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Lex Mundi Global Climate Change Guide

Singapore

(Asia Pacific) Firm Rajah & Tann Singapore LLP

Contributors Kala Anandarajah

Updated 07 May 2021
Has your country signed/ratified the Paris Agreement? If so, what is its INDC / NDC?

Yes, Singapore had signed the Paris Agreement on 22 April 2016 and ratified it on 21 September 2016.

Singapore’s NDC, which was updated on 31 March 2020, is an absolute emissions limitation target to peak its greenhouse gas (GHG) emissions at 65 MtCO2e around 2030. It is projected that this will allow Singapore to reduce its Emissions Intensity by 36% from 2005 levels by 2030.

What are the key national policy instruments regarding climate change and what are the national long term greenhouse gas emissions (GHG) reduction targets?

Singapore adopts a multi-faceted approach towards tackling climate change, making use of a range of policy instruments: 

  1. Legislation. Singapore has enacted legislation aimed at reducing emissions and increasing energy efficiency. For example, the Environmental Protection and Management Act (Cap. 94A) (EPMA) and its subsidiary legislation prescribe emissions limits, while the Carbon Pricing Act (No. 23 of 2018) (CPA) introduces a carbon tax to be levied on facilities whose emissions exceed the prescribed thresholds. The Energy Conservation Act (Cap. 92C) (ECA), in seeking to reduce carbon emissions, requires energy-intensive industrial businesses to adopt mandatory energy management practices and prescribes energy performance standards for certain industrial equipment and systems.
  2. Incentive schemes. The Singapore Government offers various schemes to incentivize greater energy efficiency (see responses to Questions: "Does national legislation regulate and/or subsidize carbon capture and storage (CCS)?” and “Are the production and/or use of renewable energy sources subject to a national subsidy or similar support scheme?"). Examples include the Green Mark Scheme providing incentives to increase the energy efficiency of building infrastructure, the Vehicular Emissions Scheme (VES) which offers rebates or imposes surcharges on vehicular ownership based on the vehicle’s level of carbon emissions, and the Energy Efficiency Fund that offsets industrial businesses’ costs in their energy efficiency efforts. (See responses to questions under Energy Efficiency category below)
  3. Green financing. The Monetary Authority of Singapore (MAS) has implemented a Sustainable Bond Grant Scheme where qualifying bond issuers may apply for subsidies to ascertain the green status of their bonds. Further, the Green Investments Programme (GIP), which is valued at US$2 billion, allows MAS to invest with asset managers with a track record of undertaking sustainable investments and a commitment to expanding green markets outside of Singapore. (See further policies in the response to Question: “What measures are national financial institutions (incl. banks, pension funds, asset management companies and insurance companies) aimed at reducing the GHG emissions of their customers?”)
  4. International cooperation: Singapore implements foreign policy as part of its climate change solution. For example, Singapore assists fellow Small Island Developing States on capacity building efforts in relation to sustainable development and climate change under its Singapore Cooperation Programme. Singapore also engages in multilateral environment cooperation through platforms such as the Sino-Singapore Tianjin Eco-City, the Asia-Pacific Economic Cooperation and the Association of Southeast Asian Nations. 

In February 2021, the Singapore Government unveiled the Singapore Green Plan 2030 (Green Plan), a national sustainability movement targeted at tackling climate change.  The Green Plan strengthens Singapore’s commitments under the United Nation’s 2030 Sustainable Development Agenda and Paris Agreement and positions Singapore to achieve its long-term net-zero emissions aspiration.

Have national policies or legislation been adopted limiting or prohibiting the use of certain fossil fuels (e.g. coal, natural gas, nuclear)?

While Singapore does not directly prohibit the use of any fossil fuel, there are regulations limiting the use of more pollutive types of fuels. For instance, under the Environmental Protection and Management (Vehicular Emissions) Regulations (Cap. 94A, Rg 6) (VER), vehicles are only allowed to run on diesel that conforms to the specified standards for diesel or petrol. In addition, where the emission limits are exceeded, the excessive use of fossil fuels in certain industries and sectors will be penalized under the relevant legislation regulating GHG emissions (See responses to questions under the Energy Efficiency category below.)

