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Regulating our Green Future.

2 November, 2011

 

Despite its small land area and lack of natural resources, Singapore has made great strides in mitigating greenhouse gas emissions and improving energy efficiency. Much of this is achieved without adverse impact on an island-state dependent on fossil fuels. Singapore’s ability to thrive while reducing its environmental footprint can be attributed to the series of regulations and incentives which have been introduced gradually over the years.

 
Green designs and energy efficiency
 
For a highly urbanised city in the equatorial region, it comes with little surprise that air-conditioning and ventilation account for close to 70% of electricity used by buildings in Singapore. The Building Control (Environmental Sustainability) Regulations 2008 (“Environmental Sustainability Regulations”) were put in place as part of the drive to improve energy efficiency in buildings and to ensure that new buildings and major retrofits are environmentally sustainable.
 
The Environmental Sustainability Regulations require all new buildings or major retrofits of gross floor area of at least 2,000m2 to meet the Green Mark Certified standard. The Green Mark Certified standard represents the minimum level of compliance with a set of criteria which includes energy and water efficiency. There are plans to extend this requirement to all buildings regardless of gross floor area. Buildings with good energy performance are also awarded an Energy Smart Building label to recognise this achievement.
 
The drive to improve building design and energy efficiency also led to the adoption of a new standard on Energy Efficiency for Building Services and Equipment as well as the Green Building Design Guide. These set minimum energy efficiency standards for building equipment and showcase design features which have been awarded the Green Mark.
 
To facilitate and encourage research and development into this area of building design and energy efficiency, the S$50 million Research Fund for the Built Environment has been set up by the Ministry of National Development. More recently, the Building Retrofit Energy Efficiency Financing Scheme introduced on 15 September 2011 aims to help building owners overcome the upfront costs of retrofitting their properties.
 
Efficiency starts at home
 
In order to maximise the effects of green building design and efficient buildings, consumer electronics and appliances have to be similarly efficient. Suppliers of appliances such as air-conditioners and refrigerators have to register their goods and ensure that the goods comply with statutory requirements under the Environmental Protection and Management Act and its associated regulations.
 
Since 2008, all household air-conditioners and refrigerators are required to carry an energy label to assist consumers in selecting more efficient models. More recently, from 1 September 2011, only appliances which meet the statutory minimum energy efficiency standards can be sold to the public.
 
As environmental conservation efforts are stepped up, it is expected that more appliances and equipment will be subject to minimum energy efficiency standards.
 
Green on the move
 
The efficiency of the internal combustion engine in most road vehicles ranges from 14% to 26%, further decreasing under congested road conditions and discharging even more particles and greenhouse gases into the air. This makes the internal combustion engine one of the least efficient yet necessary pieces of equipment in the modern world.
 
All vehicles on Singapore roads are subject to stringent emission standards under the Environment Protection and Management (Vehicular Emissions) Regulations. It is also mandatory to display the fuel economy labels for passenger cars and light goods vehicles at showrooms to enable consumers to consider fuel economy when purchasing their vehicles. Presently, to offset the higher cost of ‘green’ vehicles, purchasers of such vehicles can receive up to 40% the open market value of the vehicle through the Green Vehicle Rebate.
 
While these controls can help reduce the impact of the increasing number of vehicles on the roads, the more immediate solution is to control the growth of vehicle ownership and road use.
 
The Vehicle Quota System implemented in 1990 enables the Land Transport Authority (“LTA”) to regulate the number of vehicles registered for use in Singapore. To manage actual road use, the Electronic Road Pricing (“ERP”) system has been in operation since 1998. The ERP, like its paper-based predecessor the Area Licensing Scheme, serves to control road use by imposing a pre-determined charge on vehicles entering high-traffic areas at specific times.
 
Ultimately, the goal is to have a mix of efficient and environmentally-friendly vehicles on the road with a well-connected public transport network to better serve commuters and reduce congestion.
 
Going forward
 
As Singapore continues to develop, greater steps will be taken to reduce our carbon footprint and adapt to the changing environmental conditions. Many of these measures will be implemented gradually to allow the industry to develop and facilitate adoption by businesses and individuals.
 
The Government has already pledged significant funds and designated sites to develop the clean energy market. The Economic Development Board of Singapore has put aside S$350 million up to 2015 to develop the market. Various programmes are available for test-bedding new technologies (Clean Energy Research & Testbedding Programme with S$15million in funds), market development (Market Development Fund with S$5 million in funds), research (Innovation for Environmental 
Sustainability Fund with S$20 million in funds), and subsidising the adoption of clean energy such as solar energy (Solar Capability Scheme with S$20 million in funds).
 
Clean energy is an area of great growth and potential for established market players and new entrants alike. The risks involved will remain high and very real. In early September, Solyndra LLC, a solar technology company, applied for bankruptcy protection, the third U.S. solar company to do so within a month of each other.
 
Given the costs of developing and commercialising groundbreaking technologies, the success of many clean energy technologies and firms depends on its ability to secure funding and adoption by consumers. Having an experienced team on the ground familiar with the regulations, guidelines and policies can make a significant difference in the success of a new endeavour. An experienced legalJo team can also help reduce the compliance costs for established businesses and industries facing new regulations and legislation.
 
 
For further information, please contact:
 
Jonathan Kao, ATMD Bird & Bird
jonathan.kao@twobirds.com
 
 
 
 

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