government’s extensive activities, and the sources that are deemed material vary across agencies, we are still studying the appropriate approach.

6 Under GreenGov.SG, we are pursuing green government procurement to spur more environmentally sustainable business practices and accelerate the supply of more environmentally-friendly goods and services. We want to encourage companies to green their processes and products. As announced at COS last year, we will consider the sustainability practices of companies that tender for government projects, starting with large construction and ICT projects. This is on top of the sustainability requirements that we have imposed for the goods we procure.

7 Ms Chan and Mr Wee also asked how we decided on green government procurement criteria for the construction and ICT sectors. Over the past year, we have consulted the industry, and incorporated their feedback on the environmental sustainability related evaluation criteria. Subsequently, we piloted the criteria by setting aside up to 5% of evaluation points for five construction tenders and one ICT bulk tender.

8 For the pilot construction tenders, companies were assessed on whether they have: (a) Carried out climate-related disclosures, (b) Adopted decarbonisation technologies, such as electric generators, (c) Incorporated low-carbon construction materials, and (d) Achieved relevant sustainability certifications.

9 For the ICT sector, hardware suppliers were assessed based on criteria such as sustainable packaging options and sustainability-related certifications. We also plan to include criteria for data centre operators and cloud service providers, such as whether companies have embarked on sustainability reporting, and the power usage effectiveness of their data centres.

10 We will continue to refine our environmental sustainability evaluation criteria for large construction and ICT tenders with minimum Estimated Procurement Value of $50 million and $10 million respectively. To Mr Wee’s query on the expansion timeline, we plan to expand this initiative to include companies that tender for MICE and other events organised by the public sector from FY2025. We will conduct industry consultations with key players, before finalising the details.

Helping Businesses to Decarbonise and Improve Resource Efficiency

11 Beyond the public sector, we will continue to facilitate the greening of businesses. We hope to encourage companies, particularly SMEs who are less well-resourced, to adopt sustainability practices while improving their bottom line.

12 Ms Chan, Mr Louis Ng, and Ms Poh Li San asked how the Government is supporting SMEs to implement green measures in the supply chain. The Government is providing local enterprises with more tools and resources to become sustainable. Companies can tap on capability building programmes such as courses and playbooks on decarbonisation, or funding support to do sustainability reporting and invest in energy-efficient equipment.

Energy Efficiency Grant for SMEs

13 As shared by SM Teo, we have increased the carbon tax rate to $25 per tonne this year. We will progressively raise it to between $50 to $80 per tonne by 2030. This better prices the externality of carbon emissions, and nudges businesses and individuals to reduce their carbon footprint.

14 Enhancing energy efficiency will help businesses cut energy costs. Mr Gan Thiam Poh and Ms Poh would be happy to know that NEA’s Energy Efficiency Fund (E2F) has been supporting SMEs in the manufacturing sector since 2017. Enhancements to the E2F from 2022 onwards, such as increasing the grant support cap from 50% to 70%, has increased take-up rate by four-fold, to 48 projects. The amount of committed funding also increased from around $700,000 to around $2.1 million post-enhancement.

15 The Government has reviewed existing energy efficiency grants by various agencies and will subsume the E2F under the expanded Energy Efficiency Grant (EEG), as announced at Budget 2024. The expanded EEG will benefit more sectors, including Construction, Maritime, and the Data Centres industry. It will adopt a two-tier structure, with higher support of up to 70% provided to companies that wish to make larger investments to drive greater energy efficiency.

16 I would like to reassure Mr Ng that the Government is streamlining the application process by consolidating EEG applications across sectors on the Business Grants Portal. The Government will continue to work closely with the industry, including Trade Associations and Chambers, to proactively reach out to SMEs to promote awareness of the EEG.

Promoting Energy-Efficient Equipment

17 Adopting energy-efficient equipment will translate to significant cost savings for businesses and households. NEA’s energy efficiency labels and standards have helped companies and consumers make informed decisions since 2008. For instance, the average energy efficiency of air-conditioners and refrigerators improved by 59% and 42% respectively. This is equivalent to the annual energy consumption of about 405,000 4-room housing units, and translates to annual overall household energy savings of more than $500 million.

18 From 1 April 2025, we will be implementing labels and standards for two more equipment types, namely household water heaters and commercial storage refrigerators.

