Unlocking a new competitive tool for Singapore: demand for low-carbon products

OVER my nearly three decades as a certified public accountant and consultant at a Big Four firm, I’ve heard time and time again that the right market conditions do not yet exist to incentivise emissions reductions, and that not enough buyers are purchasing lower-carbon products at the right price for companies to continue investing at scale in these businesses.

Singapore has long understood that competitive markets are among the most powerful forces for driving economic progress. The same logic applies to climate – but we’ve yet to harness it effectively.

Emissions are not falling at the pace and scale we need, because the markets for the highest-emitting products do not provide clear incentives to cut them. And these can’t be established until we have government-mandated standards that drive carbon intensity down and comparable, investment-grade data at the product level to support trade and compliance.

Singapore’s opportunity here is significant.

The port handles roughly 20 per cent of global container transhipment, serving as the world’s largest hub, with the subsequent carbon emissions reflecting its large operational scale. Addressing these emissions is central not only to environmental objectives, but also to Singapore’s long-term competitiveness.

Consider the scale: the 10 highest-emitting industrial products – marine fuel, jet fuel, electricity, steel, diesel, petrol, cement, natural gas, aluminium and ammonia – account for the bulk of global energy-related emissions. In 2024 alone, Singapore supplied nearly 55 million tonnes of marine fuel.

To change the trajectory, we need innovation focused on driving demand for lower-carbon products, and robust data to underpin markets and regulation.

This is impossible without policy intervention. Fortunately, we know product-level regulation works, because it has worked before, including right here in Singapore. When the International Maritime Organization introduced the 2020 global sulphur cap, shipping companies adapted, fuel suppliers innovated and the market shifted.

Today’s disclosure systems have made corporate climate reporting mainstream – strengthening transparency and accountability.

While that progress remains essential, the next phase should build on these systems with new, complementary tools that operate at the level where markets actually function: products moving through supply chains.

The existing frameworks were not designed to enable companies to differentiate, and markets to reward, lower-carbon products.

We need a system that supports granular, verifiable tracking of carbon emissions related to products. This should enable carbon to be accounted for through the supply chain in the same way as financial metrics such as revenue or cost.

Importance of carbon emissions data and clear market rules

Markets excel at driving change when two conditions are met: accurate information and clear rules. These are what have created functioning capital markets and booming trade.

Starting with detailed data is essential. When consumers or businesses buy a product, they expect to know its full ingredients – that’s the baseline for efficient commerce. A growing number of businesses want to apply that rigour to carbon measurement.

Without that transparency, buyers can’t make informed choices, investors can’t allocate capital efficiently, and producers investing in lower-carbon products can’t monetise their efforts. Nor can governments set effective standards.

Because there is no comparable, verified product-level data, a maritime fuel supplier investing in lower-carbon solutions or a commodities trader routing capital towards such products cannot easily identify these products’ associated carbon emissions in a way that is consistently recognised across markets.

The need for market incentives is precisely why leading companies are advocating for two fundamental conditions required for markets to drive meaningful change.

First, precise investment-grade, product-level carbon emissions data: a globally accepted carbon accounting framework that tracks emissions with the same rigour and consistency as financial accounting – so that consumers know exactly how much carbon is embedded in a specific product from a specific producer.

Second, clear rules: government-mandated product-level carbon intensity standards for major products that set clear maximum emission levels per unit throughout the value chain – whether per tonne of marine fuel, per tonne of steel or per watt of electricity – so that buyers and sellers both have incentives to act.

These two conditions work together to harness competition: Companies race to find the most cost-effective ways to meet requirements, driving innovation faster than any subsidy programme. And investors benefit from certainty about the road map to the future.

When governments set clear carbon intensity standards grounded in investment-grade data, capital can be allocated with greater confidence and consistency across jurisdictions.

For Singapore’s financial institutions – which increasingly anchor regional climate investment strategies – that consistency is foundational. Today, cross-border investments in lower-carbon production are risky bets. Tomorrow, they could be table stakes.

The current approach of putting pressure on the system to drive emissions reductions is not driving change fast enough.

Progress can accelerate if markets have the infrastructure to reward it. When we build that infrastructure – accurate measurement plus clear standards – we will finally align climate goals with business reality.

The writer is chief executive officer of Carbon Measures, a global coalition of businesses advocating for accurate carbon accounting and product-level emissions standards. She previously served as global vice-chair for sustainability at EY.