SINGAPORE - The upcoming carbon tax here could well boost, not hamper, economic competitiveness.
Minister for the Environment and Water Resources Masagos Zulkifli had this message for industry on Thursday (Oct 12) at the launch of a new industrial co-generation facility.
Economies of the future, he said, will emphasise energy-efficient and low-carbon growth - and Singapore must follow suit to keep up with this transformation.
"We are aware of industry concerns over the impact of the carbon tax on competitiveness, given that Singapore is an export-oriented economy," Mr Masagos said.
"But precisely because Singapore is an open, globally connected and export-driven economy, our companies must stay ahead to stay competitive."
The Government announced in this year's Budget that it will introduce a carbon tax on large direct emitters of greenhouse gases such as power stations from 2019. The tax is expected to affect between 30 and 40 emitters currently operating in Singapore.
Mr Masagos was speaking at the opening of global petrochemical firm ExxonMobil's new co-generation plant in Pioneer Road, which uses both natural gas and waste heat from refinery operations to produce power and steam.
It is expected to cut ExxonMobil's net carbon dioxide emissions here by 265 kilotons a year, improving the refinery's energy efficiency by between 4 per cent and 5 per cent - "making it one of ExxonMobil's leading sites in the world for energy performance", said project executive Moiz Husain.
The company has more than S$20 billion in fixed assets in Singapore, and its refinery and petrochemical complex here is its biggest integrated manufacturing site worldwide.
ExxonMobil Asia Pacific chairman and managing director Gan Seow Kee said at the launch that the firm "strongly supports the Government's drive to encourage companies and organisations to improve energy efficiency as a critical lever to meet Singapore's climate change goals".
While the Republic produces just 0.11 per cent of emissions worldwide, Mr Masagos noted, it has pledged to cut emissions intensity by 36 per cent from 2005 levels, by the year 2030.
It is taking this step because "action on climate change is a shared global responsibility", the minister said.
"Despite the uncertainties in global climate leadership after the US' announced withdrawal from the Paris Agreement, Singapore will continue to work with all other small states and major economies to stay the course."
He added that the need to slash emissions was brought home urgently by the recent devastation wreaked by hurricanes in the Americas and Caribbean: "Climate change poses a real threat to small island states like Singapore."
Mr Damian Chan, Economic Development Board executive director for energy and chemicals, said in a statement that investments such as the new ExxonMobil co-generation plant "reflect our emphasis on growing the energy and chemicals industry in a competitive and sustainable manner".
With the latest facility - its third - ExxonMobil can now tap co-generation to meet almost all the power and steam needs of its integrated complex here.
The new plant, which started generator operations in July, has a capacity of 84 megawatts (MW) - the equivalent of the annual electricity use of more than 150,000 four-room Housing Board flats.
It comes on top of another 360MW of co-generation capacity from ExxonMobil's other two plants.