SINGAPORE: The Land Transport Authority (LTA) will be working with organisations to train and certify automotive technicians in the safety-related areas of electric vehicle (EV) maintenance and servicing.
LTA said on Monday (May 30) that the move is part of its efforts to upskill Singapore’s existing workforce in support of the adoption of electric vehicles and realisation of the Singapore Green Plan.
It signed a memorandum of understanding (MOU) on Monday with 21 organisations – comprising automotive industry partners, vehicle fleet owners, training providers and other government agencies – to develop training opportunities for new and existing automotive technicians.
“Under the MOU, the parties will identify a set of baseline competencies on safe handling of high voltage systems, as well as electrical troubleshooting and diagnostics,” said LTA.
“These competencies form the fundamental knowledge and skills in EV maintenance and repair, which technicians need to acquire before handling such vehicles.”
The transport authority will work with SkillsFuture Singapore (SSG) and training providers, such as the Institute of Technical Education (ITE) College West, Singapore Polytechnic and Ngee Ann Polytechnic, to develop and implement foundational training courses based on the list of identified competencies.
These training courses are expected to be available in the second half of this year. LTA will also work with SSG to provide baseline course fee subsidies of up to 70 per cent.
“As Singapore progresses towards 100 per cent cleaner-energy bus fleet by 2040, ensuring a steady pipeline of qualified professionals to support the public bus industry will help accelerate the transition towards more sustainable public transport modes,” said LTA.
NEW CERTIFICATION PROGRAMME
A new national-level certification programme will be established to recognise automotive technicians who have completed these courses and successfully attain the required competencies, said LTA.
The certification, recognised by all the parties in the MOU, will allow technicians to subsequently take further specialised training in EV maintenance.
LTA said it would also work with SSG and Workforce Singapore (WSG) to reskill new and existing automotive technicians to taken on roles in this field.
This will be done through programmes such as SSG’s SkillsFuture Career Transition Programme and WSG’s Career Conversion Programme (CCP) scheme. Under the CCP, eligible companies or participants may receive salary support for the training duration.
The transport authority said it is also taking steps to train and certify technicians in the maintenance of cleaner-energy buses within the public transport sector.
“To prepare our workforce for the transition, LTA signed an MOU (on Monday) with ITE to designate ITE College West as Singapore Bus Academy’s second satellite assessment centre. Republic Polytechnic was appointed as the first satellite centre in January this year.”
Bus technicians from the four public bus operators can tap on the two satellite assessment centres for training and assessment of technicians in the maintenance and servicing of electric and hybrid buses.
A joint certificate issued by LTA and the Institution of Engineers, Singapore (IES) will be awarded to those who have passed the technical competency assessment under IES’ national chartership scheme for technicians.
In his Budget speech, Finance Minister Lawrence Wong said that the increase in carbon tax will help Singapore to “move decisively” in achieving its new ambition of achieving net zero emissions by around the mid-century. Image: TODAY/Ili Nadhirah Mansor
Singapore will raise its carbon tax five-fold in 2024, and more in subsequent years
The rise brings Singapore to a “respectable” level on carbon tax globally, say experts
While the carbon tax is effective, it must be implemented alongside other policies that support a transition to a green economy, they say
They warn that companies may pass on higher operating costs to consumers if carbon tax is raised without any alternatives for renewable technology
Environmentalists suggest requiring companies to have a certain percentage of renewable energy in their operations or scale up solar energy deployment as some other ways to spur sustainability
SINGAPORE: Back in 2019, when Singaore became the first Southeast Asian country to implement a carbon tax — touted as a cost-effective way to combat global warming — many viewed the rate of S$5 per tonne of carbon emissions as too low.
The rate, which currently covers facilities producing about 80 per cent of Singapore’s total carbon emissions, puts the island at the bottom of the carbon tax ladder, far below other countries such as Sweden (S$186) and Switzerland (S$137.55). The low rate is meant to give businesses time to adjust to a carbon tax, the Singapore authorities had said.
Still, the rate is “alarmingly insufficient and meagre” when compared with global recommendations of S$100 by 2030 for advanced economies, said Mr Shawn Ang, a 23-year-old undergraduate and spokesperson for Students for a Fossil Free Future (S4F), a coalition championing the elimination of fossil fuels.
“Such a low rate indicates policy inertia and has been extremely inconsistent with Singapore’s ambitions to reach net zero, which was previously targeted for ‘as soon as viable’,” added the third-year environmental science and political science undergraduate from Nanyang Technological University (NTU).
However, the impending hike in carbon tax, which will be raised to a more “respectable level” of S$25 per tonne in 2024 and even higher in subsequent years, will give Singapore a seat alongside serious carbon tax users, said Dr Vinod Thomas, a visiting professor at National University of Singapore’s (NUS) Lee Kuan Yew School of Public Policy.
