Parliament: Large polluters must improve energy efficiency or risk heftier penalties

With the new changes, companies in the industrial sector have to be more energy efficient or risk being slapped with heftier penalties.
With the new changes, companies in the industrial sector have to be more energy efficient or risk being slapped with heftier penalties. PHOTO: ST FILE

SINGAPORE - Large polluters in the Republic will have to step up their green efforts, now that a law governing energy conservation has been enhanced.

Changes to the Energy Conservation Act, which were passed in Parliament on Monday (Apr 3), will require companies in the industrial sector to be more energy efficient - or risk being slapped with heftier penalties.

For instance, companies will have to be more active in looking for opportunities to improve energy efficiency in workplace processes, and ensure that common industrial equipment and systems, such as motors, meet minimum energy performance standards.

They will also have to adopt a structured measurement, reporting and verification system for their greenhouse gas emissions, a move which will help pave the way for the carbon tax scheme the Government plans to impose from 2019. The scheme will tax power stations and other large emitters based on the amount of greenhouse gases they produce, likely in the range of $10 to $20 per tonne.

The enhanced law also requires all new industrial facilities and major expansion projects to undergo design reviews to incorporate energy efficiency measures from 2018.

Previously, the Act only required large energy users to appoint an energy manager, routinely monitor and report energy use and annual emissions, as well as submit annual energy efficiency improvement plans to the National Environment Agency.

In outlining the changes to the law in Parliament on Monday, Minister for the Environment and Water Resources Masagos Zulkifli said: "As a result of these enhancements, we will be raising penalties for several non-compliances to reflect the higher value of industrial goods, and to bring them in line with other legislation."

He did not give details on the heftier fines, but said companies can benefit from long-term cost savings, and increased competitiveness, if they comply with the new measures.

For instance, during the debate on his ministry's budget in March, Mr Masagos had cited the example of electronic component manufacturer Murata Electronics Singapore. The firm will be replacing 50 motors with higher-efficiency ones, helping it save $21,000 on electricity a year.

The enhanced law will help Singapore tackle climate change by tackling the largest emitters here - the sector is the largest energy user, consuming about two-thirds of the nation's total energy consumption, and contributing about 60 per cent of Singapore's carbon emissions. "Improving energy efficiency, or EE for short, in the industrial sector, is thus key to achieving our climate change goals," said Mr Masagos.

Under the Paris climate pact inked in December 2015, Singapore pledged to reduce the amount of greenhouse gases emitted to achieve each dollar of gross domestic product by 36 per cent from 2005 levels, come 2030. It has also pledged to stop any increase to its greenhouse gas emissions by around 2030.

The enhancements to the Act will also see a new Vehicular Emissions Scheme, which will replace the current Carbon Emissions-based Vehicle Scheme. Under the old scheme, only carbon dioxide is taken into consideration in determining the emissions level of a vehicle. But the new Vehicular Emissions Scheme will also consider other harmful pollutant emissions in addition to carbon dioxide.