Plans for Marine and Offshore Engineering Sector, Singapore's Carbon Utilisation and Storage, and Low-carbon Hydrogen Sector

Dr Tan Wu Meng asked the Minister for Trade and Industry (a) whether the Ministry has done any assessment of the low-carbon hydrogen sector; (b) if so, what is the current state of the art for hydrogen transportation by carrier; (c) at what point will carrier-transported hydrogen become commercially viable; (d) what is Singapore's potential to be a hydrogen hub; and (e) whether moving ahead of market shifts may be considered as a strategy.

Dr Tan Wu Meng asked the Minister for Trade and Industry (a) whether he can provide an update on the current state of carbon capture, utilisation and storage (CCUS); (b) what are the respective conservative and optimistic assessments of potential CCUS technological advancements in the next decade; and (c) what role can incentives play to improve CCUS commercial viability for purposes of deployment in the petrochemicals sector.

Climate change is an existential challenge for Singapore. In March 2020, Singapore submitted our enhanced 2030 Nationally Determined Contribution and Long-term Low Emissions Development Strategy, or LEDS. One of our key thrusts under LEDS is to adopt advanced low-carbon technologies, such as carbon capture, utilisation and storage, or CCUS, and low-carbon hydrogen, to decarbonise our economy.

For CCUS, a small number of pathways are at a technologically advanced stage, but it requires further development to be commercially viable in Singapore.

A key pathway is carbon capture and storage, or CCS. We are seeing more large-scale projects being developed with government support internationally. This includes Project Longship1 and PORTHOS2 in Norway and the Netherlands respectively.

However, Singapore faces challenges in deploying CCS domestically, including a lack of any known geological formations that are suitable for the permanent storage of carbon dioxide underground. We are, therefore, exploring partnerships with companies and other countries with suitable geological formations to enable carbon dioxide storage opportunities.

We are also exploring carbon capture and utilisation (CCU) pathways, where carbon dioxide is captured and converted into waste-based feedstocks or natural minerals that can be used to produce aggregates for reclamation or building materials in the form of building materials. There are a number of companies developing testbeds for use in Singapore and examples of commercial-scale operations in other countries.

Captured carbon dioxide may also be used to manufacture synthetic fuels and chemicals, such as kerosene and methanol, which can be used as aviation and marine fuels. However, most pathways for synthesising fuels or chemicals from carbon dioxide are not mature and they are relatively nascent. Though some are at demonstration or post-demonstration stage, they can be expensive compared to conventional production, while others remain at scales that are still within the lab; so, it is still at lab-scale. Some also require significant amounts of energy in the form of low-carbon hydrogen, which will take some time to become cost-competitive with other conventional sources of energy.

Low-carbon hydrogen is a key technology for Singapore to decarbonise. A recent feasibility study commissioned by Government agencies and published in June this year concluded that hydrogen has the potential to decarbonise maritime, electricity generation, heavy transportation and some industrial processes. However, until CCUS is commercially viable, Singapore cannot produce low-carbon hydrogen at scale. Hence, we are exploring a range of other supply pathways.

The key challenge with scaling up the supply of hydrogen is the very high storage and transportation costs. Hydrogen, as most of you would know, is a gas with a boiling point far lower than natural gas. It is, therefore, a significant engineering challenge to transport and to store hydrogen in a commercially viable manner. To overcome this problem, the industry is working on different hydrogen carriers, each with its advantages, but also with its challenges to overcome.

These transportation options include ammonia. Supply chains exist today for ammonia, but ammonia is currently not produced using low-carbon methods or shipped in quantities required of an energy carrier. Burning ammonia also releases noxious oxides. To avoid this, we need to first liberate the hydrogen in ammonia, which would require a lot of energy. So, it is, by itself, an energy-intensive process.

Liquid Organic Hydride Carriers (LOHCs), which allow storage and transport of hydrogen at ambient conditions, are less hydrogen-dense, but this means a relatively higher cargo footprint would be needed to import the same amount of hydrogen. The process required to release hydrogen from these LOHCs can also be land- and energy-intensive.

The third form, liquefied hydrogen, is where hydrogen is transported in its natural form. The process to liquify hydrogen for transport is, again, very energy-intensive and the technology for the large-scale shipping of liquefied hydrogen is relatively nascent today.

There is currently no global consensus on which carrier form of hydrogen might dominate in the future, or when long-distance transport of hydrogen and the processes to liberate hydrogen from carriers might become viable.

Singapore is keen to realise the decarbonisation potential of hydrogen and to develop into a regional hydrogen hub. Government agencies will continue to monitor the technological and market developments to ensure that Singapore maintains its competitiveness.

Additionally, we will continue to collaborate with companies and the research community on Research, Development and Demonstration (RD&D) projects and testbeds for CCUS solutions as well as low-carbon hydrogen. Last year, we launched a $49-million Low Carbon Energy Research (LCER) Funding Initiative for the next five years to improve the technical and economic feasibility of low-carbon technologies.

At the same time, we are collaborating with international partners to further the development of low-carbon technologies, both in RD&D and the development of supply chains. We have signed an MOU with Australia on cooperation in Low Emissions Solutions and an MOU with Chile on Low-carbon Hydrogen Collaboration and we have just signed an arrangement regarding Collaboration on Low-carbon Hydrogen with New Zealand as well. We look forward to more partnerships and to leveraging them to capture new opportunities from emerging technologies.