Dr Thomas is also an economist and former World Bank vice-president, who oversaw the organisation’s flagship reports on climate and the environment.
The tax will be further increased progressively to S$45 per tonne in 2026, with a view to reach S$50 to S$80 per tonne by 2030.
The higher rates — which were announced during the Budget statement in Parliament on Feb 18 — were welcomed by S4F and other environmentalists, such as SG Climate Rally, a youth-led movement for climate justice.
However, they noted that even with the progressive hikes, the carbon tax rate will still remain below the global benchmark recommended for advanced economies.
“This announcement has given us renewed hope and faith that collectively, Singapore is prepared to do what it takes, and what is right to mitigate climate change even if it comes at short-term costs,” said Mr Ang.
In his Budget speech, Finance Minister Lawrence Wong said that the increase will help Singapore to “move decisively” in achieving its new ambition of achieving net zero emissions by around the mid-century.
Previously, Singapore had aimed to halve its emissions by 2050, before reducing to net zero in the second half of the century.
Ms Melissa Low, a research fellow at NUS’ Energy Studies Institute, pointed to public sentiment as one possible reason why the Government raised the carbon tax beyond its initial indication of between S$10 and S$15 per tonne by 2030.
“I think the Government is hearing a lot from stakeholders, including young people and Members of Parliament (MP), on increasing the tax … Maybe the many engagements on the Singapore Green Plan indicated to the Government that we need higher carbon tax, if not things won’t move,” she said.
The Green Plan is a “whole-of-nation movement” charting Singapore’s green targets until 2030.
Ms Grace Fu, the Minister for Sustainability and the Environment, said that the hike is meant to send a signal to companies that carbon emissions have an explicit cost on the environment.
They will now find it worthwhile to adopt sustainable measures to reduce their carbon tax, she said during a forum at the Singapore University of Social Sciences (SUSS) on Feb 19.
While many view the impending hike in carbon tax as unavoidable, given the intensified concerns over climate change in recent years, some observers pointed out that consumers and businesses may feel the pinch in the form of higher prices and costs.
With carbon tax here to stay and rise further, we look at how effective it is, who bears the brunt of the tax, and what else needs to be done to move the needle on carbon emissions.
How carbon tax became a global movement
About three decades after Finland became the first country to introduce the carbon tax in 1990, about 30 other countries had implemented a carbon tax system nationwide as of last year, according to data from the World Bank.
The taxes levied by the different countries, in total, covered 2.93 gigatonnes of carbon dioxide equivalent and represented 5.4 per cent of global greenhouse gas emissions for last year.
The carbon tax is one of two popular carbon pricing mechanisms adopted globally.
The other is the cap-and-trade system which places a limit on the total level of greenhouse gas emissions that emitters can release. Those with lower emissions can sell their extra allowances, or carbon credits, to bigger emitters.
According to the World Bank’s online carbon pricing dashboard, 45 national jurisdictions and 34 subnational jurisdictions are using carbon pricing mechanisms, covering about 20 per cent of global greenhouse gas emissions for last year.
Internationally, there has been a greater push for countries to adopt carbon pricing mechanisms as a proxy to reduce carbon emissions, given that they are the most direct way to incentivise emitters to reduce their emissions.
Last July, the Group of 20 (G20) countries recognised carbon pricing, which includes carbon taxes, as a potential tool to address climate change for the first time, including its mention in an official communique following a meeting by G20 finance ministers in Italy.
The International Monetary Fund (IMF) also proposed last year that countries implement a tiered system of carbon pricing based on their income levels by 2030.
Advanced economies should charge US$75 (S$100) per tonne of emissions, high-income emerging-market economies should charge US$50 per tonne of emissions, while lower-income emerging markets should charge US$25 by the coming decade.
These rates will bring emissions in line with keeping global warming below 2 degrees Celsius as targeted by the 2015 Paris Agreement on climate change, said the IMF.
The case for carbon tax
As nations scramble to fight climate change, carbon tax is expected to incentivise companies to reduce their use of fossil fuels — which release large amounts of carbon dioxide when burned — to avoid paying taxes and turn to renewable energy, said experts.
It is the “most direct and efficient way to price air”, said Dr Thomas. It also provides a substantial source of revenue to be invested in renewable energy, he added.
Nevertheless, the effectiveness of carbon tax is contingent on its rate, which must be high enough to incentivise companies; the time period given for industries to adapt to the tax; and the availability of green technology for industries to tap, said experts.
Dr Thomas said that the experience of other countries has shown that a strong reduction in emissions typically kicks in when the rate goes beyond S$25.
