Large greenhouse gas emitters voice concerns as Government irons out details of carbon tax

Aqil Haziq Mahmud Channel NewsAsia 23 Jan 18;

SINGAPORE: Instead of being charged a flat rate, large emitters of greenhouse gases have called for the upcoming carbon tax to be based on whether their emissions meet industry-specific benchmarks.

At a consultation session on Tuesday (Jan 23), 40 companies – including those from the power generation and petrochemical industries – voiced concerns about how the carbon tax might be implemented.

Mr Yu Tat Ming, chief executive of PacificLight, a power generation company, said a benchmark system will give companies more incentive to reduce emissions.

“If it is targeted based on a certain benchmark, it can be more differentiating,” he said. “Any marginal carbon will attract heavier tax. That will encourage industries to take action, to meet the target.”

Likewise, another stakeholder said the tax should be charged based on “how far you are away” from the benchmark. “If you charge a flat tax across all carbons, there is very little incentive and margin to improve energy efficiency.”

The carbon tax, which will be implemented next year, is just one in a range of measures aimed at reducing emissions intensity in Singapore by 36 per cent from 2005 levels by 2030 under the Paris Agreement.

It will target large direct emitters, defined as those that emit 25,000 or more tonnes of greenhouse gases annually. This is expected to affect 30 to 40 emitters operating in Singapore.

The Government is also looking at charging a flat rate of between S$10 and S$20 per tonne of greenhouse gas emissions.

But without the “clear visibility” of a benchmark, Mr Yu said, “we don’t know what we are trying to achieve”.

“How much should we improve in order to enable the Government to achieve the target?” he asked. “Because for any improvement, there has to be an investment made. And as a commercial entity, we need to calculate the return on investment.”

If the tax fails to reduce emissions, another stakeholder added, the Government will end up increasing rates across the board, “pushing us down the path of international un-competitiveness”. Others noted that Singapore’s neighbours do not impose carbon tax.

Environment and Water Resources Minister Masagos Zulkifli acknowledged such concerns, noting that companies want the carbon tax to be implemented fairly and simply, without a “cost burden”.

While the Government has studied various systems, the carbon tax has to “finally nudge our companies to transform towards a low-carbon economy”, he said. “This is not an easy thing to design because we must not kill our competitiveness.”

Fixing the tax price is also a challenge, Mr Masagos noted, given the “inevitable” trickle-down effect on consumers.

“If it is too low, people and industries will not transform – behaviour will not change,” he said. “But if it is too high, industries will just relocate, people will suffer too much.”

Nevertheless, the Government will ensure that companies do not pass the “wrong amount of cost to consumers” by encouraging competition and giving consumers a choice, he said.

As for the companies, Mr Masagos said, the Government will make the process of determining the carbon tax price transparent to them.

“Therefore, we’ll try as much as possible to put as much certainty as we can so that we do not price ourselves out,” he said. "But we have to ensure that the right kind of technology and processes are brought to Singapore, so that it doesn’t add up to more emissions.”

Sustainable Energy Association of Singapore chairman Edwin Khew said it is ready to help the Government identify energy efficiency benchmarks for various emission systems.

“We have a good idea of what the different benchmarks are,” he said. “The thing is whether it fits in with what the Government wants.”

With next month’s Budget announcement on the final details of the carbon tax fast approaching, Mr Khew feels the Government would have had enough time to consider the feedback.

“I think they’ve already gone and done a lot of studies and investigations, so when (Finance Minister Heng Swee Keat) announces what level of carbon tax the industry will be facing, he should have enough to decide,” he added.

“It’s not going to be cast in stone, so something that you can introduce and adjust as you go along, as more information will be coming in to help them adapt to the situation in Singapore.”

Source: CNA/hz


Large Singapore emitters call for benchmarks as carbon tax looms
LOUISA TANG Today Online 24 Jan 18;

SINGAPORE — As they steel themselves to pay a carbon tax from next year, major greenhouse-gas emitters called for the Government to set emissions benchmarks for each industry at a pre-Budget consultation session on Tuesday (Jan 23).

Some of the 44 participants at the session, which included representatives of petrochemical and energy giants, said benchmarks would provide clarity on the standards that large emitters should meet.

Others felt emitters who met the benchmarks should not have to pay a carbon tax, reiterating concerns that Singapore’s push to go low-carbon could hurt its competitiveness.

