Clearer skies ahead for carbon trading in Singapore

Implementation less costly for companies with Government grant
Neo Chai Chin, Today Online 15 Aug 08;

ONE man’s waste is another man’s pot of gold.

Two companies in Singapore found their pot of gold in the leaves and branches and other horticultural waste from roadside trees trimmed by National Parks Board contractors.

Using the “waste” — also known as biomass — to generate power for their industrial plants, Kim Hock Corp and Bee Joo Industries hope to earn carbon credits and trade these credits with overseas companies that burn fossil fuels.

Both see the value in using clean energy: Not only will they reduce Singapore’s carbon dioxide emissions, they will earn income from selling their carbon credits to firms that run on fossil fuels.

Bee Joo, a subsidiary of Singapore Exchange-listed environmental solutions provider ecoWise Holdings, has already secured the sale of 95,000 Certified Emission Reduction Certificates (CERs) — the technical term for carbon credits — to Japanese power company Kansai Electric Power. The amount is equivalent to 95,000 tonnes of carbon dioxide. With CERs trading at about 22 euros ($45) presently, this would mean potential revenue of about 2 million euros for the firm.

Waste recycler Kim Hock will set up a plant at its Sungei Kadut premises by the end of the year producing pellets from recycled waste wood for export. The pellets are destined for boiler plants such as factories making instant noodles or any “industry that needs thermal energy”, said its general manager Lim Teck Siang.

While revenue will come mainly from the pellets, income from carbon credits will be a “bonus”, he said.

But it’s a long process getting their projects validated by the United Nations. Companies have to hire consultants and auditors to document plant processes and decide how many carbon credits they are entitled to, before submissions are made to the UN for approval.

Besides Kim Hock and Bee Joo, two other companies here — IUT Global and PowerSeraya — have made submissions to earn carbon credits.

While companies previously had to foot the consultancy fees for such a move all by themselves, those seeking to trade carbon credits will have it easier from now on: The National Environment Agency announced a grant yesterday to co-fund companies’ carbon consultancy fees.

Kim Hock’s Mr Lim said that first and foremost, carbon trading has to be “economically viable” for companies.

Comparing it with the Government’s incentive to boost birth rates, he said: “It’s like you’re married and going to have a baby anyway, and the government gives you a baby bonus. But I don’t think people will want to get married for the baby bonus.”