Petrochem industry needs a 'just transition' to green economy: Workers' Party

GIVEN Singapore's deep linkages to the "brown" economy, managing Singapore's green transition, particularly in the petrochemicals industry, will be key, said Workers' Party Member of Parliament (MP) Dennis Tan on March 1, the second day of the Budget debate in Parliament.

"While we build for the economy of tomorrow, the reality is that if we take away the manpower and capital in the petrochemical industry abruptly, we will cut the oxygen prematurely at a time when our green ambitions have only just begun," noted Tan, saying there is a need for a "just transition" within the industry.

Disruptions to the talent pipeline were a particular area of concern.

According to a 2019 answer to a Parliamentary Question, the energy and chemicals industry employed about 28,000 people in 2018. The number went down to 27,000 in 2020, said the Hougang MP.

"Any growing resistance in Singapore against the oil & gas industry may mean a talent pipeline disruption in this strategic pillar," he said.

Indeed, there is still a need for petrochemicals in the modern green economy, as some petrochemicals can be found in modern solar panels, wind turbines, and batteries, said Tan.

He asked for more details on how the government intends to manage the green transition in the petrochemicals industry and if Singapore will continue to attract and keep parts of the petrochemicals industry in Singapore that are relevant.

Separately, Tan also asked if there are any plans to extend the carbon tax to companies that emit less than 25,000 tonnes of greenhouse gas emissions (GHGs) per annum.

This builds on the announcement made by Finance Minister Lawrence Wong on Feb 18 that the carbon tax rate in Singapore will be increased from the current S$5 per tonne of emissions to between S$50 and S$80 by 2030.

Singapore's carbon tax applies to all facilities producing 25,000 tonnes or more of GHG a year.

Separately, MP Gerald Giam noted that even as efforts are taken to transform our economy to boost the attractiveness of local talent to companies, the Ministry of Manpower should "watch out for companies that circumvent market testing requirements" and putting out token postings when they already have a foreigner in mind to hire.

"Where there are instances of companies claiming that they are unable to find Singaporeans to take up positions, we need to make a deeper qualitative assessment on why this is so. For example, are there gaps in our education system that are preventing our schools from producing market-ready graduates?"

MP Sylvia Lim too stressed the importance of moving up the value chain and becoming owners of intellectual property. Citing the Global Innovation Index 2021, she noted that while Singapore has consistently ranked in the top 10 for more than a decade, the city-state did not fare so well in the area of creative outputs and knowledge and technology outputs.

"We should do some introspection on why we seem to be somewhat lagging in (these) areas ... Do we need to do more to nurture creativity and risk-taking? Are there other inhibitors in Singapore's ecosystem that need to be addressed?"

The Aljunied Group Representation Constituency MP also highlighted the need for greater inclusivity. Citing the example of household illustrations used to illustrate expected impact of the GST increase, she noted that all the households comprise a wedded couple living in a HDB flat, mostly with children.

Other types of households, including divorced families, families with a foreign spouse, and single adults living with elderly parents may experience a more severe impact due to fewer offsets, she noted.

MP Faisal Manap also addressed the issue of groups who may feel left behind. These include lower-income motorcycle owners who rely on their vehicle for work and are struggling due to high Certificate of Entitlements (COEs) as well as single parents and divorcees who face more barriers due to public housing policy.