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Environmental criteria for government tenders, fixed grants to green manufacturing announced

Jovi Ho
Jovi Ho • 6 min read
Environmental criteria for government tenders, fixed grants to green manufacturing announced
The public sector will publish annual sustainability reports from FY2022, with all statutory boards following suit from FY2024, says the Minister for Sustainability and the Environment, Grace Fu. Photo: Bloomberg
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Following a slew of climate-related announcements in the lead-up to last year’s COP27, further commitments to decarbonisation were largely left out of this year’s Budget. Two weeks on, the Minister for Sustainability and the Environment, Grace Fu, has charted the Republic’s next steps in a speech at her ministry’s Committee of Supply (COS) debate.

From FY2022 ending March 31, the government will publish annual sustainability reports from the public sector, starting with Scope 1 and 2 emissions, along with electricity and water consumption.

Under the GreenGov.SG initiative, the public sector has committed to achieving net-zero emissions around 2045, five years ahead of the broader national target.

In addition, all statutory boards will commit to issuing these annual disclosures from FY2024, says Fu in her March 2 speech. Several statutory boards have started making sustainability disclosures, she adds. “They have been systematically incorporating sustainability in their decision-making and risk management frameworks to achieve concrete sustainability outcomes.”

The Monetary Authority of Singapore (MAS), for example, published its first sustainability report in June 2021. The following year, MAS set Scope 1, 2 and 3 emissions reduction targets, with the latter focusing on business air travel and outsourced currency operations.

Fu adds that each ministry has also appointed a chief sustainability officer to oversee sustainability matters. “They will work closely with the government chief sustainability officer (GCSO) to develop and coordinate strategies to meet this ambition.”

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Singapore’s first GCSO, Lim Tuang Liang, assumed the role at the start of the year. Lim, who is concurrently deputy secretary of special duties at the Ministry of Sustainability and the Environment (MSE), will relinquish his position as MSE’s chief science and technology officer when a replacement is found.

“I hope that these initiatives under GreenGov.SG will spur many in the private sector to follow suit in publishing their own sustainability reports and incorporating sustainability considerations in their procurement policies,” says Fu.

Greener construction, ICT tenders

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The public sector will also raise the bar on green procurement. Starting 2024, sustainability practices will also come into consideration, contributing up to 5% of evaluation points for large construction and Information and Communications Technology (ICT) tenders.

According to Fu, the two fields make up more than 60% of government procurement contracts by value. Some examples include public infrastructure, industrial buildings and office ICT equipment contracts. “Using ICT as an example, in addition to the requirement of matching the best-in-class in energy efficiency, we may evaluate the efforts of the tenderers in reducing packaging and carbon footprint of their operations when we evaluate the tender bids.”

Fu expects these greening efforts to drive up costs for the public sector. “Environmental sustainability is not costless, and we will have to pay a bit more for greener goods and services,” she says.

But as the world decarbonises, demand for green products and services will grow, adds Fu. “Green procurement in the public sector will encourage suppliers to adopt sustainability practices and develop green products and services, thereby enhancing the growth of the green economy in Singapore and the competitiveness of our companies globally.”

Energy Efficiency Fund

Manufacturing companies will receive more support with an enhanced Energy Efficiency Fund (E2F). Launched in April 2017, the E2F supports manufacturing companies with annual group sales turnover not exceeding $500 million, including small and medium-sized enterprises (SMEs), to invest in energy-efficient technologies or equipment.

From April 1, the enhanced E2F will cover 70% of costs for pre-approved energy efficient technologies, such as compressed air systems with air blowers and replacement of boilers with heat pumps.

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The National Environment Agency (NEA) last updated the E2F scheme in April 2022, when it raised the support cap from 50% to 70%. Under this metric, grant sums would vary according to the carbon abatement achieved by each project.

By fixing the subsidy at 70% of costs, the enhanced scheme offers manufacturing companies certainty of the grant amount, says Fu.

NEA will also introduce simplified measurement and verification (M&V) requirements. In lieu of an M&V report, NEA will accept a simpler third-party assessment report for projects with grant amounts exceeding $50,000. The M&V requirement will be waived for smaller projects with grant amounts of $50,000 and below.

NEA will also cover 70% of qualifying costs for the third-party assessment service. “E2F applicants can tap the low-cost energy assessment services offered by the Energy Efficiency Technology Centre (EETC), a collaboration between NEA and the Singapore Institute of Technology since 2020,” reads NEA’s press release.

As of January, the E2F has supported a total of 44 energy-efficient technologies projects involving LED lightings, high-efficiency air-conditioning systems, variable-speed air compressors and boiler systems, says NEA. These projects have removed an estimated 2,000 tonnes of carbon emissions annually, equivalent to taking some 700 cars off the road.

“I encourage eligible companies, particularly our SMEs, to tap the enhanced scheme to defray the cost of switching to more energy-efficient equipment,” says Fu. “This will enhance their competitiveness as they participate in the greening of our economy.”

Pandan Reservoir solar tender

Singapore will soon welcome its second floating solar farm, this time at Pandan Reservoir. This comes on the back of Tengeh Reservoir’s 60 megawatt-peak (MWp) floating solar photovoltaic system, which opened in July 2021.

National water agency PUB will call for the tender later this year, says Fu.

With a minimum capacity of 44MWp, the Pandan Reservoir solar farm will power some 11,000 four-room public housing flats annually. This will augment the 68MWp generated by existing solar energy systems.

In March 2022, PUB appointed Australian-based engineering consultancy Aurecon to carry out preliminary engineering design and feasibility studies for two floating solar projects — the one at Pandan Reservoir and a larger 100MWp system at Lower Seletar Reservoir.

Both reservoirs were first identified as potential sites for the floating solar farms in August 2021, a month after the Tengeh Reservoir system officially opened.

PUB is also exploring innovative technologies to remove carbon, says Fu. In partnership with the University of California, Los Angeles, PUB is test-bedding the use of novel electrolysis technology to capture carbon dioxide in seawater as part of the desalination process. This will produce hydrogen and pre-treat seawater so that it can be desalinated at lower energy.

PUB is also working to reduce energy use in desalination and NEWater production. It targets to reduce the energy consumption for desalination from 3.5 to less than two kilowatt-hour per cu m by 2025.

“I invite businesses to partner us in being catalytic agents to the transition, by moving ahead of the curve to bring about the next bound of sustainability,” says Fu. “I invite the community to partner us in building a social compact that will make us the greenest generation so far. I invite everyone to partner us in building a green nation together.” 

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