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CNA
13-06-2025
- Business
- CNA
Singapore-Indonesia joint task force to study development of sustainable industrial zone
Singapore and Indonesia will form a joint task force to study the development of a sustainable industrial zone in Bintan, Batam and Karimun. These are part of larger efforts to further low-carbon cooperation and build foundations for a stronger ASEAN power grid. Both countries also inked Memorandums of Understanding on cross-border electricity trade and cross-border carbon capture and storage. Singapore's Minister-in-charge of Energy, Science and Technology Tan See Leng said this will be crucial for decarbonising economic activities that are hard to abate. Professor Sumit Agarwal from the NUS Business School shared more about sustainable industrial zones and how both countries would stand to benefit.
The Star
13-06-2025
- Business
- The Star
Singapore and Indonesia deepen green energy partnership with three new deals
The MoUs were inked on June 13 during a visit to Jakarta by Singapore's Minister-in-charge of Energy and Science and Technology, Dr Tan See Leng, and Indonesia's Minister for Energy and Mineral Resources, Dr Bahlil Lahadalia. - TAN SEE LENG/FACEBOOK JAKARTA: Singapore and Indonesia have inked three key agreements to strengthen cooperation in clean energy and sustainable development, in a 'win-win partnership' that marks a significant milestone in their green partnership. The Memoranda of Understanding (MoUs) were inked on June 13 during a visit to Jakarta by Singapore's Minister-in-charge of Energy and Science and Technology, Dr Tan See Leng, and Indonesia's Minister for Energy and Mineral Resources, Dr Bahlil Lahadalia. Describing the agreements as a step forward in the two countries' shared vision for a low-carbon and resilient future, Dr Tan said the deals were mutually beneficial. 'Today's signing ceremony is not just symbolic. It is a true reflection of both our shared resolve to translate our ideas into actions and to do so in close partnership and mutual trust,' he said in a speech. The agreements, Dr Tan added, 'offer win-win opportunities' amid global climate challenges and economic uncertainty. They aim to grow and decarbonise both countries' economies in a sustainable way, spur innovation and unlock new growth areas. 'These are a concrete step to anchor long-term cooperation,' he said. One of the cornerstone agreements targets cross-border electricity trade (CBET). This builds on earlier energy cooperation frameworks and aims to develop the necessary policies, regulatory mechanisms and commercial terms within a year. Dr Tan noted that the projects under this initiative could attract significant capital investment, boost foreign exchange earnings, and increase annual tax revenue. He added that electricity exports would also accelerate the growth of Indonesia's renewable energy manufacturing sector and enhance its broader supply chain, creating jobs and drawing long-term investment. 'Together, Singapore and Indonesia, we are also laying the foundation for a more connected Asean Power Grid and a more secure and sustainable energy future,' he said, referring to the initiative to connect energy systems across South-east Asia. Another agreement focuses on collaboration in carbon capture and storage (CCS). A joint working group will be formed to explore a legally binding bilateral agreement to facilitate project implementation. Calling CCS 'necessary for the decarbonisation of hard-to-abate economic activities' in both countries, Dr Tan said such a move could create a major new business opportunity for Indonesia while creating jobs and attracting investments. 'It is not a new technology, but if Indonesia and Singapore can succeed in making this cross-border CCS a reality, we will be among the first countries in Asia to do so,' he said. - The Straits Times/ANN
New Straits Times
13-06-2025
- Business
- New Straits Times
Indonesia, Singapore sign deals on power trade, carbon capture
JAKARTA: Indonesia and Singapore signed initial deals on Friday to develop cross-border trade in low-carbon electricity and collaborate on carbon capture and storage, ministers from both countries said in Jakarta. The electricity deal reaffirmed an earlier agreement to export solar power from Indonesia to Singapore, with a group of companies planning to build plants and grid infrastructure to generate and transmit the power. The memorandum of understanding (MoU) signed by the two countries states they will aim to draw up policies, regulatory frameworks and business arrangements that will enable Indonesian power to be delivered to Singapore. Indonesia expects to export 3.4 gigawatts of low-carbon power by 2035, according to a presentation slide shown by Indonesia's energy minister Bahlil Lahadalia. In another MoU, the two countries said they would look into drawing up a legally binding agreement for carbon capture and storage (CCS) that would allow cross-border projects to go ahead. If successful, it will be the first such project in Asia, said Singapore government minister Tan See Leng. Energy firms BP, ExxonMobil, and Indonesia's state company Pertamina are already developing CCS projects in Indonesia. With its depleted oil and gas reservoirs and saline aquifers capable of storing hundreds of gigatonnes of CO₂, Indonesia has allowed CCS operators to set aside 30 per cent of their storage capacity for carbon captured in other countries. The two countries also signed a deal for the development of sustainable industrial zones on several Indonesian islands near Singapore, including Batam, Bintan and Karimun. Bahlil said the deals could bring in more than US$10 billion of investment from the manufacturing of solar panels, the development of CCS projects and potential investment in industrial estates.