He suggested that Singapore bring forward the revised rates to the mid-2020s rather than 2030, given the “very immediate” cost of climate change such as sea level rise and weather changes.
Professor Euston Quah, who specialises in environmental economics at NTU, however, argued for adjustments to the carbon tax to be spread out over a longer time period, beyond 2030.
He pointed to the constraints facing Singapore in switching to renewable energy. The use of solar energy, for instance, is hampered by limited space, while tapping energy sources through an international grid or pipeline would present energy security issues.
A longer runway with fewer drastic increases in carbon tax prices would give companies time to adjust to the changes, said Prof Quah, who is the Albert Winsemius Chair Professor of Economics.
What companies are doing
Big emitters which are subject to the carbon tax said that they have already implemented various decarbonisation measures to reduce their emissions over the last decade.
Ms Geraldine Chin, the chairman and managing director of petroleum company ExxonMobil Asia Pacific, said that the firm has introduced a series of initiatives since 2002, which have led to energy efficiency gains of more than 25 per cent and reduced the carbon emissions of its Singapore facility.
These initiatives include the operation of three cogeneration facilities that produce both electricity and steam concurrently. Cogeneration recovers heat energy after electricity is generated to produce steam.
The steam is then used for ExxonMobil’s plant operations in Singapore. This process requires less fuel and emits less carbon than if the steam and electricity were produced separately.
Ms Chin said that its Singapore team is also working to develop a detailed emissions-reduction road map to bring the company’s ambition to achieve net-zero greenhouse gas emissions from its operated assets by 2050 to fruition.
She added that ExxonMobil has long supported an explicit price on carbon and added that a stronger carbon price signal from the Government encourages investments in greenhouse gas reduction.
However, given Singapore’s open economy, it is also important that the carbon tax framework safeguards the competitiveness of trade-exposed industries. They are competing with other industrial facilities globally that have either no, or a lower price on carbon domestically or on their exports, said Ms Chin.
German chemical company Evonik, whose headquarters for its Southeast Asia, Australia and New Zealand operations is in Singapore, said that it also takes climate and environmental protection “extremely seriously”.
Among its efforts to reduce its emissions is a made-to-order power supply solution on its methionine plant on Jurong Island, which gives its complex control over energy management and maximises power efficiency to reduce carbon emissions.
Evonik said that it is not worried about the potential impact of carbon tax on its operations as it continuously looks for ways to make its processes more sustainable.
Small and medium-sized (SME) companies which are not subject to carbon tax have also taken pains to reduce their energy use, partly spurred by rising business costs, and in the process do their part to reduce their carbon footprint.
Precision engineering company Certact Engineering has been looking for ways to reduce its energy consumption and lower its operational costs ever since its sales took a hit during heightened trade tensions between the United States and China four years ago.
The company’s finance manager, Mr Daryl Chia, said that the company has installed industrial fans in its production site at Kian Teck Drive in Jurong, so that it can switch off air-conditioners during cooler periods of the day and reduce electricity consumption.
The company has also installed 258 solar panels on the rooftop of its production facility. The energy generated from the panels provides about 20 per cent of its monthly electricity usage of 85,480kWH per month, said Mr Chia.
Based on the current rate of 18 cents per kWH, Mr Chia said that the solar panels help the company save S$3,077 monthly.
The company does not track its carbon emissions as it does not know how to do so. Nevertheless, it is “constantly on the lookout” for hardware or methods to save electricity and energy, he said.
Another SME, Kawarin, was also partly spurred by a desire to cut costs when adopting sustainable efforts in its operations.
Among other things, the steel servicing company reuses the wooden timbre pallets that come with its steel imports to package its own products. A team of workers will remove the nails from the pallets and customise them to suit the different sizes of Kawarin’s own products. It also uses the wrapping paper from its imports for its own products.
Kawarin’s managing director Ken Lin said the company started such cost-saving efforts about a decade ago when energy costs began to rise.
“The (steel servicing) market opened up and became more competitive 10 years ago. So we needed to think about how to cut costs from various angles and also, in a way, save energy.”
Eng Hup Shipping, which provides vessel chartering and shipyard services for business across Asia, said that it started its decarbonisation journey three years ago after it observed an increasing demand for low-emission vessels by its clients.
The company participated in the LowCarbonSG Programme offered by Global Compact Network Singapore (GCNS) last year, which provides tools for companies to monitor and reduce their emissions where possible.
GCNS is the Singapore chapter of a United Nations initiative which encourages businesses worldwide to adopt sustainable practices.
The shipping company’s head of corporate services, Ms Lyn Phun Yi Ying, said that it has consolidated multiple individual trips into an optimised route to lower its fuel usage and carbon emissions.
It also moderates the speed of its vessels to reduce energy usage.