Separately, the Singapore government encourages the use of renewable energy. For instance:

  1. The Economic Development Board (EDB) and Housing Development Board (HDB) led the SolarNova program, which was launched in 2014, to accelerate the deployment of solar photovoltaic (PV) systems in Singapore.
  2. The EDB and the Public Utilities Board (PUB) launched a photovoltaic (PV) project in 2018 (for details, see the response to Question “What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the electricity production sector?").
  3. As part of the Singapore Green Plan 2030, the PUB seeks to generate sufficient solar energy from its floating solar panels to power 100% of Singapore’s waterworks by 2021.
What specific national climate change legislation has been adopted?

Singapore’s climate change measures are given effect through several legislations and the regulations respectively enacted under them. Key legislation includes:

  1. Environmental Protection and Management Act (Cap. 94A)
  2. Energy Conservation Act (Cap. 92C)
  3. Carbon Pricing Act (No. 23 of 2018) 
  4. Building Control Act (Cap. 29)
  5. Resource Sustainability Act (No. 29 of 2019)

(See responses to questions under Energy Efficiency category below)

Does your country participate in an international or national GHG emissions trading scheme?

At the international level, Singapore participates in the Clean Development Mechanism (CDM) set out in Article 12 of the Kyoto Protocol. The CDM allows countries with emissions caps or targets (i.e. industrialized countries) to implement emission-reducing projects in developing countries. Projects meeting the country’s sustainable development criteria will be awarded certified emissions reductions (CER) credit, each equivalent to one tonne of CO2 that can be traded and used by industrialized countries, thereby assisting them in complying with their commitments under the Kyoto Protocol. In Singapore, the CDM is administered by the National Environment Agency (NEA), which issues the requisite approval to support the registration of the CDM project under the Kyoto Protocol.

At the national level, Singapore has introduced a carbon tax on GHG emissions in 2019 (see the response to the Question “Has a national CO2 tax or similar instrument been adopted?"). Payment of the carbon tax is done through carbon credits purchased from NEA. While trading of carbon credits is not yet permitted, the Singapore government had indicated that the CPA was designed such that carbon credits trading can be introduced in the future.

Has a national CO2 tax or similar instrument been adopted?

Yes. Singapore imposes a carbon tax through the CPA, which entered into force on 1 January 2019. The CPA is applicable to prescribed industry sectors specified in the Carbon Pricing (Registration and General Matters) Regulations 2018 (S 858/018), which include manufacturing or manufacturing-related services, utility supply, as well as water, sewage and waste management services.

Under the CPA, any business facility which emits at least 2,000 tCO2e of reckonable GHG in any year is required to register as a reportable facility and is required to submit the NEA an annual emission report. The person who controls such a facility will also have to register as a registered person.

If in the same year, a facility emits at least 25,000 tCO2e of reckonable GHG, the said facility must be further registered as a taxable facility. Taxable facilities must pay the carbon tax levied on the reckonable GHG, with the prevailing carbon tax rate being set at S$5/tCO2e.  The carbon tax is to be paid through carbon credits purchased from the NEA at S$5 per credit. Further, a taxable facility is required to submit a monitoring plan to the NEA for approval, and that its emission report must be prepared based on the approved monitoring plan and verified by an accredited external auditor.

The current tax rate of S$5/tCO2e will be maintained until 2023. The Singapore government plans to increase it to between S$10/tCO2e and S$15/tCO2e by 2030, although this has yet to be finalized.

Does national legislation regulate and/or subsidize carbon capture and storage (CCS)?

Currently, there is no formal national legislation regulating CCS processes.

However, there are subsidies for CCS research and development. In October 2020, the Singapore Government announced a S$49 million Low-Carbon Energy Research Funding Initiative, which supports research, development and demonstration projects in various low-carbon technologies, including carbon capture, utilization and storage solutions. The funding initiative is aimed at accelerating such technologies to reduce Singapore’s carbon emissions.

Are the production and/or use of renewable energy sources subject to a national subsidy or similar support scheme?

The Singapore Government has indicated that subsidies such as Feed-in-Tariffs can distort the energy market and increase costs for consumers; instead, it seeks to make regulations to facilitate the entry of renewable energy and funds research and development in renewable energy.

For instance, EDB provides major funding for the Renewable Energy Integration Demonstrator-Singapore (REIDS) initiative which was launched in 2014. Under this platform, REIDS allows players to generate electricity through zero-carbon means, including solar and wind energy, and allows testbeds for the harvest, storage and integration of renewable energy sources, amongst others.

