“Unlock our resource potential”
Mr Chairman,
Introduction
A1. Singapore faces increasing growth pressures.
i. Our population is ageing rapidly amidst intensifying competition for talent.
ii. We face fiercer rivalry for investments, as we navigate land and carbon constraints.
A2. To address these challenges, we will expand our resource potential through four strategies:
i. First, decarbonising our energy mix.
ii. Second, investing in our workers.
iii. Third, sustaining investments in research and innovation.
iv. And last but not least, enhancing land productivity.
Energy & Carbon
B1. I will first update on our decarbonisation efforts.
B2. Singapore has committed to achieve net-zero by 2050.
As SM Teo said, Singapore is a climate realist.
The timeline for climate action is set by nature, not geopolitical developments.
Moreover, our decarbonisation initiatives are an important factor in companies’ investment decisions.
We owe it to our children and our grandchildren to stay the course.
Importing Low-Carbon Electricity
B3. Cross-border electricity trading is crucial to achieving our climate goals.
We are working towards progressing the first batch of electricity import projects with Conditional Licences, to reach Final Investment Decisions.
These projects are win-win collaborations that lay the groundwork for our shared aspiration of an ASEAN Power Grid within the region.
They create jobs and underpin new investments for the source country.
Given the substantive progress that we have made, we have raised our imports ambition from 4 GW to around 6 GW by 2035.
Harnessing Solar Energy
B4. Concurrently, we will maximise our domestic solar potential.
As SM Teo has also shared, we achieved our 2025 deployment target of 1.5 gigawatt-peak (GWp) ahead of schedule.
This puts us on track to achieving our 2030 target of at least 2 GWp.
B5. Scaling beyond the 2 GWp is challenging, but we will continue to encourage homeowners and building owners to install solar panels, and push the boundaries of domestic deployment.
i. For example, the SCDF has worked with industry stakeholders, including through the Alliance for Action (AfA) on Business Competitiveness, to simplify regulatory processes.
ii. The simplified processes exempt more than half of all solar PV installations on metal-roofed buildings from fire separation requirements, allowing eligible building owners to save up to 30% on total construction cost.
Exploring Low-Carbon Alternatives
B6. Electricity imports and solar energy alone are insufficient to get us to net-zero.
We need to explore every possible decarbonisation pathway.
B7. Nuclear.
Nuclear energy, especially advanced nuclear reactors, is an option that we are seriously studying for potential deployment.
Let me address Mr Sharael Taha and Ms Jessica Tan’s questions clearly – we have not yet made a decision on deployment.
It is therefore premature to speak on potential sites, costs and specific plans.
B8. Our current priority is to accelerate capability building on nuclear safety and advanced nuclear technologies.
We are training more nuclear scientists, such as via postgraduate scholarships in nuclear science and engineering.
B9. We are also stepping up on international partnerships.
Last year, we signed a substantive civil nuclear agreement with the US.
This complements our ongoing cooperation with partners, such as the International Atomic Energy Agency, France’s Institute for Radiological Protection and Nuclear Safety, and the Emirates Nuclear Energy Company.
B10. Hydrogen.
Mr Saktiandi Supaat asked about our plans for hydrogen.
Hydrogen indeed has the potential to be a low-carbon fuel for the future, although high adoption costs and technical challenges remain today.
In the near-term, our focus is similarly on capability building.
By the end of this year, EMA and MPA aim to identify a lead developer for a pilot project to use ammonia for power generation and maritime bunkering.
B11. Carbon Capture and Storage.
We are also exploring complementary solutions to decarbonise the hard-to-abate sectors.
Carbon capture and storage technologies are advancing quickly.
We will engage emitters and potential service providers to develop the CCS value chain, and partner countries with suitable geological storage sites.
We have made progress by signing a Letter of Intent with Indonesia in 2024 and an MOU with Malaysia in 2025.
B12. Carbon Credits.
Mr Edward Chia and Ms Tin Pei Ling asked for an update on our carbon markets initiatives.
As SM Teo mentioned, Singapore just signed an Implementation Agreement with Bhutan, in addition to our agreements with Ghana and Papua New Guinea.
These Agreements establish the framework for the transfer of Article 6 carbon credits, which is aligned with our environmental integrity criteria.
MTI will also be launching a Request for Proposals to procure Article 6-compliant carbon credits later this year.
Ensuring a Secure Power System
B13. As Mr Saktiandi Supaat pointed out, natural gas will continue to play a crucial role in our energy mix.
And that is why we will set up the central gas procurement entity for the power sector this year and complete the development of our Second LNG Terminal by this decade.
These will secure our natural gas needs for the foreseeable future.
Facilitating the Energy Transition
B14. We will calibrate our speed of adoption for energy technologies and solutions.
For the less mature solutions, we will strengthen research efforts and accelerate commercialisation.