“Different engine models have their respective performance curves. Hence, in order to maximise the efficiency of the engines to reduce fuel consumption, we ensure that the captain of our vessel, as much as possible, operates their assigned vessel closest to its most efficient speed,” said Ms Phun.
These efforts have allowed it to cut its carbon footprint by up to 10 per cent.
She added that while the company is not affected by the carbon tax, it serves larger corporations which may have to pay the tax.
Thus, Eng Hup Shipping is trying to reduce its emissions so that it can help decrease the supply chain carbon footprint of its clients. This will be beneficial to the latter if indirect emissions, which occur in a company’s value chain, are subject to carbon tax in future, said Ms Phun.
Will consumers bear the cost?
But even as smaller companies are going green to reduce their operational expenses, the carbon tax is expected to raise such costs for big emitters.
If big emitters generate their own energy with fossil fuels, higher operational costs can come in the form of higher tax if they do not switch to alternative sources of energy which are untaxed.
Carbon intensive sectors, such as power generation companies (gencos), will also feel the squeeze from a higher carbon tax. More than 95 per cent of Singapore’s electricity is now generated by natural gas, a form of fossil fuel.
Facilities in other sectors will indirectly face a carbon price on the electricity they consume as well, as gencos are expected to pass on some degree of their own tax burden through increased electricity tariffs.
Finance Minister Wong had said that the S$25 carbon tax per tonne of emissions will lead to an increase of about S$4 per month in utility bills for an average household living in a four-room Housing and Development Board flat, though additional rebates in the form of GST Vouchers will be provided to cushion the impact.
Prof Quah said that if companies are unable to adapt quickly to the carbon tax by adopting decarbonisation technology, the tax hikes may end up driving inflation.
For example, gencos facing higher production costs may pass them on to retailers, who may eventually pass them on to households. Other expenses such as retail, food and transport may also go up due to higher electricity bills.
The extent of cost increases will depend on the tax incidence, or how the tax is shared among different parties such as the gencos, retailers and consumers, said Prof Quah.
“If the gencos have to pay a higher carbon tax, it means they will have a higher cost of production and operation,” he added. “The question is whether the gencos can pass this (higher cost) to the (electricity) retailer who buys from (them). That, in turn, depends on how much these (electricity) retailers can pass on to the retail firms in the market to the households.”
Prof Quah said that household electricity bills, for example, will go up if residents do not cut back on their utility usage. While households are largely dependent on electricity and will have to pay the increase in prices, the estimated increase of S$4 a month is “very low”, he added.
Prof Quah felt that consumers will be able to adjust their behaviour and cut back on expenditure for other goods and services such as recreation and food.
This means that households will be able to cope with the higher carbon tax “quite comfortably” as they adapt and reduce their energy use and consumption. However, businesses which are unable to pass the cost on to customers will be hurt, said Prof Quah.
Nevertheless, Ms Low from the NUS Energy Studies Institute expressed concern whether households will be able to cope with the trickle-down effect of the carbon tax, alongside other cost increases such as the higher Goods and Services Tax that will kick in next year.
She said it is yet unclear if consumers will be able to adjust their behaviour and reduce their energy usage. She noted that household appliances which consume the most energy, such as washing machines or refrigerators, are only replaced with more efficient models when existing ones are worn out.
To reduce their energy use, consumers may simply transfer their consumption of electricity outside of the household. For example, to reduce their utility bill, they may choose to charge their mobile phones at their offices instead of homes, defeating the underlying intent of the carbon tax which is to encourage a reduction in energy use.
Consumers we spoke to said that they do not intend to reduce their electricity usage, as the expected increase for utilities was not significant.
“The additional S$4 to the overall cost of the bill is not much and it doesn’t really bother me. I may use less electricity but I won’t go out of my way to reduce my consumption,” said Mr Sivakumar Balamurugan, a 33-year-old marketing manager.
In response to queries, genco Senoko Energy said that with the impending increase in carbon tax, it will continue to explore efficiency upgrades and improve the efficiency of its existing power plants that can further reduce carbon emissions.
Senoko Energy chief executive officer Graeme York said that for his company, “replacing power generation fleet even with the most modern gas turbines would only reduce emissions by 10 per cent”.
Deep emissions reductions can only come from tapping other energy supplies such as solar, regional power grids and low-carbon alternatives, he said.
On the potential impact on energy costs, he added that Senoko Energy is committed to offering competitive prices and to meet the energy needs of businesses and consumers through sustainable and innovative solutions.
Utilities company SP Group, in response to queries, said that it does not generate electricity nor have a retail licence to offer different price plans to customers.