19 Water heaters are the third-highest energy consuming household appliance. There are more energy-efficient options, such as instantaneous water heaters, which on average consume about 50% less electricity than electric storage water heaters. This enables homeowners to save on energy bills.

20 Commercial storage refrigerators are prevalent in food and beverage establishments like hawker centres, food courts and restaurants, and can account for about one-third of hawkers’ electricity usage.

21 As refrigerators consume energy throughout the day, we encourage businesses to purchase energy-efficient models to enjoy long-term savings, such as inverter technology refrigerators that are on average 40% more energy-efficient. This will result in annual energy cost savings of about $700, with payback on capital expenditure within a year.

22 Overall, the lifecycle cost of such efficient models are up to 60% lower than that of standard models. Furthermore, businesses can apply for the EEG to offset up to 70% of the upfront costs.

23 In 2019, to optimise energy consumption at the systems-level, we introduced Minimum Energy Efficiency Standards (MEES) for water-cooled chilled water systems to encourage adoption of energy-efficient chilled water operations by industrial facilities.

24 Mandatory MEES requirements were introduced for new industrial facilities in 2020. This has helped new facilities each save an average $300,000 annually in electricity costs, recouping their initial outlay just after 3 years.

25 We will amend the Energy Conservation Act this year to effect similar requirements for existing industrial facilities from December 2025. Existing industrial facilities can expect average energy savings of about S$1.25m per year per facility across the system’s 15-year lifespan, and to recover retrofitting and operating costs within 5.5 years.

Zero Waste Manager Course

27 Besides improving energy efficiency, pursuing sustainable waste management practices should also be a priority for organisations. By following the 3Rs to reduce, reuse and recycle waste, businesses can increase efficiency and lower costs.

28 Ms Poh asked how we are supporting businesses in building up capabilities to better manage their waste. Businesses have suggested that it would be useful to appoint staff with formal training to champion the shift towards circular and zero waste business models. In response, NEA has worked with training providers to introduce Zero Waste Manager (ZWM) courses to train participants to implement 3R efforts and integrate them into their companies’ organisational culture.

29 The courses will also guide companies in fulfilling regulatory requirements such as Mandatory Waste Reporting (MWR). Not only will the courses benefit some 750 companies covered under the MWR scheme, they can also equip other companies with the necessary knowledge to kickstart their waste reduction and recycling journeys.

30 Additionally, the ZWM course will benefit employees and companies in the waste management sector looking to provide value-added services, such as waste consultancy and audit services. We encourage all companies to appoint and train staff to lead their waste management and 3R efforts.

31 These 2- to 3-day courses are developed and conducted in partnership with three training providers: the Waste Management and Recycling Association of Singapore, Republic Polytechnic, and NTUC Learning Hub.

32 To ensure these courses are accessible and affordable, they will be subsidised by SkillsFuture Singapore and whitelisted under Workforce Singapore’s Career Conversion Programmes for Sustainability Professionals.

Supporting Households to be more Climate-friendly

33 Mr Gan and Ms Hany Soh asked if there will be support for households, which will face higher utility bills from the carbon tax increase. We remain committed to helping households cope with cost of living. As announced by DPM Wong, additional U-Save rebates will be disbursed to HDB households as part of the enhanced Assurance Package, cushioning increases in utility bills.

Enhanced Climate Friendly Households Programme (CFHP)

34 We will enhance support for households wishing to be more energy- and water-efficient, which will also help lower their utility bills.

35 Launched in 2020, the existing Climate Friendly Households Programme (or CFHP) provides $225 worth of vouchers to 1- to 3-room HDB households, consisting of a $150 refrigerator voucher, $50 shower fittings voucher, and $25 LED lighting voucher.

36 As of January 2024, more than 141,000 households have registered for their Climate Vouchers, and about 54,000 vouchers have been utilised. To give households more time to utilise their current set of Climate Vouchers, we have extended the qualifying redemption period to 20 March 2024.

37 Mr Ng asked if we will be expanding the programme to include more households and appliances. As announced by SM Teo, we will enhance the CFHP.

38 From 15 April 2024, we will expand the programme to all 1.1 million HDB households in Singapore, a more than threefold increase in coverage. This is to encourage wider adoption of energy- and water-efficient products.