Dr Tan Wu Meng also asked specifically about the Industry Transformation Map (ITM) of the marine and offshore engineering (M&OE) sector. Agencies are updating the ITM to take into account the impact of COVID-19 and the implications of a low-carbon transition and we target to launch a refreshed ITM next year. We expect offshore renewables and offshore carrier transport of hydrogen to be among the areas of opportunity in the refreshed ITM.

I thank the Minister for his sustained exposition on the topic. And if I may sustain a couple of supplementary questions as well on this issue. Let me start, first, by declaring that I am an adviser to the Shipbuilding and Marine Engineering Employees Union. And my supplementary questions are as follows.

On the first point, the Minister spoke about how there are currently significant constraints regarding the deployment of clean hydrogen and its transport. Some of these constraints appear to be specific to the origin, as well as the destination – the liquefaction and then the subsequent gasification at the destination.

However, I would like to ask the Minister whether he sees, at some point, opportunities arising further in the transport of liquid hydrogen. I understand that there are some prototype developments from the Japanese in this sector and even as we explore opportunities for the Offshore and Marine Engineering sector, I wonder if the Ministry is looking at ways to keep our industry ready in the event that some of these new modalities and technologies start to become commercially viable.

Secondly, I would also like to ask the Minister, in terms of the changing environment regarding sustainability practices around the world, we see a situation where sustainability is, increasingly, a criterion for access to markets. How will these developments he has outlined maintain Singapore's competitiveness and access to markets around the world?

Sir, I thank the hon Member Dr Tan Wu Meng for his questions. With regard to the opportunities arising from the transport of hydrogen, certainly, we do not rest on our laurels. If anything, given how we have gone through the last many decades, first, as a petrochemical, oil and gas centre of excellence for the last five decades, as we pivot into sustainable fuels into a low-carbon emission strategy, we envisaged that our strategic hub status we will continue to pivot. We will continue to leverage on what we have built thus far to become the crossroads once the transportation of liquid hydrogen or, for that matter, even in the trading of electrons, electricity. We can envisage that it is one market that we think we can leverage and become the hub in this entire region. Certainly, it is one of those initiatives that we are driving and actively looking at.

Today, a number of technologies are quite nascent, even though they hold a lot of promise. There is option value in exploring and studying which is the likely initiative that is going to give us maximum benefit and maximum economic value. So, it is one of those things where we look at the myriad of opportunities that are available, the research and development, and we are plugged into many of these research initiatives; and once we are able to land and the vision gets clearer in terms of where each one of these technologies is moving, I think we will be able to leverage and extract the synergies that can help move us ahead.

With regard to the changing environment and the access to markets, if you look at where we are, how we are pivoting our entire oil and gas sector, we are looking at more sustainable development in terms of the fuels that we are in. Two big companies have come and invested in our country. One of them is Neste and the other one is Arkema. We are now looking at the production of sustainable aviation fuels as well, although, again, the technology is relatively nascent. It costs a lot more to pivot from existing fuels and natural gases to go into sustainable aviation fuel, but it is one of those things that we cannot ignore as well. There are separate initiatives that drive that part of it.

With regard to hydrogen today, it is very difficult and it is very, very expensive and it is not very productive, not very efficient for us to produce green hydrogen, which is the cleanest form of hydrogen in Singapore, because we are geographically disadvantaged. We would need renewable energy to produce this hydrogen here, locally.

Hence, we have decided to adopt a strategy where we look at blue hydrogen, which is a low-carbon form of hydrogen, and how we can import it and then look at liberating that hydrogen from here.

These are various initiatives that we are looking at and I take Dr Tan Wu Meng's point to heart. We will not rest on our laurels. We will actively seek out the best, the most cost-effective way, whilst taking into consideration our NDC commitment targets to establish ourselves as a hub in this region.

Thank you, Sir. Could I just ask, with these new exciting developments in hydrogen and CCUS, if they do become feasible, whether we are also then reviewing our projections on when we can reach net zero emissions? So, if hydrogen CCUS becomes visible, maybe can we reach net zero by 2050?

I thank the hon Member, Mr Louis Ng, for his very thought-provoking question. Today, our plan is to halve the emission by 2050 and to reach carbon neutrality of zero sometime in the second half of this century. We have every intention of reaching the target within the second half of this century. If we are able to bring it forward, that would be really an added bonus and it is something that we always will aspire to do.

Thank you, Deputy Speaker. And I thank Minister Tan See Leng. I just wonder if I could follow up. He mentioned that one of the important objectives is demonstration projects. We know that one element of demonstration projects that have been rolled out in many countries around the world is hydrogen in the form of public transportation, especially buses and taxicabs. I am keenly aware of the negative demonstration example of cases like the Hindenburg, but I wonder, especially when we are looking to transition our fleet beyond just electricity to a low carbon future, whether this will be part of the push in terms of our public transportation.

I thank Prof Lim for his question. We are looking at a couple of projects. I think, currently, there is a Low Carbon Energy Research Funding initiative, which is a multi-agency initiative involving A*STAR, Economic Development Board (EDB), Energy Market Authority (EMA), as well as the National Climate Change Secretariat and the National Research Foundation (NRF). I mentioned this earlier in my reply to Dr Tan Wu Meng's Parliamentary Questions. It is co-driven by EDB and EMA with A*STAR as the implementing agency on behalf of the Government.

On a limited basis, it is something that we could potentially look at, depending on the proposals that come in. But one of the key things that we are actively pursuing is looking at imports. We are looking at imports from the ASEAN countries and where we think that the countries that have maximum geographical advantage in terms of producing renewable energy with very low carbon or zero carbon, those are the immediate short-term measures that we will be moving forward to reduce our carbon footprint.