Its spokesperson said that the company offers customers the regulated tariff rate by the Energy Market Authority (EMA) to reflect the actual cost of electricity. A large percentage of the cost of tariff is fuel cost, which is paid to the gencos and reflects the cost of fuel and power generation.
Nevertheless, SP Group said it offers a range of sustainable energy solutions to its customers to lower their energy consumption and carbon emissions.
For example, it offers a carbon footprint calculator on its SP Utilities App to allow customers to track carbon emissions from daily activities.
It is also planning to retrofit several buildings in Tampines central with a distributed district cooling system, which will generate and distribute chilled water to these buildings, to reduce electricity consumption.
In a webpage on frequently asked questions about the carbon tax posted since 2019, NCCS addressed the concern of how the Government would ensure that consumers are not over-charged by electricity retailers passing on more than 100 per cent of the carbon tax to them.
NCCS said that the competitive electricity retail market discourages retailers from raising their electricity rates excessively.
Nevertheless, the EMA will continue to ensure fair and efficient conduct of market players, said NCCS.
In its response to questions on additional safeguards in place to protect consumers, NCCS said that the carbon tax revenue will be used by the Government to cushion the impact of the increase in utility costs for households, such as through additional U-Save rebates for lower and middle-income households.
Government’s efforts aside, experts and environmentalists interviewed had other suggestions on how to mitigate the impact of businesses passing down the cost of carbon tax to consumers.
SG Climate Rally said that price controls could be imposed on essential items such as household goods, medication and utilities, while Dr Thomas suggested that the Government invest heavily in renewables so that companies can switch to non-taxable forms of energy.
Going beyond carbon tax
Although carbon tax is viewed as key to fighting climate change, it can only be effective if accompanied by other policies that support decarbonisation efforts, experts said. Other stakeholders, such as businesses and individuals, also need to take action to be greener.
Beyond carbon tax, Dr Thomas said that installing more charging points will help increase the adoption of Electric Vehicles, regarded as transportation’s answer to reducing climate change emissions; while the plan for Singapore to quadruple its solar deployment to at least 2 gigawatt-peak (GWp) by 2030 can be scaled up.
SG Climate Rally suggested that large emitters be required to produce a certain percentage of renewable energy in their operations.
Ms Woo Qiyun, 25, who runs the Instagram account The Weird and Wild to educate readers on environmental policy, suggested more robust sustainability reporting so that the environmental impact of corporations will be more visible.
“Public accountability can be one lever to push for emissions reductions. Transparency, traceability and clarity of their disclosed emissions, carbon tax liabilities and the use of offsets would be key markers for observers to assess corporations’ progress in emissions reduction,” she said.
Mr Ang of S4F said that while the latest announcements on the carbon tax gives the student coalition “renewed hope” that Singapore is “prepared to do what it takes” for climate change, Singapore can push further.
Said Mr Ang: “We believe that Singapore, being well-resourced…and being a leader in many industries, technologies and intergovernmental spaces, can and must do more than it currently is, to do our fair share for the world and for our collective futures.”
Tan See Leng, Minister for Manpower and Second Minister for Trade and Industry
Linus Goh, Head, Global Commercial Banking, OCBC Bank
Moderator: Lee U-Wen, Deputy News Editor, The Business Times
The following is an edited excerpt of the dialogue.
BT: Finance Minister Lawrence Wong delivered his maiden Budget speech in Parliament last Friday – a very bold and expansionary Budget, which he says is a first step in renewing and strengthening our social compact for a post-pandemic world. What are your main takeaways from the speech?
Tan See Leng: I think it’s a very balanced Budget, one that is also very progressive . . . and a very good step forward in terms of really strengthening and renewing our social compact.
It is aimed at making sure that as we recover from this particular pandemic, we go into a new phase where we now look at how to fortify our resilience and to be able to sustain it over the longer run.
Linus Goh: In the last 2 years, businesses were forced into change in a big way. I think the signal is that going forward, there is a need to take advantage of that position and to try to capitalise on the opportunities for growth. But at the same time, there was a point about inclusion, about a more sustainable future. And so I think it’s not all about business, it’s also the role that businesses have in the broader society.
BT: Climate change and sustainability will once again be key issues for businesses this year, but many will still be preoccupied with short-term issues and surviving the crisis. What can be done to focus them on the need to build sustainable businesses as well as adopt environmentally-friendly practices?
Dr Tan: This transition is something that we have planned since we introduced the Singapore Green Plan 2030.
The fact that we are now moving to a new phase, where we signal our pricing of the carbon tax, actually signals to the world that we will be embarking on a sustained trajectory to achieving our net-zero emission (target) some time in the second half of this century itself.
How we calibrated and phased in the carbon tax is a reflection of the understanding of what needs to be done in helping companies: giving them time to phase in the transition to more energy-efficient processes and equipment.
