Singapore: Proactive decarbonization climate 

In an interview with Maritime Fairtrade, Terence Tan, director, carbon management, United Nations Global Compact Network Singapore (GCNS) opines that the maritime industry and government in Singapore is sufficiently proactive in sustainability, but “sustained effort will be required to mobilize all the industry players, big and small, local and international, to keep in step with ambitious (emission targets) and timelines.”

Tan also said the multi-pillars of the maritime landscape, such as financing, decarbonization, upskilling, and green messaging, interact with one another to reshape the future under a vigorous climate of transformation. 

GCNS is the local chapter of the United Nations Global Compact, and focuses on corporate sustainability by driving multi-stakeholder conversations. 

In your opinion, how are the sustainability efforts of the maritime sector in Singapore?

The Maritime and Port Authority of Singapore (MPA) has been a key change agent in driving the sustainability and green efforts of the maritime sector in Singapore. There has been a slew of initiatives and plans announced recently, such as the Maritime Singapore Decarbonization Blueprint. Some of the key initiatives are: 

  • The setting of targets for the domestic harbor craft sector to achieve net-zero emissions by 2050, and development of concrete net-zero fuel pathways, such as the requirement that from 2030, all new domestic harbor crafts should not be fossil-fuel powered.
  • The establishment of bilateral Green and Digital Shipping Corridors (GDSCs) with major ports in other parts of the world, such as the Port of Rotterdam and the Ports of Los Angeles and Long Beach, which help to facilitate movement of ships powered by sustainable fuels within these corridors.
  • The building up of capability to safely and securely supply and deliver alternative fuels to the local and international bunker market, such as ammonia, hydrogen and methanol.

As the maritime industry is an essential plank in Singapore’s economy (around 7% of GDP) and a key player in the international maritime trade, there is really no alternative but to address head-on the sustainability and environmental challenges it faces.

However, given the plans and progress to date, and as there is no apparent lack of will or commitment on the part of the local authorities, the industry seems well-positioned to achieve their long-term environmental goals. 

Sustained effort, however, will be required to mobilize all the industry players, big and small, local and international, to keep in step with these ambitious timelines. At GCNS, we work closely with companies to upskill them in using our proprietary carbon tool, CERT, to track and manage their emissions. In partnership with MPA, we have so far conducted six courses upskilling over 100 participants from over 50 unique companies. 11 of these organizations have been recognized with the Maritime Singapore LowCarbon50 Award hosted by the MPA in the past three years.

How about in comparison to the decarbonization efforts in Asia?

Global shipping currently contributes around three percent of the world’s total greenhouse gases (GHG) emissions. It is projected to grow anywhere between 50 and 250 percent by 2050, depending on the exact scenario envisioned.

Moreover, the Asia-Pacific region represents some 56 percent of global maritime container traffic, and is home to 20 of the world’s top 30 container ports1. Thus, decarbonization efforts in this sector are critical to global efforts to achieve commitments made in the Paris Agreement in 2015, and forestall global warming impacts.

While Singapore is a leader in maritime decarbonization with a comprehensive and well-thought-out plan, other Asian countries are also making significant strides, each with their unique approaches and focus areas.

The individual and collective efforts in Asia reflect a growing commitment to sustainability. Most Asian countries are adopting similar decarbonization pathways – such as mandating energy-efficient new-builds, facilitating the use of sustainable energy sources and phasing out fossil fuels – and a stronger reporting and disclosure framework. However, reflecting different priorities among countries, the pace of change and the exact type of solutions often differ.

For example, Japan has a stronger focus on hydrogen fuel technology, while China is making significant investments in electric and hybrid vessels. Similarly, transparency levels vary significantly – Japan and South Korea have high standards of sustainability reporting, while other countries are still developing these reporting frameworks. Finally, in terms of regulatory involvement, Singapore does stand out for its proactive leadership and more centralized approach. 

How do key trends found in the Singapore Business Carbon Report, released by GCNS in June 2024, affect decarbonization efforts of the maritime industry?

While the Singapore Business Carbon Report does not specifically measure key trends in the maritime sector, there are strong correlations between the maritime sector and the sectors defined in the report. We can make these observations as GCNS has been supporting the MPA as a judge on the Maritime Singapore LowCarbon50 award process. In these past few years, we have witnessed some really good best practices among companies involved in the maritime industry: 

  • About 50 percent of the participating companies have been able to achieve at least a five percent year-on-year GHG emissions reduction. Of the other 50 percent which increased emissions, many attributed this to increased activity (including ironically, increased air travel) after the pickup in demand following the pandemic.
  • All companies have implemented various short and long-term initiatives to reduce their carbon footprint, bearing in mind the need to achieve net zero emissions by 2050. These measures are typically a mixture of energy efficiency or operational initiatives, and technology or hardware projects which often involve large capital expenditures.