The tax, first announced in Budget 2017, is expected to apply to 30 to 40 emitters such as power stations that emit 25,000 or more tonnes of greenhouse gases a year. The Government is expected to table the Carbon Pricing Bill in Parliament in the first quarter of this year, and is looking to charge between S$10 and S$20 per tonne of greenhouse gas under a credit-based system.

The carbon tax is among Singapore’s measures to meet its target of cutting emissions intensity by 36 per cent from 2005 levels by 2030, under the global Paris Agreement.

Standard benchmarks will provide clear targets to different industries, which generate different amounts of greenhouse gases, said power generation company PacificLight Power’s chief executive Yu Tat Ming.

His company currently supplies electricity to industries and commercial buildings.

“At the moment, (the power industry) does not know what to do, how much we should reduce in order to achieve the 36 per cent target. We have no visibility on that. Likewise, probably the petrochemical industry want to have a benchmark so that they know how much investment they need to make, to meet the target,” said Mr Yu.

Minister for the Environment and Water Resources Masagos Zulkifli acknowledged the feedback from companies.

“We understand that it will be a difficult transition and the Government will do as much as it can to transition companies towards the low-carbon economy,” he said. “We do need to be competitive but you have to take in the reality where the world is moving, and we better do it as fast as we can to gain competitive advantage over others.”

On whether the Government would consider only taxing companies that exceed benchmarks, Mr Masagos said the authorities have “studied many systems of carbon tax, including whether we should do a trading system or offset system”, and wanted something “simple” and “fair”.

The National Climate Change Secretariat will be announcing its mechanism, said Mr Masagos, without providing further details.

The carbon tax is likely to be passed on to consumers. It could mean a household living in a four-room flat, which pays S$72 a month in electricity bills, could see an increase of S$1.70 to S$3.30 a month. The carbon tax component should be reflected in consumers’ electricity bills, said Mr Yu.

There is a need for more awareness about climate change, Mr Masagos added.

Daily temperatures in Singapore could increase by 1.4°C to 4.6°C by 2100 due to climate change. Heavy rainfall events will be more intense and frequent, while mean sea levels could increase by up to about 1m.

Asked about recent reports that three local banks – DBS Bank, OCBC Bank and United Overseas Bank – were financing coal projects in the region, Mr Masagos would only say the reports indicated a world more attuned to products and services in keeping with a low-carbon economy.

“And whether you are a bank, (generation company) or refinery, this is going to be the demand by an international market. And therefore it’s important for us to make this transition. I think most of the companies that are here recognise this. In fact, many of them have already gone (on) the journey,” he said.

Coal is a major source of greenhouse-gas emissions.

Involve consumers in conserving energy: Power firms
Upcoming carbon tax targets large emitters but green message must reach end users too
Audrey Tan Straits Times 24 Jann 18;

In 2019, a carbon tax will be implemented to spur large emitters to become greener in their operations.

But industry players say the need to conserve energy has to filter down to consumers too.

Mr Yu Tat Ming, chief executive of power generation company PacificLight Power, said: "The purpose of the carbon tax is to reduce Singapore's overall emissions. It sends a signal to large emitters that they need to become more efficient in their operations, but the green message should be reinforced among the end users too."

Citing the example of how a water conservation tax forms part of a household's water bill, he said there should be a similar tariff to promote energy conservation.

Mr Yu was speaking yesterday at a pre-Budget consultation session on the carbon tax, organised by the Ministry of the Environment and Water Resources ahead of the Budget on Feb 19, when details of the carbon tax are expected to be revealed.

Mr Yu was among 44 participants from 40 different organisations, including industry players, non-government groups and academics, who were at the consultation. It was also attended by Minister for the Environment and Water Resources Masagos Zulkifli.

Speaking to the media on the sidelines of the event, Mr Masagos said: "Inevitably, a carbon tax imposed on power generation companies... will somewhat trickle down into the economy."

But he added that the Government will look into implementing mechanisms to ensure costs are not excessively passed on to consumers. One way to do this would be to promote competition in the industry, or encourage companies to look into cleaner alternatives such as solar power, Mr Masagos said.

Plans to impose a carbon tax of between $10 and $20 on each tonne of greenhouse gas emissions were first floated at last year's Budget.

The tax will be applied to power stations and other large direct emitters which produce more than 25,000 tonnes of carbon dioxide equivalent of greenhouse gases a year. There are currently 30 to 40 such large emitters, mainly from the petroleum refining, chemicals and semiconductor sectors.

During yesterday's session, industry players acknowledged that while a carbon tax is necessary to help Singapore meet its climate targets under the Paris Agreement, it should be implemented in a way that will not erode competition.