There will obviously be a lot of opportunities as well in the green economy globally; there’ll be millions of jobs created.
I think (for) OCBC, being at the forefront of funding, financing and so on, there will be tremendous opportunities in the green financing space, the issuance of green bonds.
(The greening of) our traditional sectors . . . would also put us in good stead to offer those opportunities for many of our Singapore workers.
BT: On the carbon tax, take us through how the discussions were reached to arrive at the phased increase up to 2030 – because Singapore will be a trailblazer in Asia, and other countries are looking to us to see how we implement it, and what the impact is.
Dr Tan: There’s a cost to getting our businesses and our people to be familiar with embarking on all these renewable technologies. The setting of the carbon tax allows us to, in a graduated manner, get people adjusted to the cadence and to adopting and adapting energy conservation as a way of life.
And then to see how we can actually pivot into using more energy-efficient appliances, to even using sustainable, greener development methods in terms of construction of our buildings, employment of natural ventilation, and so on.
BT: In the last couple of years, has OCBC seen more interest from companies in sustainable financing? Beyond financing itself, what else do you think can be done to help our businesses transition towards greater sustainability?
Goh: Before, it used to be that going green was about doing good for society. It wasn’t necessarily immediately good for business. But I think particularly in the last 2 years or so – in coping with the whole disruption to the supply chain, having to engage with new buyers and suppliers – the recognition that it was good for business became a lot more clear.
And so we have seen many companies jump forward, embrace sustainability, because it provides them differentiation and because it gets them the contracts.
We launched the OCBC SME Sustainable Finance Framework just at the tail-end of 2020. In one year, we had a very strong response, even from the smaller businesses – several hundred of them jumping to take a green loan.
We do see that the SMEs are signalling in a very strong way. Because many of them, themselves, are the change agents.
They are the enablers. They are the ones who are providing the R&D, the consulting, the services in climate change, in carbon, in energy efficiency, so they are helping even bigger companies like us to make that shift.
BT: With the greening of traditional sectors and emerging sectors like green finance, there will be a global demand for more talent. How can we better position our workforce to capture all these opportunities?
Dr Tan: That is also one of the initiatives that we’re pursuing with the Ministry of Education (MOE). This green transition would create millions of jobs globally. It’s going to be a very exciting space to be in.
So to keep pace with it, and in fact to actually leapfrog and move ahead… we are now working with the institutions of higher learning, in terms of courses for sustainability: not just environmental sustainability, but greening; employment of cleaner energy types – for instance, hydrogen; carbon capture, utilisation and storage…
BT: Linus, from the bank’s perspective, are you looking for new kinds of skills and talent to come in, and how challenging is that?
Goh: The content of green industry in our clients, and therefore in our jobs, is also (increasing) at a fairly rapid pace. So we need to build up competencies to be relevant to that transition. In doing that, you’re also signalling what sort of role you will be hiring for, and therefore I think that dovetails very nicely with new competencies that come up from the schools.
Dr Tan: While we grow our own timber, in the short term – in terms of giving us that push – it’s also about bringing in complementary talent. Many of the OECD countries are ahead of us.
So the key thing is bringing these talented people here to complement in terms of the teaching, the transferring of skillsets and technology to our locals – and at the same time, also having an overseas global attachment scheme for our own talent. When they come back, they can then set up the whole process.
That’s really what we intend to do with the Employment Pass framework, which focuses on making sure that . . . the high-calibre, diverse talent that we bring in here can actually complement our workforce, nudge them, motivate them and also train them and to bring them to the next level.
Likewise with the S Pass, we want to make sure that the right quality with the right proportions is coming in, to complement . . . and make sure that we win this competition collectively.
BT: For businesses, the upcoming tax changes and refinements to foreign worker policies translate to higher costs. How do you see this having an impact on Singapore’s overall competitiveness and attractiveness as a hub?
Dr Tan: First, not only was this a very balanced budget, I think it’s also quite expansionary. And at the same time, it’s progressive . . . This renews and strengthens the social compact . . . It allows us to fortify that togetherness and how we can overcome future crises together. And I think that allows Singapore to become an even more attractive magnet global city to attract even more talent, even more people who are financially able to come here to invest and build together. That’s the first broad encompassing part.
Now, if you look at the cost structure, that appears to be rising – rightfully so. But as the costs move, the value-addedness, the productivity will also improve, and will increase pari passu with the increase in the cost structure.
What is also comforting is that the government will not hesitate to implement all kinds of support measures necessary. So for instance, with the Progressive Wage Model, the government has come up with a Progressive Wage Credit scheme to help to offset that process of transition. For businesses, we have productivity solutions grants, company training committees . . . temporary bridging loans . . . So you’ve got all these contemporaneous measures to support them, to manage some of these costs. That is the third part.
