Carbon industry experts have identified investments in energy efficiency projects as the biggest potential for Singapore’s energy landscape.
The country’s National Environment Agency’s Climate Change Programme assistant director Adrian Tan said on Thursday that an increasing number of companies are harnessing the potential of these small-scale projects despite their yielding significantly lower carbon credits than large-scale lucrative natural energy projects.
Carbon credit projects are validated by the United Nations under its Clean Development Mechanism (CDM) scheme.
The traditional projects that tap on natural energy, such as hydro, solar, and wind, are “few in the
market and will run out soon,” said Mr. Tan. He believes that most countries will turn to energy efficient solutions in the next few years.
“This would greatly benefit Singapore as it is well poised to enter this segment of the energy market given its perpetual search for and development in sustainable energy,” said Mr. Tan.
The global carbon trading market has grown tremendously in recent years and is estimated to increase from US$143 billion in 2008 to US$1.9 trillion by 2020.
To date, over 77 per cent of CDM projects are registered in Asia, representing a total of more than 360 million CER units. CER are certified emission reductions, the industry name for carbon credits.
“If you look at the market just around Southeast Asia, all the projects are sitting out there,” said Edwin Khew, chief executive officer and managing director of IUT Global, a waste technology and management company. “It would be something that Singapore could tap into straight away.”
“We have the expertise required globally in terms of technology, project management, funding and legislation; and even the presence of all the carbon players are here too,” continued Mr. Khew, who is also the chairman of Sustainable Energy Association of Singapore (SEAS).
According to the Economic Development Board (EDB), Singapore has attracted more than 30 carbon-related companies to date, compared to 10 companies just three years ago.
Recent key players include Gazprom, e-on, Sindicatum Carbon Capital and Carbon Conservation, all of which are leading multinational corporations in the carbon industry that have chosen Singapore as a base from which to develop projects in the region, revealed EDB.
EDB’s director of Clean-tech and Urban Solutions, Goh Chee Kiong, believes that Singapore’s carbon industry is still in its infancy and has yet to tap its potential as a connector within the regional market.
A prime example is Singapore’s prospective role as intermediary for projects generated by Norway’s recent US$1 billion agreement with Indonesia to help reduce forest degradation.
“There is a huge potential in the market of carbon credits in avoided deforestation,” said Mr. Goh, who has already received interest from a range of companies seeking to get involved.
Mr. Goh also noted that Europe will continue to source for credits in Asia, and Singapore has a complementary role to play in that process.
The speakers’ optimism of the carbon industry was not restricted to Singapore. Experts agree that carbon-related projects will happen region-wide regardless of the outcome of the upcoming UN climate change talks in Cancun.
Climate Resources Exchange’s managing director Vinod Kesava felt that the carbon price will rise as countries and companies increasingly embrace the concept of having a low-carbon economy.
“The carbon markets are certainly here to stay and CDM buyers are still very ‘gung-ho’ about these projects,” added Mr Kesava.
Carbon Forum Asia is an annual event that brings carbon industry experts to Singapore to discuss industry issues.