Another example is that of the Energy Market Authority (EMA) permitting residents and businesses to sell back the excess solar power generated from private solar photovoltaic systems if they (a) register under the relevant SP Services schemes; (b) register with the EMA as a Market Participant; or (c) appoint another Market Participants (not applicable for residents), thereby encouraging the adoption of solar energy.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the built environment?

These take the form of implementing mandatory standards and incentive schemes:

BCA Green Mark Scheme: The Building and Construction Authority (BCA) introduced the Green Mark Scheme in January 2005, which was intended to incentivize building designers and developers to increase the energy efficiency of their infrastructure. The target is to have ‘green’ buildings make up at least 80% of the buildings in Singapore by 2030.

The Green Mark Scheme is a green building rating system for tropics and sub-tropics and sets the benchmarks for environmental sustainability in buildings. Developers, building owners and government agencies can apply to join the Green Mark Scheme and obtain a certification. Buildings are rated based on criteria including energy efficiency, water efficiency, environmental protection, indoor environmental quality and other green, innovative features, as well as energy efficiency and the use of renewable energy. BCA also offers various Green Mark Incentives that offer incentives and funding to encourage a sustainable built environment. A new Green Mark 2021 framework that consolidates and streamlines existing Green Mark frameworks (e.g. GM NRB: 2015, GM RB:2016 and GM ENRB:2017) has been pilot launched in April 2021. The new framework covers 3 types of projects: (a) new developments at the design and completion (as built) stage, (b) existing buildings in operation with no previous Green Mark certification or (c) a building with major retrofit.

Mandatory Minimum Environmental Sustainability Standard: In line with the Green Mark Scheme, the Building Control (Environmental Sustainability) Regulations 2008 (Cap. 29, S 199/2008) was passed, under which all: (a) new buildings with a gross floor area (GFA) of 2,000 m2 or more; (b) additions or extensions to existing buildings with a GFA of 2,000 m2 or more; and (c) existing buildings with a GFA of 2,000 m2 or more that undergo major refitting, are required to adhere to a minimum environmental sustainability standard equivalent to the Green Mark Certified Level.

Existing buildings are subject to further regulations, including the submission of information to the regulator on e.g. energy efficiency audits and energy consumption, as well as the attainment of a minimum number of Green Mark Points, amongst other things.

Building Retrofit Energy Efficiency Financing (BREEF) Scheme: The BREEF Scheme was introduced in 2011 to help fund the upfront costs incurred for energy efficiency improvement works for owners of non-residential buildings in Singapore, amongst others. Such costs include the costs of equipment, installation and professional fees. The initial funding will be provided by the participating financial institutions, and will subsequently be paid off by the applicants through its energy savings.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the transport sector?

These take the form of implementing mandatory standards and incentive schemes, as well as making infrastructural changes:

Environmental Protection and Management (Vehicular Emissions) Regulations (VER): The VER controls the number of emissions generated from motor vehicles in Singapore. For example, the VER prescribes exhaust emissions standards (e.g. Euro 6 and JPN2018) on new and existing (in-use) motor vehicles in Singapore. Additionally, the VER regulates the standards of diesel or petrol used by motor vehicles. All diesel and petrol imported into Singapore must conform to the standards specified under the VER. There are also smoke opacity limits, as well as mandatory periodic vehicle inspections for road tax renewal.

Vehicular Emissions Scheme (VES): The VES was introduced in 2018 and encourages the use of cleaner car models, thereby reducing carbon emissions. Under the VES, vehicles are classified into different bands based on their worst-performing pollutants. Depending on the bands, drivers either benefit from emission rebates or are imposed with surcharges.

Land Transport Master Plan (LTMP) 2040: In May 2019, LTA launched the LTMP 2040 with the main goal of encouraging public transport use by creating 20-minute towns and 40-minute cities. The latest LTMP 2040 introduced a slew of new initiatives, including expanding the public transport infrastructure for the Mass Rapid Transit and buses, as well as having public transport vehicles use cleaner energy by 2040, amongst other things.

Plan for transition to hybrids and electronic vehicles: In February 2020, the Singapore Government announced the phase-out of vehicles with internal combustion engines (ICE) by 2040, in favor of cleaner alternatives such as hybrids and electronic vehicles. Hence, the registration of new diesel cars and taxis in Singapore will cease in 2025. From 2030, all-new car and taxi registrations must be of cleaner-energy models.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the industry?

