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BUDGET 2017

Companies to prioritise energy efficiency

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The government is strengthening measuring and reporting requirements for greenhouse gas emissions, in preparation for a proposed carbon tax in 2019.

Singapore

THE government is strengthening measuring and reporting requirements for greenhouse gas emissions, in preparation for a proposed carbon tax in 2019.

These are part of several enhancements it will make to the Energy Conservation Act (ECA), which will also include requirements for companies to review their factory design for energy efficiency when investing in new facilities or major expansions.

The ECA already requires large energy consumers to report data relating to energy use and greenhouse gas emissions to the government, but does not stipulate specific methodologies in their computations.

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The enhancements aim to align the standards - and the data collected - with international practices.

"To pave the way for a robust carbon tax regime, we need to have a sound measurement, reporting and verification system in place," said Minister for the Environment and Water Resources Masagos Zulkifli. "The ECA will thus be amended to require larger industrial emitters to improve the quality of measurement and reporting processes for their greenhouse gas emissions."

Larger industrial facilities will need to submit a monitoring plan, including information for approval by the National Environmental Agency (NEA), and provide an enhanced greenhouse gas emissions report based on the plan. They will also have to adopt specified methodologies, such as the World Resources Institute's Greenhouse Gas Protocol.

In other enhancements to the ECA, companies with existing facilities will have to implement a structured energy management system. This is another step above the current requirements in ensuring that companies not only develop a plan, but also implement it and measure the outcome.

NEA said studies have shown such practices can result in energy savings of at least 10-15 per cent in the first few years.

At the same time, companies that are investing in new industrial facilities and major expansions will now have to review their new facility design for energy efficiency, and measure and report the energy performance of systems that account for four-fifths of the facility's total energy consumption.

"Industrial equipment have very long lifespan, so it is important to introduce these measures upfront before the facility is built," said NEA.

The agency is also, for the first time, extending minimum energy performance standards to common industrial equipment and systems. It already imposes such standards for household appliances.

Such standards will be introduced for motors from next year, and other industrial equipment and systems will be progressively added to the list.

To better support companies, especially small and medium enterprises, on energy efficiency initiatives, NEA will consolidate its existing incentive schemes and grants to promote industrial energy efficiency into its Energy Efficiency Fund.

"We will especially help our SMEs by co-funding up to 30 per cent of their investments in energy efficient technologies," said Mr Masagos.

The fund currently has S$3 million but can be increased if necessary, said NEA which will release more details at the end of the month.

Electronic components manufacturer Murata Electronics Singapore is already replacing 50 motors with higher efficiency ones, expecting to reap annual savings of S$21,000 for the 15-year lifespan of the motors.

The company said it has revised its policy to increase the payback period of investment to accommodate newer technology to meet minimum energy performance standards. Still, the government's move to introduce minimum energy standards for industrial equipment will be a challenge for the firm, said its managing director Toshikazu Sasaki.

Given the costs involved in set-up and maintenance, "we need to strike a balance between meeting the government requirement and the realistic installation of a new system", he said. "We would also suggest a gradual implementation to help companies better cope with the changes."

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