Keynote Address at Asia Carbon Summit - Dr Amy Khor

Keynote Address by Dr Amy Khor, Senior Minister of State for Sustainability and the Environment, at Asia Carbon Summit on 24 October 2024 at Sands Expo & Convetion Centre

Er. Edwin Khew, Chairman of the Sustainable Energy Association of Singapore, Distinguished guests, Ladies and gentlemen,

1 Good morning, and congratulations to the Sustainable Energy Association of Singapore (SEAS) for convening the inaugural Asia Carbon Summit, as part of the Asia Clean Energy Summit.

2 This Summit comes at a time of ever-accelerating impacts of climate change on our environment, economies, and societies.

a. Global warming has already reached 1.1 degrees Celsius above pre-industrial levels and are continuing to rise. In fact, 2024 is expected to be the hottest year on record.
b. Climate impacts – such as rising sea levels, extreme weather events and rapidly disappearing sea ice – are now occurring in every region of the world.
c. The stakes are particularly high for Asia, which is warming faster than the global average, and the region is especially vulnerable to various weather and climate hazards.

3 The Global Stocktake at the 2023 UN Climate Change Conference, or COP28, has set out clear actions that we need to take within this critical decade in order to limit global warming to 1.5 degrees Celsius and avert a climate catastrophe. It has called on all countries to transition away from fossil fuels in our energy systems and accelerate the deployment of zero- and low-emission technologies.

4 For the past 10 years, SEAS has been organising the annual Asia Clean Energy Summit series to discuss these important issues and their implications for Asia:

a. Asia has tremendous potential to transit to clean energy. The challenge is how to transit in the best way that enables countries to meet their growing economic and population needs.
b. Investments need to be mobilised to realise these efforts. For example, Asia Pacific’s Energy Transition Outlook, published by BloombergNEF, reports that annualised investments in energy transition technologies will need to triple over 2024 to 2030 for the region to meet net-zero goals by 2050. Closing these financing gaps cannot be done by one party alone and requires strong collaboration amongst all stakeholders.

From Clean Energy to Carbon Markets

5 Carbon markets enable stakeholders to collaborate and explore decarbonisation opportunities that make the most economic sense given their specific needs and circumstances. In the process, this unlocks important financing flows for clean energy transition projects or other forms of emissions reduction or removal projects.

6 I am heartened that SEAS is building on the success of the Asia Clean Energy Summit series by introducing the inaugural Asia Carbon Summit this year. Whether the goal is to engender a successful energy transition or to enable carbon markets to take off, there are many interesting similarities in the key ingredients needed. Let me touch on three “I’s” – infrastructure, innovation and international cooperation.

Infrastructure

7 Firstly, infrastructure. To enable energy transition, the right infrastructure is needed to optimise the energy value chain, from generation to transmission and consumption. Likewise, carbon markets also need the right infrastructure to optimise the mitigation value chain.

8 Article 6 of the Paris Agreement sets out a framework for countries to advance their climate ambitions by cooperating on carbon markets.

9 However, Article 6 alone is insufficient. The development of effective carbon markets has to be complemented by efforts to right-price carbon and establish robust data infrastructures.

a. On carbon pricing, Singapore introduced our carbon tax in 2019 as the first carbon pricing scheme in Southeast Asia. This was done to encourage decarbonisation by sending a strong economic signal to businesses on the negative externalities of carbon emissions.
b. In addition, a robust data infrastructure is needed to enable the tracking and monitoring of carbon credit projects, and the mitigation realised. This helps to bolster trust in carbon markets.
c. To this end, Singapore, together with the International Emissions Trading Association (IETA) and the World Bank, has developed the Climate Action Data Trust, or CAD Trust. CAD Trust serves as a harmonised carbon data platform that will help to improve market transparency. It employs blockchain technology to link, aggregate, and harmonise data across diverse carbon crediting registries.

10 Such efforts to introduce economic levers and improve data infrastructure are crucial to scaling up carbon markets and unlocking greater mitigation potential. I am glad that these important topics will be further discussed at the Summit today.

Innovation

11 The second “I” refers to innovation. Just as how energy transition requires innovation in low-carbon technologies, carbon markets also require innovation in financing models and project types to unlock additional mitigation potential that would otherwise not have occurred.

12 For example, energy transition projects. According to the International Energy Agency’s Coal in Net Zero Transition report, a third of global energy needs today are met by coal-fired power plants. In Asia, these plants contribute to approximately 7.6 gigatonnes of carbon emissions annually. If they continue to operate without active intervention, they will exhaust about two-thirds of the remaining global carbon budget to keep temperature rise to within 1.5 degrees Celsius. Yet, most of Asia’s coal-fired power plants are relatively new, with a remaining operational lifetime of at least 30 years. Hence, we need carbon market innovations to unlock new streams of financing and catalyse the transition from these coal-fired power plants to cleaner energy sources.

13 To this end, Singapore has been proactive in studying and piloting the use of transition credits. Last December, Singapore brought together 30 ecosystem players across key stakeholder groups to form the Transition Credits Coalition, or TRACTION. TRACTION will work to identify system-wide barriers and develop solutions for transition credits to be utilised as a credible financing instrument. We are also in collaboration with partners like the Coal-to-Clean Credit Initiative and the Asian Development Bank to further assess the practicality and viability of scaling transition credits via two pilot projects in the Philippines.

14 Through transition credits, we hope to expand the available financing mechanisms for phasing out coal plants, and provide a transition pathway that is inclusive and just.

International Cooperation

15 Finally, international cooperation. Clean energy challenges, such as grid connectivity, are global in scale and its solutions demand collaboration across borders. The advancement of carbon markets is no different. To ensure active participation in the global carbon market, we need to work together to facilitate cross-border carbon trading.

16 Singapore has been actively contributing to international rule-making on carbon credits collaboration. For example, we co-facilitated consultations on Article 6 of the Paris Agreement at COP26 and COP27, and will do so again at COP29 next month.

17 Singapore has also been building international partnerships to open new sources of high-quality carbon credits. We have signed Implementation Agreements on carbon credits collaboration with Papua New Guinea and Ghana, and recently opened the call for applications under the Singapore-Ghana Implementation Agreement last month. We are also working towards similar agreements with other partner countries and have signed Memoranda of Understanding (MOUs) on Article 6 collaboration with over a dozen other countries, such as Bhutan, Mongolia and Vietnam.

18 While we continue to establish international and bilateral avenues for collaboration on carbon markets, the successful scaling up of carbon markets requires strong support and active participation from the private sector. The Singapore Government will support these efforts. For example, in July 2024, the Ministry of Trade and Industry organised an inaugural business mission to Ghana to spur the development of Article 6-compliant carbon credit projects. The delegation comprised 22 Singapore-based project developers, investors and carbon services companies. As a carbon services and trading hub, Singapore is well-placed to serve as a gateway to originate and finance green projects in the region. I encourage more of you to leverage on Singapore’s networks and infrastructure, and lend your support to the development of robust carbon markets.

Conclusion

19 Let me conclude. While I have just shared how carbon markets can be scaled up through the three “I’s”, undertaking this effort is not a matter of “I” but “we”. This is also the same for our energy transition ambitions. I hope we will all be inspired by the theme of today’s summit to create greener footprints and contribute to a cleaner planet for ourselves and future generations to come.

20 I wish you a fruitful Summit ahead. Thank you.