As Singapore gears up for Net Zero 2050, businesses are working towards sustainability measures, including reducing carbon emissions, and enhancing renewable energy production.
13 May 2023 9 min read
The climate crisis is dire, but consider this: Unravel Carbon, an AI-powered decarbonisation platform launched in 2022 and headquartered in Singapore, raised $10 million in less than four months during its seed round — the largest seed round ever raised by a climate tech start-up in Asia. It has even been accepted by Y Combinator, the start-up accelerator behind names like Airbnb, Stripe, Dropbox, and DoorDash.
Unravel Carbon is one of a slew of CO2-related companies that have popped up in recent years, but this is not surprising. Opportunity lurks in every challenge and Singapore is currently on a quest to reduce greenhouse gas emissions to net zero by 2050. In other words, the nation hopes to remove the same amount of carbon dioxide from the atmosphere as it produces. The means are varied, and the solutions are being scrutinised. After all, this is a new frontier.
keyboard_arrow_rightRead more about the role Singapore can play to support global and regional decarbonisation goals
Saving Earth is a big business. McKinsey & Company estimates that the global required investments to bring about necessary transformations could reach US$9.2 trillion (S$12.3 trillion) annually until 2050. Of this, low-emissions assets such as renewable energy sources and infrastructure — electric light rail systems, energy-efficient buildings, waste-to-energy plants, and the like — will account for US$6.5 trillion.
Meanwhile, the increasing demand for net-zero products and services across sectors like transport, power, and carbon management could generate more than US$12 trillion in annual sales by 2030. As the global economy shifts into battling climate change mode, businesses must adjust to changes in fundamentals.
Demand for environmentally-friendly solutions and practices will increase as will pressure to shift capital from high-efficiency to energy-efficient activities, balance supply and demand, and maintain cost competitiveness.
Singapore’s pursuit of net-zero emissions by 2050 still has a way to go. As of November last year, the nation was rated “critically insufficient” by Climate Action Tracker, which evaluates governments’ mitigation targets, policies, and actions. Out of 38 countries and the European Union, Singapore, Iran, Russia, Saudi Arabia, and Thailand performed the worst.
However, there is a strategy in place. The Singapore Green Plan 2030, launched in 2021, is a bold to-do list that marshals the entire country’s efforts towards quantifiable sustainability measures, including increasing vegetation and green spaces and producing more food locally, reducing waste and carbon emissions, and enhancing renewable energy production.
In the coming years, the nation aims to establish yet another “hub”, this time for green finance and carbon services in Asia.
Balancing the scales of carbon exchange
Credit: Co-Founder of Unravel Carbon, Grace Sai.
In preparation for Singapore’s carbon tax replacement by high-quality (think credible) international carbon credits in 2024, carbon exchanges have sprung up to facilitate companies buying and selling of credits to offset their C02 emissions.
AirCarbon Exchange (ACX), a collaboration with Singapore Sustainable Energy Association, has transacted over 17 million carbon credits since its launch in 2019. Project Marketplace, a digital platform that enables businesses and suppliers to list, compare, buy, and retire carbon credits (think reduction accomplished), was rolled out by Climate Impact X (CIX) last March. Established by DBS Bank, Singapore Exchange, Standard Chartered and Temasek Foundation, CIX aims to help instil greater confidence in the voluntary carbon market.
keyboard_arrow_right Discover how CIX leverages Singapore to build trust in carbon markets.
Unravel Carbon, which is already used in more than 20 countries such as Malaysia, Indonesia, Australia, and New Zealand, was launched to help large or medium-sized companies to measure, track, reduce and report their carbon emissions. Its AI-powered technology converts their accounting data into full supply chain carbon profile in just nine seconds, then suggests climate solutions towards net-zero company goals.
Says Grace Sai, Unravel Carbon’s Co-Founder: “Asia-Pacific is responsible for 60 per cent of global greenhouse emissions, and home to 70 per cent of global supply chains. There’s a lot of reduction opportunities on our home ground. By quickly realising this and planning business strategies around it, companies and countries gain a head-start in the inevitable low-carbon economy.”
Barriers and barrier breakers in the world of green businesses
Credit: Frank Phuan, Business CEO, EDPR APAC.
Green opportunities come with their set of challenges, too. Among them is cost, says Professor Boh Wai Fong, Deputy Dean of Nanyang Business School, Nanyang Technological University. “Research has revealed gaps between attitude, intention, and behaviour in this aspect — customers may not always be willing to pay more for environmentally friendlier products, services and solutions,” he explains.
The government, of course, has been generous with its support to bring everyone along for the ride. SMEs can now access green financing through a loan programme launched in 2021 that will co-fund up to 90 per cent of sustainable projects. Green loans worth $120 million have been disbursed for 30 projects and $180 million has been reserved for 6,000 or more enterprises. A number of other measures has even been added to the programme, including 70 per cent support for projects until March 2026. Furthermore, more than $60 million has been pumped into research and development addressing the impact of climate change on our living environment.
