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Singapore tackles GHGs from major emitters at heart of its industrial hub

06 December 2021 Max Tingyao Lin

Singapore, one of the few rich nations without a net-zero by 2050 target, is finally showing more climate ambition by establishing a decarbonization roadmap for major emitters on Jurong Island.

Experts said Singapore is moving in the right direction as the island is home to most of its oil refining, petrochemicals, and power plants, and expect the country to leverage its status as a top finance and technology hub to push the plan through.

Still, some believe the government needs to introduce more policy measures—such as a higher carbon tax and financial incentives for clean hydrogen—to help avoid climate disaster, especially rising sea levels.

"Plans for decarbonization for Jurong Island are a good start but much more can be done," Anna Chapman, a climate and energy policy analyst from non-profit Climate Analytics, told Net-Zero Business Daily. "Singapore has the opportunity to transition its economy away from fossil fuels."

Low-lying Singapore is exposed to significant climate risks amid rising sea levels, but the country is also Asia's largest petroleum trading hub. Official data showed the energy and chemicals sector accounted for 3% of the city state's economy last year.

When updating its Paris Agreement-required Nationally Determined Contribution (NDC) last year, Singapore reaffirmed its target to reach peak GHG emissions of 65 million metric tons (mt) of CO2 equivalent (CO2e) by 2030.

The country also aims to halve its emissions from that proposed peak to 33 million mt of CO2e by 2050 but stated that net zero would only be achieved "as soon as viable in the second half of the century."

Last month, Singapore's Economic Development Board (EDB) outlined a long-term target to achieve more than 6 million mt of carbon abatement per year on Jurong Island by 2050.

The government agency, responsible for developing Singapore's business strategies, said this goal would be reached via "low-carbon solutions" including clean hydrogen and carbon capture, utilization, and storage (CCUS).

Great carbon capture potential

In a research paper published earlier this year, scholars from the National University of Singapore (NUS) estimated Jurong Island emitted 27 million mt of CO2, equivalent to 54% of the country's total, in 2019.

That emissions total came as 71% of Singapore's power plant capacity, 69% of refining, and practically all petrochemical and chemical plants were on the island.

"Singapore's industry sector is heavily concentrated in refining and petrochemicals, which are highly integrated to improve their efficiency," the paper said. "This creates a unique opportunity for centralized post-combustion carbon capture and processing."

In its roadmap, the EDB said it will aim to realize at least 2 million mt of carbon capture capacity on Jurong Island by 2030.

Detailed project proposals were not provided, but the EDB promised to jointly plan the necessary infrastructure with JTC—another government agency tasked with industrial infrastructure development—to support the capture and transportation of carbon streams for utilization or storage.

Professor Hon-Chung Lau, lead author of the NUS paper, told Net-Zero Business Daily that Singapore can achieve emissions cuts in some hard-to-abate sectors by developing a CCUS hub.

For such a project, Singapore will be able to leverage on its close proximity to many oil and natural gas fields in neighboring countries and the robust marine, offshore, and pipeline industries at home, Lau added.

But Lau stressed that the government would need to hold discussions with other nations on potential storage sites. It is also uncertain who will fund the planned CCUS development, although some energy majors could be strong candidates.

ExxonMobil, which has a 592,000 b/d refinery on Jurong Island, has expressed interest in building CCS hubs across Southeast Asia.

Meanwhile, Shell recently said it is exploring a regional CCS hub targeting its clients, including power plants in Singapore. The company has chemical plants and oil refineries on Jurong and nearby Bukom Island.

State-owned Singapore LNG recently teamed up with Linde to explore the feasibility of developing a CO2 liquefaction and storage facility adjacent to its terminal on Jurong Island, which has an annual capacity of 11 million mt.

The EDB said its initial efforts will focus on researching and developing (R&D) technologies with high potential for capturing carbon from gaseous streams with a high CO2 concentration, and on exploring technologies that can sequester carbon from low-concentration streams directly.

The government-linked Agency for Science, Technology and Research, EDB, and JTC will work with some academic institutions, and major trading and energy firms to develop a testbed for CCUS technologies on Jurong Island.

Chevron, which owns half of a 290,000-b/d refinery on Jurong Island, has signed a memorandum of understanding with Keppel Data Centres, Pan-United, and Surbana Jurong to study cost-efficient CCUS technologies that are readily applicable.

Sustainable fuels and chemicals

The EDB has separately targeted raising the output of sustainable products like high-value specialty chemicals and materials, bio-based fuels and chemicals, pyrolysis oil from plastics recycling, and carbonated aggregates on the island.

Its goal is to increase their production by a multiple of 1.5 from 2019 levels by 2030 and quadruple output before 2050. No detailed figures have been provided, but Singapore's Minister for Trade and Industry Gan Kim Yong suggested Shell would be a contributor to the plan.

The major is building a 35,000 mt-per-year polyols unit on Jurong and a 50,000 mt/year pyrolysis oil upgrader on Bukom Island, both of which are scheduled to begin production in 2023. Polyols are the raw materials used in the manufacture of foams in furniture, bedding, and the automotive industry.

In parallel to its CCUS ambition, the EDB said it will seek to develop low-carbon projects that can convert CO2 to fuels and chemicals despite stiff challenges ahead.