We will commit $62.5 million for A*STAR to develop a Low-Carbon Technology Translational Testbed (LCT3) that will support companies in scaling up low-carbon solutions closer to commercial development.
International and local players, like IHI Corporation from Japan and CRecTech, a local company, have already expressed interest to use LCT3.
B15. For commercially mature solutions, we will accelerate their deployment.
As Mr Saktiandi Supaat highlighted, this includes making major infrastructure investments for a low-carbon future.
To save up for these investments, we are topping up the Future Energy Fund by $5 billion.
B16. We have not disbursed monies from the fund, as it is still early days in our infrastructural development journey.
However, we anticipate significant drawdowns once key technological and commercial thresholds are crossed.
To address Mr Sharael Taha’s question, the FEF can also be used to fund studies for the deployment of low-carbon energy infrastructure, including those needed for small modular reactors.
B17. To better inform our decisions as we decarbonise, A*STAR is developing an integrated model to simulate the interdependencies of the possible net-zero mitigation measures.
Ensuring Cost Competitiveness
B18. Members have voiced concerns about the potential impact of decarbonisation on energy costs.
Our aim is to strike the right balance between decarbonising towards net-zero, ensuring, at the same time, our energy security, and maintaining cost-competitiveness.
B19. For households, we will continue to provide support through measures such as U-save rebates.
For businesses, we will co-fund investments in energy efficiency through initiatives like the Energy Efficiency Grant.
B20. Furthermore, we will fully rechannel carbon tax revenue collected towards decarbonisation efforts.
We do not expect, therefore, to derive additional net revenue from the carbon tax in this decade.
Manpower
C1. Next, on manpower.
As we decarbonise, we will continue to upgrade the skillsets of our workforce.
This is particularly crucial for workers in energy-intensive sectors such as the petrochemicals industry, who will be more impacted by the green transition.
Many already possess core skillsets that allow them to take on new job opportunities in adjacent growth segments like specialty chemicals, or those in the sustainability space.
We will also support workers via Continuing Education and Training efforts, or CET, as well as Career Conversion Programmes.
C2. Beyond the green transition, CET will remain a key enabler to deepen Singaporeans’ skills in response to digitalisation and AI.
In fact, government spending on CET initiatives in FY24 is projected to amount to over $1 billion.
We will continue to work with companies and Institutes of Higher Learning (IHLs) to support workers in upskilling and attaining better wage outcomes.
i. One prime example is EDB’s collaboration with industry and the Singapore Institute of Technology on an Electrical and Electronics Engineering degree for in-employment diploma holders in Manufacturing roles.
ii. This CET degree follows best practices in adult education by recognising prior learning and work experiences and allowing qualifications to be stacked towards a degree.
Learners can also access recorded lessons and online consultations, so that it is easier for them to juggle work and study.
C3. CCPs can also support the reskilling and redeployment of employees.
Mr Mark Lee would be pleased to know that WSG’s CCPs already support this redeployment of existing employees post-merger.
Moreover, since 1 April 2024, WSG increased the monthly salary support cap from $6,000 to $7,500 for eligible workers with up to 90% of salary support.
C4. Now, even as we develop Singaporeans, we must attract global talent that can complement our local workforce.
We have concluded agreements with both Indonesia and Vietnam to facilitate the exchange of tech and innovation talent.
i. The Tech:X pilot with Indonesia was launched in July 2024, while the parameters of the Innovation Talent Exchange programme with Vietnam were launched in September 2024.
ii. Nearly 50 companies and 50 Singaporeans have expressed interest across both programmes.
iii. Our young leaders will have greater exposure to regional economies.
And companies will find it easier to access mobile talent.
C5. Collectively, this two-pronged strategy of supporting Singaporeans and attracting global talent will keep our workforce globally competitive.
I will elaborate on how our efforts have supported good employment outcomes for Singaporeans later at MOM’s COS.
Research and Innovation
D1. Third, on research and innovation.
We must continue developing an innovation-led economy, as DPM Gan has shared.
D2. This is why Singapore invested $28 billion under the Research, Innovation and Enterprise (RIE) 2025 plan.
Ms Foo Mee Har asked how we will drive research translation and support the development of our semiconductors and biotech sectors.
i. Last week, DPM Heng announced upcoming initiatives such as the RIE Flagship to advance semiconductor R&D, and the RIE Grand Challenge focusing on healthy and successful longevity.
ii. These complement the existing R&D translation platforms available.
iii. One such platform is A*STAR’s MedTech Catapult, which provides infrastructure, expertise, and connections to local contract manufacturers looking to develop frontier medical devices.
I attended the launch event last month and was happy to know that more than 10 companies have applied to this initiative.
iv. Besides this, the NSTIC (R&D Fab) for advanced packaging in semiconductors, which DPM Gan shared earlier, is another R&D translation platform that A*STAR will be rolling out.
