OPENING ADDRESS BY MR S ISWARAN, Minister Of State for Trade and Industry, at THE 5th Annual Asia Biofuels Conference, WEDNESDAY, 12 December 2007, OLIVIAROOM, RAFFLESCITY CONVENTION CENTRE, 9.00 AM

A Very Good Morning to

Mr Ricardo Borges Gomide, Director of the Renewable Fuels Department, Ministry of Mines and Energy, Brazil

Distinguished guests

Ladies and gentlemen

Changing Energy Landscape

I am pleased to join you this morning for the Asia Biofuels Conference and Expo.Now into its fifth year, this is the first time that the Conference is being held in Singapore.I would like to extend a warm welcome to all participants, especially those who have come from overseas.I am confident that you will have an enriching conference and find opportunities to network with industry professionals and producers from Asia, Europe and the Americas, and to share updates on the biofuels sector.

The theme of this conference, “Economics and Market Commercialization of a Global Biofuels Industry”, is appropriate given the current global energy landscape, which has evolved dramatically in the last few years.The strong global economy, fuelled by the rapid growth of emerging markets like China and India, has resulted in skyrocketing crude oil prices.With the rising demand for energy, there is also a greater awareness of environmental concerns over climate change.

These driving forces have spurred countries to look towards alternatives beyond oil and gas to meet their energy needs. Biofuels have an important role to play in the global energy mix.Technological advancements have enabled biofuels to become an increasingly viable alternative to conventional sources of energy. In many parts of the world, biofuel has thus been included as a key component in the drive towards energy diversification.

Biofuels Strategy for Singapore

In Singapore too, we have outlined our energy policies to address this changing energy landscape.Last month, we launched the National Energy Policy Report, titled “Energy for Growth”.The Report details how Singapore’s energy policies will evolve to address the global energy challenges and to capitalise on the opportunities to sustain our long-term economic growth.

One key strategy highlighted in the Report is of particular relevance to the biofuel industry in Singapore, and that is the objective of pursuing growth opportunities in the energy industry and investing in energy R&D.Just as we have built the oil industry, which today is a comprehensive ecosystem contributing almost 5 per cent of our GDP, it is vital that we put in place strategies that ensure a robust, thriving and sustainable biofuels industry

When we started, we attracted investments in first generation biodiesel plants on JurongIsland.Companies like Peter Cremer kick-started the biofuel industry by leveraging on the availability of palm oil produced in Southeast Asia.

With this, we now have a foundation to trade biofuel in Singapore. We have thus far put in place the key enablers to help catalyse biofuel trading here.For instance, in order to create a more transparent market for biofuel trading, ICIS has set up price assessment platforms for biodiesel and bioethanol that are produced in Asia.

Leveraging on R&D to move our biofuels industry into the next generation

However, first generation biofuels derived from food crops have recently raised the controversy of food versus fuel.In Mexico, the diversion of corn to produce bioethanol has caused tortilla prices to skyrocket. In Southeast Asia, the price of palm oil has also exceeded US$900 per metric tonne, up from less than US$500 per tonne in January last year, due to the increase in demand for palm oil for biodiesel production. With the high prices of food crops and questions over the sustainability of biofuels, we believe that R&D in second generation biofuel technologies will be crucial for the industry to move forward.

In Singapore, we are committed to invest in biofuel research to develop and commercialise second generation biofuel solutions.The Agency for Science, Technology and Research or A*STAR launched its Energy Technology R&D Programme in May this year to embark on cutting edge R&D activities including bio-energy.In particular, the Institute of Chemical Engineering and Sciences, or ICES, has mapped out a roadmap to embark on biofuel and biochemical conversion research.Other research institutes, including the Institute of Environmental Sciences and Engineering and Temasek Life Sciences Laboratory, are also developing alternative biofuel feedstock such as jatropha and sweet sorghum. All these efforts will be important in addressing the sustainability of biofuel and its integration into Singapore’s chemical industry.

Two weeks ago, Neste Oil announced that it would build the world’s largest renewable diesel biorefinery in Singapore.With a capacity of 800,000 metric tonnes per annum, the planned biorefinery will be based on Neste’s proprietary NExBTL technology to produce renewable diesel.This investment in new-generation biofuel technology will be a tremendous boost to our drive to develop the biofuel industry.It is a concrete example of commercialisation of new biofuel technology in Singapore, and we expect more to come.

Conclusion

In this complex global energy landscape, we believe that biofuel is an important alternative energy source that is here to stay.I am confident that our biofuel strategies, in particular the heavy investment in R&D and advancing technology, will enhance Singapore’s competitive edge in the global biofuels landscape.

I am very happy that Singapore has been chosen to host this gathering of so many industry players and technology experts in biofuels.I am sure that interesting ideas will be exchanged on this platform and I wish all of you a fruitful conference.Thank you.