These take the form of implementing taxes, mandatory standards and incentive schemes:

Carbon Tax: Under the CPA, industrial firms emitting at least 25,000 tCO2e of reckonable GHG are required to pay a carbon tax. The carbon tax is to be paid through carbon credits purchased from the NEA. At present, the carbon tax rate is S$5/tCO2e (see responses to questions in GHG Emission Trading Schemes above).

Mandatory Energy Management Practices: The ECA and its subsidiary legislation, the Energy Conservation (Energy Management Practices) Regulation 2013 (Cap. 92C, S 246/2012) require facilities in the relevant industry sector that consume at least 54 terajoules of energy annually to implement mandatory energy management practices, such as to:

  1. Appoint an energy manager
  2. Monitor and report energy use and greenhouse gas emissions annually
  3. Submit energy efficiency improvement plans on an annual basis

Additionally, existing facilities are to, as may be applicable, implement a structured Energy Management System by 2021 or 2022 and to conduct energy efficiency opportunities and periodic reviews. Prescribed new facilities and major expansion projects must carry out a design review to ensure that its facility is energy efficient, by conducting an energy efficiency opportunities assessment, amongst other things.

Minimum Energy Performance Standards for Industrial Equipment and Systems: Under the ECA, certain regulated goods can only be supplied if they conform to the minimum energy efficiency standards (MEPS) prescribed for those goods. This is to phase out inefficient models of common industrial equipment and systems and to encourage the use of energy-efficient models.

The regulated goods are specified in the Energy Conservation (Prescribed Regulated Goods) Order 2017, which broadly includes air-conditioners, clothes dryers, lamps, refrigerators, televisions, motors and ballast. Each of these goods is subject to separate prescribed requirements.

Incentives, grants and training: Apart from the legislative measures, there is a wide array of incentives, grants and training offered to help those in the industrial sector in their energy efficiency efforts, which include the following:

Energy Efficiency Fund, which co-funds businesses’ costs for (a) adopting more energy and resource-efficient designs; (b) carrying out energy audits; (c) investing in energy-efficient equipment or technologies; and (d) investing in energy management information system to enable the company to continuously plan, monitor and take steps to improve and/or maintain its energy performance.  

Singapore Certified Energy Manager Training, which aims to support professionals working in manufacturing facilities or those who provide energy consulting services to grow their skills and expertise. Grants of up to 70% of the training costs are offered.

Energy Efficiency National Partnership, which offers learning network activities, energy efficiency-related resources, incentives and recognition schemes that acknowledge efforts in adopting best practices in energy management.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in agriculture and land use?

As part of Singapore’s Green Plan 2030, the Government will enhance funding support to incentivize the agri-food industry to adopt highly productive, climate-resilient and resource-efficient farming technologies.

The Singapore Food Agency established a S$60 million Agri-Food Cluster Transformation (ACT) Fund which will be launched in 2021. Under the ACT Fund, farms can receive co-funding support to implement technology that make efficient use of resources such as water and energy and reduce pollution and waste.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the electricity production sector?

These take the form of Government-led initiatives to advance the use of solar energy, and implementing initiatives targeted directly at consumers:

SolarNova: The SolarNova program was launched in 2014 to aggregate demand and promote the use of solar energy across government agencies.

Floating Solar PV: As part of Singapore’s efforts to advance the use of solar energy, PUB and EDB announced plans to install large-scale floating PV systems on water bodies in October 2018. There are plans for building a 50 MVP floating solar PV system on a reservoir by 2021. In October 2019, PUB announced that it had awarded tenders for the building of two floating solar PV systems at other reservoirs. In August 2020, PUB announced the construction of a 60 MWp solar PV system on the Tengah reservoir.

New initiatives to facilitate more efficient usage of electricity by households: The EMA, Ministry of the Environment and Water Resources and SP Group introduced advanced electricity meters allowing households to monitor their electricity consumption on a half-hour rather than bi-monthly basis, amongst other things.

What measures are national financial institutions (incl. banks, pension funds, asset management companies and insurance companies) aimed at reducing the GHG emissions of their customers?