Then the fourth part is taking care of the employees themselves, making sure that they’re given the impetus to upgrade their skills.
Then there is the last bit, which is retirement adequacy. We are nudging our workers to continue to work longer; they can always retire any time they want to, but we offer them the opportunity to be able to extend their productive longevity. So multiple measures are in place.
BT: As travel opens up and borders start to reopen, do you see that companies still have that desire to expand overseas?
Goh: Even though businesses have – along with the rest of us – gotten used to no travel or less travel in the past 2 years, I think the reality is that travel and connecting with overseas markets is a must. I think there is a pent-up demand, a feeling of anticipation to be able to reconnect.
I know that there are many businesses who have been able to connect well digitally.
But I think they will be the first to recognise that if you are seeking new customers, seeking new partners, opening up new markets, you have no choice but to be there physically.
You spoke about Singapore being a competitive hub. I think the script is now quite different, because the whole world has been so changed in the past two years that in a way you have the opportunity to reset what it means to be a hub.
I think that the firms who are at the leading edge have found that they have become much more international by being digital. So being connected to suppliers in a much more intimate way, having good just-in-time visibility of data to be able to predict future patterns – I think that really connects them in a much bigger way.
Dr Tan: We have got quite a number of good things going for us. We have a very stable operating environment, clear open processes, strong rule of law; our intellectual property rights protection is very high. Our openness, our connectivity with the centres of the world – I think it all puts us in good stead.
We have one of the highest vaccination rates in the world. I think you can see that we’re now moving to a more nuanced opening up of our borders. Like what Linus said, we also hope to see a resumption of travel.
I think at the end of the day, the trust, the social compact is most important . . . And for international investors, these are actually very important, critical success factors for them to want to plant their FDIs (foreign direct investments) here.
BT:What are your thoughts on the pace of digital transformation?
Goh: I think it goes without saying now, after two years, that we can also thank Covid for lifting the overall standards of digitalisation. We certainly have seen that in the SMEs and businesses: a significant shift towards adoption of technology, of digital tools to enable them to operate in a more effective way.
But I think it would be a pity if we stopped now and said, with the reopening: “We’ve done the digital thing, and that was for when we couldn’t travel, when we couldn’t come to work, and out of necessity we had to adopt those tools.”
I think it would be a shame, and I am encouraged to see that that’s not the case – the businesses are indeed continuing on the journey.
We already see in the second year of the pandemic that there’s a differentiation. Those who are much more ambitious with their digital plans and outcomes – we track the performance of those companies, (and) they outstrip the non-digital or the less digital by easily four times their sales performance.
So I think it’s becoming clear that if you see through that process to realise the benefits of becoming digital, it gets you to be a more progressive, successful business.
We also noticed that Singapore businesses have pivoted in a faster way and perhaps more comprehensive way than some of their peers in the region. I think that when we talk about regional roles, many of the SMEs and the companies here… can also play a more influential role in the overall emergence of the economies in the region.
Dr Tan: I think that we always think of the adoption of technology or digitalisation in a linear or curved manner, but in actual fact it is quite staccato, because sometimes you get an external shock, like Covid-19 or other externalities.
We move, we evolve, and suddenly a shock comes in and you reset higher; then you start from a different base, a higher base, and then you move along that. For something like Covid that has not just nudged but shoved everyone in a particular manner, I don’t think it’s possible for anyone to backtrack.
Now most meetings are conducted on Skype, on Zoom, on Microsoft Teams; I think that has actually reset itself to a new cadence in terms of how companies operate.
Improvements in terms of data analytics and artificial intelligence mean that businesses look at consumers from a very “compound” eye. Multiple facets of preferences can be gleaned and therefore (firms) can come up with new strategies in terms of business development and marketing, to have better reach and a more precise, targeted approach to the consumer.
There will be a lot more automation, deep tech, trying to be predictive and pre-emptive before the problem actually comes up, so that you can take preventive maintenance and so on – I think will be the order of the day.
BT:We are now entering the third year of the pandemic. As you look back on how Singapore and Singaporeans have gone through this crisis together, what’s your overall take on how ready we are to emerge stronger in this post-pandemic environment?
Goh: My own view is that we should just get on with it. I think we have talked about it enough. We’ve probably over-analysed it, we’ve over-assessed all the different options and variations. I think we can be confident that we – as an economy, as a country and as businesses – have handled it relatively well and the opportunities are out there to be seized. So we should just get on with it and move on.
Dr Tan: I think the one thing that really stood out was the indomitable spirit, the tenacity, the resilience of the Singaporean, the Singaporean employee, the Singaporean employer; the entire social construct and the social compact that we have as a nation.