Straits Times
13-06-2025
- Business
- Straits Times
Singapore and Indonesia deepen green energy partnership with three new deals
The MOUs were inked on June 13 during a visit to Jakarta by Singapore's Minister-in-charge of Energy and Science and Technology, Dr Tan See Leng, and Indonesia's Minister for Energy and Mineral Resources, Dr Bahlil Lahadalia. PHOTO: TAN SEE LENG/FACEBOOK Singapore and Indonesia deepen green energy partnership with three new deals – Singapore and Indonesia have inked three key agreements to strengthen cooperation in clean energy and sustainable development, in a 'win-win partnership' that marks a significant milestone in their green partnership. The Memoranda of Understanding (MOUs) were inked on June 13 during a visit to Jakarta by Singapore's Minister-in-charge of Energy and Science and Technology, Dr Tan See Leng, and Indonesia's Minister for Energy and Mineral Resources, Dr Bahlil Lahadalia. Describing the agreements as a step forward in the two countries' shared vision for a low-carbon and resilient future, Dr Tan said the deals were mutually beneficial. 'Today's signing ceremony is not just symbolic. It is a true reflection of both our shared resolve to translate our ideas into actions and to do so in close partnership and mutual trust,' he said in a speech. The agreements, Dr Tan added, 'offer win-win opportunities' amid global climate challenges and economic uncertainty. They aim to grow and decarbonise both countries' economies in a sustainable way, spur innovation and unlock new growth areas. 'These are a concrete step to anchor long-term cooperation,' he said. One of the cornerstone agreements targets cross-border electricity trade (CBET). This builds on earlier energy cooperation frameworks and aims to develop the necessary policies, regulatory mechanisms and commercial terms within a year. Dr Tan noted that the projects under this initiative could attract significant capital investment, boost foreign exchange earnings, and increase annual tax revenue. He added that electricity exports would also accelerate the growth of Indonesia's renewable energy manufacturing sector and enhance its broader supply chain, creating jobs and drawing long-term investment. 'Together, Singapore and Indonesia, we are also laying the foundation for a more connected Asean Power Grid and a more secure and sustainable energy future,' he said, referring to the initiative to connect energy systems across South-east Asia. Another agreement focuses on collaboration in carbon capture and storage (CCS). A joint working group will be formed to explore a legally binding bilateral agreement to facilitate project implementation. Calling CCS 'necessary for the decarbonisation of hard-to-abate economic activities' in both countries, Dr Tan said such a move could create a major new business opportunity for Indonesia while creating jobs and attracting investments. 'It is not a new technology, but if Indonesia and Singapore can succeed in making this cross-border CCS a reality, we will be among the first countries in Asia to do so,' he said. South-east Asia, he added, has the potential to store up to 133 gigatonnes of carbon dioxide permanently. Singapore's 2 million tonnes-per-year project could serve as a 'pathfinder' for Indonesia, which aspires to be a regional CCS hub. The third agreement supports the development of a sustainable industrial zone (SIZ) in the Bintan, Batam and Karimun region – known collectively as BBK – near Singapore. A joint task force will identify potential industries to be developed in the area. 'This builds on the many years of cooperation we have between Singapore and Indonesia to attract investments into BBK,' said Dr Tan. He added that the renewed commitment to energy and carbon collaboration projects in BBK would help catalyse more industrial activities in Indonesia. Singapore's Ministry of Trade and Industry (MTI) said the SIZ agreement underscores the importance both governments place on regulatory clarity for renewable energy ventures, which could in turn attract green investments into Indonesia. Further implementation details and expected outcomes will be announced at a later date, the ministry added. Dr Tan wrapped up his speech by underlining the importance of regional collaboration. 'As the saying goes, if we want to go far, we must go together. Singapore remains committed to working with Indonesia and other partners to support one another's journey to net-zero. Let us continue to collaborate in good faith, to develop new opportunities for innovation, cooperation and partnership.' Similarly, Indonesia's Dr Bahlil emphasized the importance of collaboration in his speech, noting that today was 'a historic moment' in fulfilling the commitment between the Singapore and Indonesia governments on green energy cooperation. No industrial product can remain globally competitive unless it adopts the latest energy technologies and operates close to green industry standards, he said. 'There is one key principle: we provide electricity to our brothers and sisters in neighbouring countries, but they must also collaborate with us to build industrial zones in Indonesia. That is what true cooperation means,' he said. Arlina Arshad is The Straits Times' Indonesia bureau chief. She is a Singaporean who has been living and working in Indonesia as a journalist for more than 15 years. Join ST's WhatsApp Channel and get the latest news and must-reads.