D3. Such investments enable more firms to produce cutting-edge technologies, create good jobs, and maintain Singapore’s competitiveness.
i. The GDP contribution from firms with R&D activities grew from around 15% of GDP to 24% over a 10-year period from 2012 to 2022.
ii. The number of R&D jobs increased by 7.6% from 2021 to 2022.
To address Ms Foo’s question on securing the talent pipeline for our R&D facilities, we are bringing in top talent who contribute to the ecosystem.
During COS 2023, I shared about Professor Watson, a ONE PASS holder, who took on the Executive Director role at A*STAR Skin Research Labs and the Skin Research Institute of Singapore.
Professor Watson has since strengthened A*STAR’s global standing, by partnering with the National Skin Centre and Sanofi to trial a first-of-its-kind acne vaccine and deepen understanding of key biological markers that impact the severity of the condition.
D4. These are signs that our efforts are bearing fruit, and we will invest further.
PM announced during Budget that we are refreshing A*STAR’s biomedical research infrastructure by extending it to the greater one-north area.
This is an approximately $500 million-effort, which will strengthen our biomedical R&D ecosystem in two ways.
i. First, A*STAR will be located closer to key partners like the National University Health System (NUHS) clinical community and venture builders, making it a new attraction point for both industry players and talent.
ii. Second, A*STAR will redesign its laboratories and workspaces to promote interdisciplinary collaboration across the different research institutes.
It will do so by providing more centrally-managed collaboration spaces that allow for better integration of expertise across teams.
D5. A*STAR will also introduce new biopharma manufacturing programmes with its partners – the Singapore Cell Therapy Advanced Manufacturing Programme 2.0 (STAMP 2.0) and the Process Accelerator for Cell Therapy Manufacturing (PACTMAN).
i. Cell therapies such as CAR-T have transformed treatment for certain blood cancers and demonstrated promise for autoimmune diseases, but they remain complex and expensive to manufacture.
ii. Since 2019, STAMP has partnered biotech companies to improve the quality testing of cell therapy assets, conduct CAR-T therapy trials in Singapore, and enable licensing and spinoffs of new technologies.
iii. STAMP 2.0 will build on this to develop lower cost manufacturing technologies that can produce higher quality products.
For example, it aims to reduce the time taken for cell extraction, modification and infusion into patients, what we call the vein-to-vein time.
iv. Meanwhile, PACTMAN will develop scalable processes to accelerate the translation of cell therapies, including those developed through STAMP, from lab to clinic.
D6. Taken together, these efforts will deepen our R&D capabilities and drive innovation-led growth.
Land
E1. Lastly, on land policies.
We support businesses to intensify land use and to be more productive.
E2. We will extend and enhance the Land Intensification Allowance (LIA) scheme, to unlock new industrial space.
i. Companies receiving the LIA approval during the next five years will continue to enjoy tax allowance on the full qualifying costs over 15 years.
ii. From 2026, we will make it easier for companies to qualify for LIA, so that they can optimise space and integrate operations with related businesses.
Building users and LIA recipients can be considered related if they own more than 50% shareholding of each other. This is down from the current threshold of at least 75%.
E3. JTC will also introduce four initiatives to provide greater flexibility for companies.
These initiatives support the recommendations from the AfA on Business Competitiveness and the work under the Inter-Ministerial Committee for Pro-Enterprise Rules Review.
i. First, companies with new leases on greenfield industrial land will be offered additional three years of lease tenure to cover the development and the building period.
This will allow companies to enjoy the full duration of the lease with their completed development.
ii. Second, high-performing companies will have more flexibility to extend their leases in shorter periods, for incremental business investments.
JTC will introduce a new 5-Year Flexible Lease Extension Initiative (FLEXI), to give eligible companies on JTC’s 20-year leases the option to extend their leases by up to two tranches of five years each.
iii. Third, JTC will bring forward the lease renewal application period from the current six years, to ten years before lease expiry.
iv. And finally, JTC will broaden its definition of plant and machinery investments, which is a key criterion for lease renewal.
We will now recognise auditable investments in innovation, R&D, digital transformation, and IP creation.
Conclusion
F1. Chairman, in Mandarin please.
F2. 古人有言，‘富不过三代’。然而，新加坡自建国以来，因为历代国人的辛苦耕耘，已经成功迈入了第四代。现今处于这一代的我们，也应该秉持同样的精神，对未来世世代代的国人都有得交代。我今天宣布的措施将为新加坡的经济未来奠定重要的基础。
F3. Chairman, as we conclude, let us reflect on the enduring Singapore spirit.
For 60 years, we have thrived not despite our challenges, but because of them.
We have always been tight on resources, but we are never short on resourcefulness.
Our resource constraints have compelled us to be innovative, and brought us to where we are today.
For the next 60 years and beyond, I am confident that this same innovative spirit – as reflected in the bold steps we are taking today – will drive our continued growth, and secure a vibrant future for generations of Singaporeans.