We are seeing some light at the end of the tunnel. We don’t know how it’s going to evolve. But I think thus far, with all the combined support of everyone… I think we should really have reason to be of good cheer, of good spirit, and hope springs eternal.
SINGAPORE: The Ministry of Transport and the Civil Aviation Authority of Singapore (CAAS) have started to put in place “building blocks” for a sustainable air hub, as Singapore revives air travel in the coming years, said CAAS on Tuesday (Feb 15).
With sustainability “a key priority for Singapore’s aviation sector”, the CAAS will engage industry stakeholders to “canvass ideas and develop practical pathways to make greener air travel viable and accessible for all”.
It has also set up a 20-member International Advisory Panel, CAAS added in a press release.
“Pre-COVID, global aviation contributed about two per cent of global emissions. And once aviation resumes in the trajectory it was before the pandemic, then you must expect the emissions will continue to rise unless we do something about it,” said Minister for Transport and Minister-in-charge of Trade Relations, S Iswaran.
“For Singapore, we are a major international aviation hub. On one hand, sustainability of our air hub is a high priority. At the same time, we’re very committed to doing our part towards sustainability of the global international aviation system.”
Blueprint For Air Hub, Economic Viability a Priority
Mr Iswaran added that there is a need to bring all this together in an “over-arching framework for the long term”, in the form of a sustainable air hub blueprint that will chart the pathways for achieving targets.
The blueprint for the air hub is expected to be ready in early 2023, “given the urgency and the need to act decisively”, he said.
“(The blueprint) will set medium-term (2030) and longer-term (2050) sustainability goals and identify practical, tangible pathways to achieve them. It will focus on the three key areas of airport, airline, and air traffic management, bringing together the various stakeholders,” added CAAS in its press release.
It will also lay the foundation for four “critical enablers” that are needed to support and drive sector-wide decarbonisation efforts: Policy and regulation, industry development, infrastructure planning and provision, and jobs and skills.
In the end, sustainability must entail trade-offs, said Mr Iswaran.
“There would be economic costs, and there are costs at the individual level, the enterprise level, and ultimately at the system level.
“And that is exactly why we start with these kinds of panels and initiatives. Because we want to bring in the public sector-private sector partnership, and importantly, the commercial perspective. Because we need that commercial angle to ensure the viability of many of the ideas, especially those that we’re looking at in the near-term.”
At the national level, we also need to have “a strong commitment”, noted Mr Iswaran.
“The Singapore Green Plan is a clear statement and articulation of what Singapore stands for in this regard and how we want to move forward,” he added.
“We do need to bring these together to the best of our ability, (and) ensure we’re able to move forward in a sustainable way, but also in a manner that ensures economic viability taking into account the perspectives of all the stakeholders.”
Existing “Building Blocks” for Sustainable Aviation
There are already existing “building blocks” in place for a sustainable air hub, said CAAS.
For instance, Singapore is one of the 107 states voluntarily participating in the pilot phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to meet a global aspirational target of carbon-neutral growth from 2020.
Besides fulfilling its own commitment, Singapore is also providing capacity building support to other countries to help them in their implementation of CORSIA.
Singapore has also worked with other participating countries to develop a policy toolkit for sustainable aviation fuel, added CAAS.
This toolkit aims to help policymakers around the world grow a sustainable aviation fuel supply, stimulate demand for such fuel and enable a healthy sustainable aviation fuel eco-system.
The CAAS is also working with key industry players on various initiatives to decarbonise the sector, including the installation of solar panels, electrification of ground fleet, implementation of energy-efficient systems and the use of more renewable energy at Changi Airport.
Last week, CAAS and Singapore Airlines (SIA) announced that for a one-year period starting from the third quarter of this year, all SIA and Scoot flights out of Changi Airport will use “a blend of refined jet fuel and neat sustainable aviation fuel”.
“This is expected to reduce about 2,500 tonnes of carbon dioxide emissions over the one-year period,” said CAAS.
Additionally, CAAS is tapping on “new technologies and international collaboration” to enhance air traffic management efficiency. This will reduce airborne time and fuel use.
“While the immediate focus of the Singapore air hub is to revive air travel, we cannot lose sight of the longer-term challenge of climate change. Sustainability is a national priority for Singapore,” said Mr Iswaran, who was at the International Advisory Panel’s inaugural meeting.
“And the (air hub’s blueprint) will articulate how Singapore can contribute to the decarbonisation of international aviation as well as our national sustainability efforts. This is a challenging endeavour especially at a time when aviation companies are still dealing with the effects of the pandemic.
“It will require strong public-private partnership and cross-sectoral collaboration to innovate and reinvent the aviation eco-system.”