"This pathway is heavily dependent on access to abundant low-cost, low-carbon hydrogen and is thermodynamically challenging, requiring significant R&D to overcome these barriers," the EDB said. "We will continue to explore options for this pathway and partner with companies looking to develop and test-bed technologies."

Currently, the EDB, Shimane University, and Sumitomo Chemical are undertaking a research project to synthesize methanol from CO2 on Jurong.

Among biofuel projects, Arkema is constructing a plant to produce chemical products from renewable castor beans. This is due to be commissioned in the first half of 2022.

Shell said it is planning a 550,000-mt/year biofuels plant in Singapore, which could convert used cooking oils and animal fats to hydrogen, sustainable aviation fuel (SAF), renewable diesel or chemicals, subject to a final investment decision. When contacted by Net-Zero Business Daily, the company declined to comment on the exact site location.

With Singapore the world's largest marine bunkering port and home to one of Asia's busiest airports, sustainable biofuels are expected to find some demand options at home.

In November, the Civil Aviation Authority of Singapore announced it will launch a pilot SAF program with Temasek and Singapore Airlines at Changi Airport next year.

Chapman cautioned that Singapore must tread carefully on this decarbonization pathway. "Biofuels have a role in decarbonization, but they need to be developed or sourced in a way that ensures long-term sustainability and carbon neutrality, while avoiding issues of food security or other social and environmental impacts," she said.

More effort needed

Singapore is well positioned to advance its climate ambitions because low-carbon project developers enjoy good access to finance and technologies, some experts said.

In 2019, the Monetary Authority of Singapore (MAS) established a $2-billion Green Investments Programme to promote decarbonization projects and mitigate climate risks. The central bank earlier this year allocated $1.8 billion to five asset managers for climate-related investments, but did not name them.

"Singapore has accelerated efforts to position itself as a green finance hub for the Southeast Asian region," Japanese investment bank Nomura said in a note. "MAS has shown a firm commitment to improving its investment capabilities in green products."

In KPMG's latest annual survey of tech leaders, Singapore was voted the top technology innovation hub outside the US' Silicon Valley. The country's research capability and patent law have enjoyed strong reputations.

But questions remain over whether Singapore has imposed enough punitive measures on big GHG emitters to move them forward as quickly as the country's plans envision.

Singapore has levied a carbon tax of S$5 ($3.65) per mt of CO2e on facilities emitting 25,000 mt or more since 2019. The tax is due to be reviewed by 2023, and the government has promised to hike it to between S$10/mt and S$15/mt by 2030.

In February, members of the Singaporean parliament's Committee for Sustainability and the Environment called for an increase to between S$75/mt and S$120/mt by 2040.

A higher rate can incentivize decarbonization investments. While Singapore principally does not ring-fence fiscal revenues for specific purposes, more carbon tax income can boost the government's resources in funding the low-carbon transition.

For example, Lau believes Singapore needs to have a substantially higher carbon tax to develop a CCUS hub. "Decarbonization is not free. The government of Singapore needs to provide substantial funding to incentivize companies," he said.

Separately, the EDB recognized the potential of clean hydrogen in decarbonizing Singapore's power sector, with gas accounting for nearly 96% of the generation mix in 2020. But Chapman said the government should do more in promoting Singapore as a hydrogen hub.

"The [roadmap] underestimates the potential for green hydrogen imports in future.… As many countries decarbonize their economies, the uptake of renewables and green hydrogen is likely to increase sharply, which could be the opportunity for Singapore to transform its economy," she said.

Future climate ambition

Climate Action Tracker (CAT), a coalition of climate analysts, said Singapore should contribute more to the global decarbonization efforts because the country can easily meet its interim target.

In addition, CAT estimated that Singapore's policy does not align with the Paris Agreement's goal in limiting global warming to well below 2 degrees Celsius. If all countries were to follow Singapore's approach, warming would exceed 4 degrees Celsius, CAT said.

"We hope Singapore will update its NDC in 2022… Singapore was already on track to substantially overachieve its very weak 2030 targets," Chapman said. "Under the Paris Agreement, governments universally agreed that successive NDCs should reflect a country's highest possible ambition."

World Wide Fund For Nature (WWF) also judged that Singapore's NDC has "some way to go" as more ambition was expected from a high-income country vulnerable to climate change. Sandeep Chamling Rai, a climate policy advisor for WWF-Singapore, said the nonprofit is optimistic that Singapore will show more ambitious climate commitments in its next NDC.

Having formed a climate partnership with the US to tackle environmental risk in August, the country has announced several decarbonization initiatives lately.

Aside from the Jurong emissions roadmap, the government plans to import up to 4 GW of low-carbon electricity by 2035, which is expected to account for 30% of national power supplies. This compares with around 3% in 2020.

The A$30 billion ($21.1 billion) Australia-Asia PowerLink, if it goes ahead, will begin transporting power from solar facilities via Darwin in the Northern Territory to Singapore in 2027.

IHS Markit Associate Director for Climate and Sustainability Joo Yeow Lee expects the proposed electricity imports to be followed by more CCUS deployment and hydrogen use.

"In the meantime, recent legislative changes have allowed the regulator to impose emission limits on the power sector, instead of relying solely on the carbon tax, while concurrently providing grants for them to improve efficiency," Lee said. "It is a phased approach Singapore is taking, and given this trajectory, Singapore can definitely be more aggressive in the future [NDC]."

Posted 06 December 2021 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability

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