Leadership was highly involved in the whole process, including setting the right targets for the organization, wading through the alphabet soup of standards and disclosure requirements, and driving a whole-of-company mindset change to embrace the increased challenges in the sustainability space.

These trends are strong indications that the maritime industry’s shift towards sustainability and decarbonization is slowly building momentum. Regulatory pressure, technological advancements, investor demands, financial incentives, industry collaboration, and market pressures are all contributing to significant environmental progress.

What are some ways the maritime sector can leverage on the advantages, and navigate the challenges?

The maritime sector has a lot of advantages. A very supportive and committed government and the relevant agency in the shape of MPA has rolled out a significant and meaningful suite of programs and initiatives including grants, green financing options, a strong collaborative relationship with international organizations, such as the IMO and major international ports, and clear rules and governance which are in place in Singapore.

To leverage these advantages, companies are encouraged to seek out the right funding, invest in the right technologies, and build the right industry alliances and share best practices. The challenges continue to lie in the areas of high capital costs, complex regulatory requirements, especially between countries, and a shortage of skilled workforces – particularly those with expertise in maritime sustainability.

These challenges can be overcome if companies phase out investments and explore partnerships to share costs, stay informed through collaboration with industry associations, and invest in suitable training programs – possibly in collaboration with educational institutions. By implementing these strategies, the maritime sector can make significant progress in sustainability while effectively addressing challenges along the way. 

Are financial institutions and government organizations doing enough to alleviate the cost burdens of going green?

Whilst financial institutions and government organizations in Singapore are actively working to alleviate the cost burdens of going green for the industry, it’s hard to say when “enough” is enough though.

In 2011, and extended in 2019 till end of 2024, the MPA pledged to invest up to S$100 million in the Maritime Singapore Green Initiative to cover four programs:

  • Green Ship Program
  • Green Port Program
  • Green Energy and Technology Program
  • Green Awareness Program

Besides specific maritime sectorial support, the most recent Singapore budget also announced various other support programs for green R&D, eco-friendly retrofitting, and sustainable infrastructure, such as the S$5 billion Future Energy Fund.

Therefore, there is certainly no lack of support, financial or otherwise, to kick-start and accelerate the journey towards net-zero.

In my opinion, there could be more readily-available funding, especially for SMEs, to economically invest in green projects and initiatives. We do not mean to advocate for easy or loose dispensation of funding, as this must always be balanced against the necessary accountability by the government on the use of taxpayers’ money.

Rather, the easing of documentary and evidentiary requirements, pre- and post-grant award, and eventual disbursement could be helpful in encouraging more companies to step up their efforts in identifying and developing suitable GHG reduction projects and initiatives.

On our end, upskilling professionals in SMEs remains a top priority at GCNS. We are one of three organizations selected to run a decarbonization course under the Enterprise Sustainability Program (ESP), which is part of Singapore Green Plan 2030. Companies can avail a 70 percent subsidy by Enterprise Singapore for the course fee to transition their businesses to sustainable models. In its first year alone, the course engaged around 150 participants representing over 100 unique companies.

As awareness about climate change increases, why do green washing on social media and in the media rise as well?

As consumers increasingly demand environmentally-friendly products and services, this creates a powerful market incentive for companies to respond with “green” products and services to attract and retain customers.

Companies are also aware that they can benefit from differentiating themselves from their competitors by being quicker to align with these new consumer and stakeholder expectations, which can sometimes lead to them taking short cuts or lowering standards. 

Furthermore, social media platforms amplify messages rapidly and broadly. This is a double- edged sword, as it not only benefits individuals and consumers. Companies can also quickly gain visibility and attention by promoting their own green initiatives on these same platforms.

Due to the lack of clear standards on what is a valid sustainability claim and what is not, and due to the effort and cost of developing truly green products and solutions, companies are pressured to produce superficial or even misleading claims on sustainability. In order to counteract the increasingly observed trend of greenwashing, we need stronger and stricter regulatory and voluntary standards for sustainability claims made by companies.

More teeth can also be given to organizations such as the Advertising Standards Authority of Singapore (ASAS) to issue corrective actions, such as binding sanctions and directives. We can also educate and encourage companies to be transparent about their sustainability practices and progress in order to build trust with the public.

At GCNS, our members undergo a rigorous screening before onboarding into the UN Global Compact, an umbrella that provides a universal language for corporate responsibility and a framework to guide all businesses regardless of size, complexity or location.

1. UN ESCAP report “Sustainable Maritime Transport in Asia and the Pacific” dated April 2023.

Photo credit: GCNS. Terence Tan, director, carbon management, GCNS.

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