These take the form of incentive schemes and green products, as well as implementing reporting standards:

Monetary Authority of Singapore: As part of its Green Finance Action Plan, MAS has implemented a set of initiatives which include:

  1. Issuing a set of Environmental Risk Management Guidelines across the banking, insurance and asset management sectors, with the view of promoting new opportunities for green investment. The guidelines were published in December 2020.
  2. Establishing a Sustainable Bond Grant Scheme, which aims to encourage the issuance of green bonds in Singapore by offsetting up to S$100,000 for eligible green bonds. The scheme is valid until 31 May 2023.
  3. Establishing a Green and Sustainability-Linked Loans Grant Scheme (GSLS), which aims to support corporates in accessing financing for investments in green projects and move towards more sustainable business models. The GSLS defrays the costs of engaging sustainability advisory and assessment services under two tracks: (A) Green & Sustainability-Linked Loans, and (B) Green & Sustainability-Linked Loan Frameworks, each with different loan caps, qualifying criteria, etc.
  4. Launching a US$2 billion Green Investments Programme, involving asset managers who are committed to MAS’s green focus. In support of green finance, the MAS will also allocate US$100 million to the bank of International Settlements’ Green Bond Fund.
  5. Growing the capabilities in green finance through collaborations with Singapore universities, Asia Sustainable Finance Initiative and the International Finance Corporation. This includes, amongst other things, providing support to external reviews and rating agencies who are involved in green financing instruments and assist them in their expansion into Singapore, anchoring Centres of Excellence in Singapore, and facilitate the development of innovative green finance solutions in Singapore.

Singapore Exchange (SGX): In June 2016, SGX implemented sustainability reporting obligations on listed companies. All SGX-listed issuers are required to submit a sustainability report on an annual basis, starting from the financial year ending on 31 December 2017. The report must include the following:

  1. Material environmental, social and governance factors
  2. Policies, practices and performance
  3. Targets
  4. Sustainability reporting framework
  5. Board statement

In December 2020, SGX launched the new SGX FIRST (Future in Reshaping Sustainability Together) initiative, which is a multi-pronged expansion of SGX’s sustainability capabilities. This includes supporting the introduction of new Environment, Social and Governance (ESG)-focused products, services and platforms, including by:

  1. Providing ratings to demonstrate how well companies manage ESG issues most material to their businesses;
  2. Launching ESG derivatives; and
  3. Layering new sustainability benchmarks and ESG-related indices alongside existing flagship multi-factor indices.

Association of Banks in Singapore (ABS): The ABS released a set of Guidelines on Responsible Financing Practices in October 2015 (revised in 2018). These guidelines define the minimum standards on responsible standards on responsible financing practices to be integrated into the member banks’ and financial institutions’ business models. Specifically, Singapore’s three local banks – DBS, OCBC and UBS – have announced that they will stop financing new coal-fired power plants.

Are there prominent national climate change litigation cases in your country? If so please provide a short description (e.g. plaintiffs/defendants, public or civil law based, etc.).

No

Climate change policies, measures or legislation (other than those covered by the questions above)

As mentioned, the Singapore Government announced unveiled the Singapore Green Plan 2030 (Green Plan).  Key targets under the Green Plan are:

  1. Plant 1 million more trees;
  2. Quadruple solar energy deployment by 2025;
  3. Reduce waste sent to landfill by 30% by 2030;
  4. Make 20% of schools carbon neutral by 2030 (e.g. by piloting sustainability features in selected schools); and
  5. Make all newly registered cards cleaner-energy models from 2030.

Additionally, there are several other legislations that deal with the other aspects of climate change, such as waste control and management, which can contribute directly to climate change issues:

  1. Resource Sustainability Act (No. 29 of 2019) (RSA): The RSA was passed in September 2019 and entered into force in phases beginning January 2020. All provisions of the RSA are expected to be in force by 1 July 2021. The RSA regulates three priority waste streams, namely e-waste, food waste and packaging waste.
  2. Environmental Protection and Management Act (Cap. 94A) (EPMA): The EPMA deals with the transport and usage of waste to ensure that waste is properly managed and will not pose a risk to human health.
  3. Hazardous Waste (Control of Export, Import and Transit) Act (Cap. 122A) (HWA): The HWA deals with the export, import and transit of hazardous waste in accordance with the Basel Convention.

Lex Mundi Global Climate Change Guide

Singapore

(Asia Pacific) Firm Rajah & Tann Singapore LLP

Contributors Kala Anandarajah

Updated 07 May 2021