Tackling climate change by focusing on industrial energy efficiency

Minister for the Environment and Water Resources Masagos Zulkifli.
Minister for the Environment and Water Resources Masagos Zulkifli.PHOTO: BERITA HARIAN

SINGAPORE - The Republic is making strides to tackle climate change, by focusing on a major emitter of greenhouse gases here: the industrial sector.

There are plans to make changes to an existing legislation that governs energy use among energy-intensive companies, said Minister for the Environment and Water Resources Masagos Zulkifli on Wednesday (Jan 11) afternoon. The amendments will spur such firms will be more efficient with their use of energy.

"After studying and consulting with the industry, the Government will be introducing new industrial energy efficiency initiatives as well as enhancing existing ones, to further spur our efforts," said Mr Masagos.

He was speaking during a pre-Budget consultation on industrial energy efficiency, attended by representatives from companies, as well as academics. Dr Amy Khor, Senior Minister of State for the Environment and Water Resources, was also present.

The Act now requires large energy users 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 .

No details on how the Energy Conservation Act will be amended were given during Wednesday's event, but details are expected to be revealed after Budget debates start next month.

But industry players at the event say one way the Act could be made more robust is by giving firms incentives and subsidies to be energy efficient, as doing so could help them be greener without putting too much of a strain on finances.

"Semiconductor industries are large energy users and we are already following the Energy Conservation Act - we have an energy manager, continuous improvement programme, and we look at means and ways to save energy," said Mr Jagadish C V, chief executive from Systems on Silicon Manufacuturing Co.

"But what I would like to see... is an Act that helps the industry save energy with a known return on investment,"he added.

With an Act in place, companies will have to comply.

"But if the cost of doing business is not competitive, my shareholders will make a decision to move (the plant) to elsewhere that is more competitive."

To do this, the Act could provide for subsidies or tax rebates, he said.

In response, Mr Masagos said feedback from the session will be taken into account. But he pointed out that subsidies aside, becoming energy efficient can also help companies save money.

Even the simple act of changing fluorescent lights to LED bulbs can help companies reap savings, he said.

Since the Act was rolled out in 2013, slight improvements in industrial energy efficiency have been observed. In 2014, industrial energy efficiency improved by 0.4 per cent. Still this was lower than the 0.7 per cent target.

Said Mr Masagos: "Given this, there is clearly room for improvement. We should strive to achieve what leading developed countries like Belgium and the Netherlands have - realising industrial energy efficiency improvement rates of 1 to 2 per cent annually."

That the industrial sector was singled out in Singapore's quest to go green is not surprising.

In 2012, this sector - which comprises semiconductor and pharmaceutical companies, for example - accounted for 59 per cent of greenhouse gas emissions in Singapore, said Mr Masagos.

That proportion is roughly the same today, said Professor Subodh Mhaisalkar, executive director of the Nanyang Technological University's (NTU) Energy Research Institute.

He noted that Singapore's improvement in industrial energy efficiency of 0.4 per cent in 2014 was surprising.

"Belgium and the Netherlands, which have been working on energy efficiency for much longer than us, can achieve improvements of 1 to 2 per cent despite having harvested the low hanging fruits," Prof Subodh said.

He noted that Singapore may be lagging behind due to lack of expertise in this area.

Singapore's target is to stop further increases to its greenhouse gas emissions by around 2030. It also pledged to be greener economically, by reducing the amount of greenhouse gases emitted to achieve each dollar of gross domestic product - by more than a third.

Wednesday's event was the first of three pre-COS sessions organised by the Ministry for the Environment and Water Resources.

Two other sessions on water conservation (Feb 9) and vehicle emissions (Jan 25) will be held in the coming weeks.

Such events help the Government collect feedback from stakeholders ahead of announcements made during the annual Budget, which will be delivered by Finance Minister Heng Swee Keat in February.