The Singapore budget was just presented in the annual budget speech
There is a focus on climate and sustainability for the nation
Supporting policy frameworks for electric vehicle penetration, and a phase out of internal combustion vehicles have been announced
Singapore is committing to the goals of the Paris Agreement and will be updating its Nationally Determined Contribution during 2020
This presents risks and opportunities for Singaporean businesses that they should seek to understand and incorporate into climate change strategy
On February 18, 2020 the 2020 Singapore budget was presented by Deputy Prime Minister and Finance Minister Heng Swee Keat. Increasingly, there is a focus on sustainability and climate change within national budgets and with national priorities by a number of countries - and Singapore is no exception.
engeco has prepared an analysis of key parts of Singapore's budget relating the climate change and sustainability and extracted some actions that Singaporean businesses can take in the short to medium term. Download this analysis here.
The announcement getting the most media coverage is Singapore's support for electric vehicles. This comes with financial incentives to encourage early adoption of electric vehicles and a commitment to increase the amount of charging infrastructure on the island. The Government is also committing to procure and use cleaner vehicles within its own fleet. With this move however, comes a change to road tax provisions, to account for lost fuel excise in the move to electric vehicles. There has been a commitment made to phase out internal combustion vehicles and have all vehicles run on cleaner energy by 2040.
The Government affirmed its commitment to the Paris Agreement and announced that it will be looking to update its national targets under this framework (the Nationally Determined Contribution) during 2020 - presumably taking this target to the upcoming COP26 in Glasgow in December. This is encouraging and highlights the need for businesses to continually examine and adapt their climate change strategies - exploring business resilience to a Paris aligned scenario.
Finally, the Government once again provided its support for the transition to a circular economy by announcing that it is continuing to explore ways in which resources can be recovered and reused - complementing the zero waste masterplan. Related to this is the allowance of funds for research in urban solutions and sustainability.
This budget sends a signal that the Government is willing to invest in sustainability and climate change action - perhaps because there is an opportunity for Singapore in marketing skills and technology to the world. Investment in deep tech and sustainability should see an overall economic benefit to the country in the medium term.
Companies, as always, need to be aware of potential opportunities for grants and funding/co-investment - as well as being mindful of potential strengthening of policy and the impact of that on their business operations. With Government considering climate and sustainability as a priority, businesses could reasonably expect a change in regulatory risk in the future.