It also issued an inaugural sovereign green bond of $2.4b last year. This ensures that green bonds can be sold easily, without negatively impacting prices, and reduces their risk and volatility, thereby enhancing their appeal to buyers and sellers. This builds on more than $65 billion of green, social, sustainability, and sustainability-linked bonds and loans issued in Singapore between 2017 and 2021.
“Green hydrogen has been getting a lot of attention and we believe it is a key complement to electrification, especially for industries that are hard to electrify. Moreover, using green hydrogen to produce green ammonia also provides a sustainable and carbon-free fuel source for transportation, power generation, and industrial applications.
Last December, EDP Brazil produced the first molecule of green hydrogen. We are currently looking to expand this further in APAC. This is to support Singapore’s climate commitments to reach net-zero by 2050 and accelerate the energy transition for the APAC region.”
Support for green businesses
Such support comes in handy for young businesses such as GetGo. Launched during the pandemic in 2021, the car- sharing company worked hard to not only create consumer awareness but also efficiently and effectively maintain a growing fleet. The latter includes more than 2,200 vehicles, including 90 electric vehicles, scattered across 1,400 locations.
Capability development grants from the government allowed Co-Founder Toh Ting Feng and his team to build a seamless technology platform to simplify car access in Singapore. GetGo aims to have 10,000 fully electric and hybrid vehicles on the road by 2030.
keyboard_arrow_rightLearn more about how ASEAN has intensified efforts to drive the sustainable transformation and the region's clean energy transition.
Even bigger names have benefited from government support. When LHN Group, which transforms unused or underused facilities in Singapore into productive spaces, set up LHN Energy Resources in 2018 to provide sustainable energy solutions for the group’s internal energy demands, it received government subsidies that went towards technology development.
“That was instrumental to our operations,” says Kelvin Lim, Executive Director and Group Managing Director. “As a relatively new player in the renewable energy industry, LHN Energy had difficulties. These range from attracting talent for long-term growth to acquiring expertise to ensure smooth integration into our core space optimisation business.”
“Climate tech may well be the biggest investment opportunity of our generation.”
Beyond designing and installing PV (photovoltaic) systems for properties, LHN Energy Resources also offers EV charging stations across Singapore. Each is equipped with AC 7.4 kW/22kW chargers, which can be upgraded to a DC system. “Sustainability has become a critical element in both life and business, so we must broaden our offerings for clients and tenants,” says Lim.
GetGo continues to work closely with agencies such as HDB to make vehicles accessible to more residents as well as Land Transport Authority to develop the EV charging infrastructure. Adds Toh: “Expanding the EV charging infrastructure to support growing demands remains critical to the continued electrification of our fleet. It is heartening to see that the government has laid out an ambitious target of 60,000 charging points nationwide by 2030, including new ones in one-third of HDB car parks by the end of this year. These initiatives not only support businesses like ours to meet the increasing demand in EV usage, but also ease our journey towards going net zero.”
For Lim, frameworks such as the Singapore Green Plan 2030 can help businesses integrate sustainability into their daily operations. According to him, small but consistent efforts can lead to substantial reductions in carbon footprint.
The art of the pitching green businesses
Credit: Kathlyn Tan, Director of Rumah Group.
Singapore’s green businesses can also benefit from private investment. Unravel Carbon, for instance, raised $10m within four months of launch during its seed round led by Sequoia Southeast Asia, andGetGo received $20m from Treis Group in February 2023.
What factors do private investors consider when selecting projects? Kathlyn Tan, a Director at Rumah Group — which focuses on sustainable investments, communities, and the environment — has a portfolio that includes stakes in circular economy player Circulate Capital and food-technology fund Big Idea Ventures, says, “Climate tech may well be the biggest investment opportunity of our generation.”
In addition to the challenges associated with “traditional” businesses, green businesses face new-market development, greater reputation management, and a smaller investor pool. There is no longer a place for “business as usual” in the green market as it rapidly evolves. Early transitions will be beneficial to those who can do so.
According to Tan, how businesses position themselves — whether as a returns- first or impact-first investment, an impact- investment opportunity or an early-stage investment that addresses urgent needs — can also influence stakeholders’ responses.
“It takes more than a viable business model to remain resilient over the long term,” explains Tan. “New green businesses must keep products and services sustainable. Do team members align with the corporate mission? How do procurement policies and supply chains contribute to sustainable production? What partnerships are leveraged to maximise positive impact? It is important to consider these factors.”
keyboard_arrow_rightDiscover what stakeholders in Southeast Asia must act on to accelerate and scale green investment
With power, transportation, industry, and building and construction responsible for greenhouse gas emissions in Singapore, Professor Boh Wai Fong, Deputy Dean of Nanyang Business School, Nanyang Technological University, says these sectors will play an important role in our net-zero journey. The following businesses will benefit from substantial investment by both the public and private sectors:
- Renewable energy
- Electric vehicles
- Green buildings
- Circular economy
- Sustainable food