The Star
10-06-2025
- Business
- The Star
Singapore's projected carbon tax revenue for 2024 lower than expected after five-fold hike in tax rate
SINGAPORE: The revenue collected from Singapore's carbon tax for 2024 – the year the tax rate went up to five times from before – is projected to be about S$642 million, The Straits Times has learnt. This is up from the roughly $200 million in yearly revenue collected when the tax rate was $5 per tonne of emissions from 2019 to 2023. In 2024, the tax rate rose to $25 per tonne of greenhouse gas emissions. Assuming emissions that year remained at levels similar to previous years, the total tax revenue should be about $1 billion. One expert has suggested that the lower-than-expected carbon tax revenue is likely due to allowances given to trade-exposed emitters to help them stay competitive. There are roughly 50 facilities in Singapore liable for the carbon tax, mainly from the manufacturing, power, waste and water sectors. These emitters are responsible for about 70 per cent of total national emissions. Singapore's total national emissions ranged between 53.87 million tonnes and 58.59 million tonnes annually from 2019 to 2022. The revenue from carbon tax collected has also been consistent. In response to queries, a Singapore government spokesperson told ST the $642 million was estimated based on several factors. The higher revenue reflects the higher carbon tax rate, but also takes into account several other factors, said the spokesperson. '(This includes) the projected emissions by taxable facilities, the use of international carbon credits to offset carbon tax liabilities, and transitory allowances for eligible companies in the emissions-intensive, trade-exposed sectors,' the spokesperson added. The $642 million estimate was reflected in the Budget 2025 revenue and expenditure estimates document. The tax is expected to be collected by end-September. Transitory allowances refer to the 'carbon tax relief' given to eligible companies here that face strong competition globally. Such companies may come from the chemicals, electronics and biomedical manufacturing sectors, and allowances may be offered to help them adjust to the higher tax rate and safeguard their business competitiveness. It is not clear how many firms have received this reprieve. The quantum of the allowances was also never revealed, although Reuters reported in 2024 that refiners and petrochemical companies were offered rebates of up to 76 per cent for the carbon tax for 2024 and 2025 to help them ease cost strains and remain competitive. In 2024, then Second Minister for Trade and Industry Tan See Leng said the Government will, at an appropriate time, release aggregated information on the amount of allowances provided. On the use of international carbon credits, major emitters are allowed to use eligible credits to offset up to 5 per cent of their emissions each year. ST earlier reported that the Government was allowing firms to roll over their unused offset limit in 2024 to 2025, owing to a constrained supply of quality carbon credits in 2024. To date, no tax-paying company has notified the authorities of its intent to use carbon credits to offset its tax, the Ministry of Sustainability and the Environment and the National Environment Agency told ST. This means none of the emitters has used carbon credits in 2024. Firms that wish to roll over their offset limit must pay their full carbon tax in 2024. If they plan to roll over the limit, they can offset 5 per cent of the total quantum of 2024's emissions in 2025, on top of offsetting 5 per cent of 2025's emissions. By making fossil fuel use costlier, a carbon tax incentivises large emitters to switch to cleaner energy, improve efficiency or adopt low-carbon technologies. The government spokesperson said: 'The carbon tax provides an economy-wide price signal and impetus to improve energy and carbon efficiency in all sectors, and enhances the business case to invest in low-carbon solutions. It is a key part of Singapore's comprehensive suite of mitigation measures, and underpins the implementation of other decarbonisation initiatives.' The carbon tax rate will go up to $45 a tonne in 2026 and 2027, with a view to reaching between $50 and $80 a tonne by 2030. The tax revenue is used to fund expensive decarbonisation solutions, help businesses be more energy-efficient, and cushion the impact of higher costs on households, Minister for Sustainability and the Environment Grace Fu said in a parliamentary reply in 2024. Singapore Management University associate professor of finance Liang Hao said it is reasonable to conclude that the allowances were a major contributor to the lower-than-expected tax revenue projection for 2024. 'While other factors like emissions levels do play a role, the scale of the shortfall – roughly $350 million to $400 million – strongly suggests that transitional allowances are the primary factor,' he added. Climate policy observer Melissa Low said: 'The Government would have likely assessed that the loss of competitiveness from the higher carbon tax is greater than the loss of carbon tax revenue. So, this is an example of a trade-off being decided within the Government.' Senior research fellow Kim Jeong Won from the NUS Energy Studies Institute noted that other countries with a carbon tax regime have also been offering similar allowances. For example, Sweden's manufacturing companies that face tough competition have enjoyed a discount of more than 50 per cent on carbon tax for around two decades. When asked how allowances impact the carbon tax regime, Dr Kim said such rebates can weaken the emissions-reducing effect of a carbon tax because companies can choose to just pay the tax if that is easier and less costly than decarbonising. She added that the allowances might be unavoidable in the early stage of carbon tax implementation. But there are countries with a longer carbon tax history that have phased out or plan to reduce such 'discounts' on emitters. 'Thus, Singapore also needs to consider how to gradually reduce the current transitory allowances while maintaining economic competitiveness,' added Dr Kim. Low, a research fellow at the NUS Centre for Nature-based Climate Solutions, said it is too early to tell the effectiveness of Singapore's carbon tax. 'I'm hesitant to say the carbon tax regime is rendered less effective due to the allowances, because there are a lot of factors that would go into such calculations,' she added. Prof Liang, who is also co-director of the Singapore Green Finance Centre, added: 'Going forward, greater transparency around the volume and recipients of transitory allowances could help build public trust and reinforce the credibility of Singapore's climate commitments.' - The Straits Times/ANN
