Mr Saugata Saha, President, S&P Global Commodity Insights,

 

Distinguished Guests,

 

Ladies and Gentlemen,

 

 

Introduction

 

1. Good morning. It is my pleasure to be here at the Asia Pacific Petroleum Conference (APPEC) 2023. A very warm welcome to all delegates joining us from around the world. I believe we will see 1,000 delegates, out of which I believe more than 500 are from overseas.

 

Strengthening Singapore’s position as Asia’s Energy Trading Hub by seizing green growth opportunities

 

2. As Asia’s leading oil trading hub and the third largest in the world, Singapore draws companies from all over the globe to base their operations here. Today, we continue to see a healthy flow of energy and chemicals companies seeking to expand their global footprint from Singapore. For example, the Abu Dhabi National Oil Company (or ADNOC), one of the world’s leading energy companies, established their trading office in Singapore to oversee the company’s trade of crude and oil products in the Asia Pacific Region. Our thriving oil trading scene is also why we are privileged to have so many industry leaders and key market participants gathered here for APPEC 2023.

 

3. While the world currently faces rising energy prices, geopolitical tensions and market volatility, these unprecedented challenges also bring new opportunities.

 

a. The increased energy risk has spurred many companies to invest in energy resilience and develop capabilities in green solutions. Engie Energy Marketing Singapore, for example, has expanded their offerings to support regional clients in their decarbonisation efforts. This includes providing solutions such as green Power Purchase Agreements (PPA), Renewable Energy Certificates (RECs), carbon offsets and green gas.

 

b. Many companies are also growing new capabilities and functions in Singapore to seize green growth opportunities in the region. The Prax Group, an independent global energy company headquartered in the UK, has established its regional headquarters in Singapore to trade biofuels alongside traditional fuels, to support the global rise in demand for low carbon fuels. As one of the largest biofuels blenders in Northwest Europe, The Prax Group’s Singapore office will serve as a key node in sourcing biofuels feedstock from Asia.

 

4. These developments are a testament to Singapore’s commitment to driving a resilient and sustainable energy future, and widening  our appeal as a global trade hub. Just last year, we launched our  Trade 2030 strategy, which aims to grow the value of our exports to S$1 trillion and double offshore trade to US$2 trillion by 2030. To achieve this, we have put in place initiatives in key focal areas such as talent development, innovation and sustainability.

 

Singapore is well-positioned to support and grow new trade flows for renewable fuels such as biofuels

 

5. One of our key goals and focus is to grow new trade flows for renewable fuels. The global energy transition and our 2050 net-zero ambition will continue to spur greater demand for greener fuels. Singapore is well poised to facilitate and grow these new flows.

 

a. For example, in the area of biofuels, Singapore is located near regional feedstock resources and home to a growing network of counterparties. Over 60 companies, including energy majors such as ExxonMobil and Repsol are taking hold of this advantage by trading biofuels from Singapore.

 

b. Singapore’s efficient refining and processing capabilities, as well as robust maritime infrastructure, allows us to import biofuels for refining and re-export. This synergy presents an opportunity for Singapore to develop strengths in both biofuels processing and trading, and solidify our position as an energy hub.

 

6. In fact, Singapore has made good progress in adopting renewable fuels in the aviation and shipping industries.

 

a. Singapore Airlines has been leading the way by piloting the use of blended Sustainable Aviation Fuel (SAF) for all its flights. Under this pilot, 1,000 tonnes of neat SAF are supplied by Neste and blended with refined jet fuel at ExxonMobil’s facilities in Singapore at Jurong Island.

 

b. The recent expansion of Neste’s Tuas South refinery has resulted in a doubling of its production capability in Singapore to 2.6 million tonnes per year, of which up to 1 million tonnes of SAF can be produced. This has further strengthened our position as the world’s leading SAF producer.

 

c. In the shipping industry, the Maritime Port Authority of Singapore (MPA) has been taking active steps to facilitate the use of cleaner fuels such as LNG, biofuels, ammonia, hydrogen and methanol to drive decarbonisation efforts. To date, over 140,000 tonnes of biofuels blends have been supplied across more than 90 biofuels bunkering operations.

 

7. To facilitate the transition to cleaner fuels, we are also exploring further opportunities in biofuels, and working on harmonising standards to reduce barriers to the trade of biofuels.

 

a. The Ministry of Trade and Industry (MTI) and the National Climate Change Secretariat (NCCS) have called for a tender to examine potential sources of biofuels and natural renewables, such as food waste and animal fats, locally and abroad. This could help Singapore secure more sources and types of biofuels.

 

b. In consultation with industry and researchers, the MPA has also developed a provisional biofuel standard on the specification of marine biofuel for blends up to 50 per cent. As there is presently no international standard for the quality of biofuels for bunkering, this provisional national standard aims to support the growth of biofuel bunkering and facilitate the adoption of greener fuels to meet our net-zero goals.

 

Singapore has built a robust carbon services ecosystem to support regional needs

 

8. Singapore has made significant strides in our development as a regional carbon services and trading hub. We have built a strong ecosystem by anchoring key players in Singapore. Today, we have over 100 entities providing carbon services, marking the highest concentration of such service providers in Southeast Asia. This includes international organisations such as the International Emissions Trading Association (IETA), which set up its Asia hub in Singapore in June this year.

 

9. Singapore is catalysing the development of credible carbon markets, particularly on the Article 6 front. Some of you may remember that Singapore actively co-facilitated Article 6 negotiations at COP26 and COP27.

 

10. With the establishment of the Article 6 rulebook, we are now actively fostering international partnerships and have signed an MOU (Memoranda of Understanding) with close to 15 countries. We are also negotiating legally binding G2G Implementation Agreements on the transfer of Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 of the Paris Agreement. We believe that the generation of Article 6 carbon credits through our G2G agreements will not only serve domestic needs but also meet regional as well as global needs.

 

 

Conclusion

 

11. Singapore has made significant progress as a key trading hub for the energy sector and also in carbon trade and services. We are strongly committed to working with companies to navigate the global energy transition and will continue to embrace innovative and sustainable low-carbon solutions for a brighter future, striking a good balance as we navigate this energy trilemma to secure energy security, energy affordability and energy sustainability.

 

12. To this end, we are very happy to host conferences like APPEC, which provide a vital platform for industry partners and thought leaders to convene, discuss policy developments, and explore fresh market opportunities.

 

13. I wish all participants a fruitful conference, and am confident that you will gain new connections, valuable partnerships and useful insights at APPEC 2023. Thank you.