Among the suggestions given was to channel revenue raised from the carbon tax into a kitty that could be used to fund energy efficiency initiatives or research into green technologies, or used for incentives to companies that do well.

Mr Edwin Khew, chairman of the Sustainable Energy Association of Singapore, said revenue collected by the Government from the carbon tax could be from $300 million to $600 million a year. "This money can be used to incentivise those that need to improve in terms of energy efficiency, or help them invest in new equipment and new processes."

Asked if this would be fair to companies comparatively more energy-efficient, he said the focus should be at the national level, instead of individual companies: "Ultimately, this would make less energy-efficient companies more competitive and help keep jobs in Singapore."

Under the Paris Agreement, Singapore has pledged to reduce its emissions intensity by 36 per cent from the 2005 levels, come 2030.

Emissions intensity is the amount of greenhouse gases emitted to achieve each dollar of gross domestic product. Singapore has also pledged to stop any increase to its greenhouse gas emissions by around 2030.

Conserving energy is down to consumers too, say power firms
Audrey Tan Straits Times 23 Jan 18;

SINGAPORE - A carbon tax will soon be implemented to spur large emitters to become greener in their operations. But industry players say the need to conserve energy has to filter down to consumers too.

This was the view of Mr Yu Tat Ming, chief executive of power generation company PacificLight Power, who said: "The purpose of the carbon tax is to reduce Singapore's overall emissions. It sends a signal to large emitters that they need to become more efficient in their operations, but the green message should be reinforced among end users too."

Citing the example of how a water conservation tariff forms part of a household's water bill, he said there should be a similar tariff to promote energy conservation.

Mr Yu was speaking on Tuesday (Jan 23) at a pre-Budget consultation session on the carbon tax, organised by the Ministry of the Environment and Water Resources (Mewr) ahead of the Budget on Feb 19, when details of the carbon tax are expected to be revealed.

Mr Yu was among 44 participants from 40 different organisations, including industry players, non-government groups and academics, who were at the consultation. It was also attended by Minister for the Environment and Water Resources Masagos Zulkifli.

Speaking to the media on the sidelines of the event, Mr Masagos said: "Inevitably, a carbon tax imposed on power generation companies, which generate electricity, will somewhat trickle down into the economy."

But he added that the Government will look into implementing mechanisms to ensure that costs are not excessively passed on to consumers. One way to do this would be to promote competition in the industry, or encourage companies to look into cleaner alternatives such as solar power, Mr Masagos said.

Masagos Zulkifli speaking about the carbon tax

Plans to impose a carbon tax of between $10 and $20 on each tonne of greenhouse gas emission was first floated at last year's Budget. The tax will be applied on power stations and other large direct emitters which produce more than 25,000 tonnes of carbon dioxide equivalent of greenhouse gases a year. There are currently 30 to 40 of such large emitters, mainly from the petroleum refining, chemicals and semiconductor sectors.

During Tuesday's session, industry players acknowledged that while a carbon tax is necessary to help Singapore meet its climate targets under the Paris Agreement, it should be implemented in a way that will not erode competition.

Among the suggestions given was the channelling of revenue raised from the carbon tax into a kitty that could be used to fund energy-efficiency initiatives or research into green technologies, or given as incentives to companies that do well.

Mr Edwin Khew, chairman of the Sustainable Energy Association of Singapore, said revenue collected by the Government from the carbon tax could be in the range of $300 million to $600 million a year. "This money can be used to incentivise those that need to improve in terms of energy efficiency, or help them invest in new equipment and new processes."

Asked if this would be fair to companies that are comparatively more energy efficient, Mr Khew said the focus should be at the national level, instead of individual companies. "Ultimately, this would make companies with less efficient plans more competitive, and help keep jobs in Singapore."

Another suggestion was for industry-specific benchmarks to be set for the large emitters, which span a range of industries, including petrochemical, pharmaceutical and generation companies. This would give each company greater clarity on how much to reduce their emissions by, instead of relying on national level projections.

Under the Paris Agreement, Singapore has pledged to reduce its emissions intensity by 36 per cent from 2005 levels, come 2030. Emissions intensity is the amount of greenhouse gases emitted to achieve each dollar of gross domestic product. Singapore has also pledged to stop any increase to its greenhouse gas emissions by around 2030.

The industrial sector produces about 60 per cent of Singapore's total greenhouse gas emissions, which is why the Government has rolled out a raft of measures - including the imposition of a carbon tax - to force large emitters to go green.

No comments:

Post a Comment