What is decarbonisation and what are Singaporean businesses doing about it?

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Decarbonisation is being mentioned non stop and for good reason. But do you truly know what it is? In this article we discuss what it is and what approaches Singaporean businesses are taking to deal with it.

Centropi is all about decarbonisation. Especially via energy-efficient LED lighting and water management upgrades. We believe that by providing you with unbiased easily understood information you will be more informed during your decarbonisation journey.

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What is Decarbonisation?

Every activity that occurs in your business will either require energy or have embedded energy, both of which have an associated amount of carbon emissions.

Decarbonisation is reducing or removing those carbon and other greenhouse gas emissions generated by the various activities and processes in your business.

What are the different types of Carbon Emissions?

In businesses, carbon emissions can be broken down into 3 types, Scope 1, 2 & 3.

  • Scope 1 emissions are direct emissions that are owned or controlled by a company
  • Scope 2 emissions are indirect emissions from the generation of purchased energy, such as electricity, steam, heating, and cooling.
  • Scope 3 emissions are indirect emissions that occur in the value chain of a company and include both upstream and downstream emissions.


Vehicle Usage (Scope 1)

When a company uses vehicles as a part of its everyday business, they will burn fuel (unless they are electrically powered). Burning this fuel is a direct result of the company's business activities and is therefore classified as a scope 1 emission. It is good to note that if the company does not own or operate the vehicle, it becomes a part of Scope 3 emissions.

Lighting (Scope 2)

Unless you are off-grid and produce all your electricity, you will rely on a 3rd party to supply it. Although you use the electricity to power your lights, the emissions associated with generating it are owned by the 3rd party. This is, therefore, an indirect scope 2 emission.

Paper (Scope 3)

Like the electricity in the scope 2 example, the paper used in your business will normally be manufactured by a third party (unless you are a paper company!). Therefore, the emissions associated with the manufacturing are not yours and are classed as scope 3 emissions.

What is the Government doing about decarbonisation?

Singapore has been actively addressing the issue of decarbonisation. It has implemented the Singapore Green Plan 2030 which sets out targets and guidelines for the entire population to follow.

To support this, the government has had various measures in place to monitor energy usage across the country so that it can take adequate steps to identify issues and plan for the future.

For example, the government made energy auditing and reporting mandatory. This allows them to monitor energy usage holistically and understand what the countries' demands will be in the future. It also proactively tracks the number of solar installations across the country.

What are Businesses Doing?

Although the government sets the targets and the plans, it's the businesses that need to take action to create real decarbonisation groundswell. So what steps are businesses taking?

#1 - Carbon Offsetting

Some businesses participate in carbon offset programs. This involves investing in projects that reduce or capture an equivalent amount of carbon dioxide to their own emissions.  

Carbon credits are essentially permission slips that allow the buyer to emit a specific amount of greenhouse gases. They are bought and sold in mandatory (or compliance) and voluntary markets. The former is created by law, while the latter functions voluntarily.

Singapore is encouraging its companies to join the voluntary carbon market.Here, a company or individual can voluntarily buy carbon credits from a specific project. The voluntary carbon market has encouraged significant investments in recent years, reaching a value of US$2 billion in 2021.


#2 - Energy Efficiency Measures

With rising taxes and fuel costs, many companies have taken far more interest in their energy usage and what steps can be taken to decarbonise. For many, this has firstly meant understanding the steps involved in decarbonising. By assessing their usage, adapting their facilities and then analysing their usage, many companies are implementing energy efficiency measures to reduce their overall energy consumption. This includes adopting energy-efficient technologies, upgrading facilities, and optimising energy usage in their operations.

#3 - Renewable Energy Adoption

According to the World Resources Institute, Scope 2 emissions account for about 60% of total emissions for the average company. So, some businesses are investing in or sourcing a significant portion of their energy from renewable sources.

Specifically in Singapore, solar energy via PPA has gained popularity as one of the most efficient ways to decarbonise operations. With no upfront costs, companies can instantly save money and reduce their carbon footprint.

#4 - Government Initiatives

Singaporean businesses were also influenced by government policies and initiatives encouraging sustainability. The government has introduced various programs and incentives to encourage businesses to adopt greener practices. Many of which significantly reduce the associated costs of undertaking energy-efficient upgrades in the interests of decarbonisation.

Singapore’s Climate Commitments

Both government and businesses must work together to achieve this goal, and as set out in the Addendum to Singapore's long-term low-emissions development strategy it is clear the collaboration is working!

The early and collective efforts of businesses, individuals and the Government have borne fruit. Singapore met our commitment to reduce emissions to 16% below business-as-usual (BAU) levels by 2020, made in 2009 ahead of the Copenhagen Summit, achieving a 32% reduction below BAU levels. In March 2020, we also submitted our first update to our 2030 NDC and our LEDS under the Paris Agreement. At that time, our LEDS pledged
to halve emissions from our 2030 peak to 33 MtCO2e by 2050, with a view to achieving net zero emissions as soon as viable in the second half of the century.

Source - Illustrative diagram of Singapore’s net zero emissions trajectory.

If you are ready to take the first steps to net zero or would like to know more please reach out to Ivan.

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