39 Every HDB household will receive $300 worth of Climate Vouchers, and the number of eligible product types will be expanded from 3 to 10, including 4-tick washing machines. To Mr Gan and Mr Ng’s queries, other additions like direct current fans will help households keep cool in a more energy-efficient manner.

40 The 10 eligible products contribute to around 60% of an average household’s electricity consumption, and around 90% of water consumption.

41 To make it more convenient for households to use the Climate Vouchers, more retailers will come onboard the programme, taking the total number of participating retailers to 14, with about 300 stores island-wide.

42 With these enhancements, we hope to incentivise more households to choose resource-efficient options from the outset, or when their appliances and fittings are due for replacement.

43 HDB households who have used the $225 vouchers under the current CFHP can also claim the new $300 vouchers under the enhanced CFHP following its commencement. Unlike the current CFHP where the voucher amount is fixed for each eligible product type, the enhanced CFHP will allow households to have more flexibility in using their vouchers, and select different denominations when purchasing eligible appliances.

44 The enhanced Climate Vouchers will be available from 15 April 2024 via the RedeemSG platform, and remain valid until 31 December 2027. Members of the public who need support in claiming the Climate Vouchers online may call NEA’s hotline for assistance.

45 Chairman, in Mandarin, please.

46 国家环境局将加强“气候友善家庭计划”，以鼓励更多家庭采取更环保、 更可持续的生活方式。长期下来，使用较节能和省水的电器及配件可以帮助家庭节省水电费的开销。通过升级版的计划，更多户家庭将受益。优惠券的总额，和电器与配件的种类与选择，也将增加 。

47 所有住在政府组屋的家庭都可享有价值三百（300）元的气候优惠券。他们可用优惠券向参与计划的商家购买十种节能和省水的电器及配件，包括直流电风扇、和洗衣机等。

48 从四月十五日起，每户家庭的一名成员可上网到Redeem.gov.sg领取优惠券。年长者或其他无法上网的家庭可拨打国家环境局热线索取协助。

Advancing our Zero Waste Vision

49 Reducing waste will also reduce emissions and cut costs. We should thus seek to reduce wasteful consumption, which Ms Carrie Tan has spoken about.

50 Sustainable consumption involves the responsible management of packaging and products at their end-of-life. Let me provide an update on two of our priority waste streams – electrical and electronic waste (or e-waste), and packaging waste.

E-waste EPR

51 On the e-waste Extended Producer Responsibility scheme (or EPR scheme), we are in our third year of implementation and have since collected over 16,000 tonnes of e-waste, from over 800 collection points island-wide as of December 2023. This is a significant increase from the 9,000 tonnes collected as of December 2022.

52 Overall collection rates have improved, thanks to the close collaboration with ALBA, retailers, and Town Councils to publicise the scheme and encourage participation. However, we must continue to double down on efforts to achieve our target collection rates of 60% of large household appliances, and 20% of other regulated consumer products’ put-to-market weight.

53 Collection rates for lamps and household batteries have tripled to 4% and 10% respectively whilst the collection rate for ICT equipment increased slightly to 5%. However, the collection rate for large household appliances has declined from 18% to 15%.

54 To improve this, we will strengthen collaboration with retailers to further publicise their obligatory 1-for-1 takeback services to customers, and continue to work with Town Councils through the quarterly collection drives. We seek everyone’s continued support to deposit their e-waste via the various channels available.

Beverage Container Return Scheme

55 Last year, we amended the Resource Sustainability Act to put in place the legislative framework for the Beverage Container Return Scheme (or BCRS). We are working with stakeholders on scheme implementation and will share more details when ready.

Next Phase of EPR for Packaging Waste

56 Beyond the BCRS, we are exploring other initiatives to manage packaging waste. In 2021, we implemented the Mandatory Packaging Reporting scheme. This raises awareness amongst companies on the amount of packaging they generate, and spurs them to reduce packaging use.

57 Building on our current initiatives, we are exploring the feasibility of expanding the EPR approach to broader packaging waste types. We have awarded a consultancy study to review overseas best practices and recommend a suitable scheme for Singapore. We will consult stakeholders at an appropriate juncture. The study is expected to be completed by 2025.

Conclusion

58 Chairman, to reach net zero, everyone must pitch in. The Government will play its part in greening the public service, and support businesses and households to contribute. Let us all embrace going green, which is not just environmentally-friendly, but certainly, can also be wallet-friendly.