A case study of transformation
“Little Red Dot” is Singapore’s nickname, inspired by how the small city-state appears on maps. It also goes to say that, despite its size, this is a dot of prominence on the global stage.
The 20th smallest country in the world, Singapore is also the 4th richest per capita. Singapore stands at the top of the Index of Economic Freedom and Human Capital Index, as well as being the world’s most competitive economy, and second in the world for Ease of Doing Business.
More remarkable is the journey underwent by the city-state to achieve this global status. At the time of its independence in 1965, the 700 km2 island was isolated, half of its population illiterate, and not only did it lack any natural resources, but its land and water resources were heavily strained.
Perhaps one of the best illustrations of how a nation can overturn its limitations and transform them into unique strengths is Singapore’s petrochemical industry: despite having no oil, Singapore has the fifth largest refinery in the world; it is also the world’s biggest bunkering hub and busiest transshipment port. A prime example of innovative sharing of land, water, and energy is the country’s emblematic Jurong Island, the manmade island resulting from successive land reclamation works and the amalgamation of seven offshore islands. This serves as an integrated petrochemical complex and the home of the country’s chemical industry.
“Singapore underwent a transformation journey in the past decades, growing from a manufacturing base into a logistics and financial hub and the smart city that it is today.”
Dirk Lorenz-Meyer, Member of the Board, Behn Meyer Group
Today, almost 100 chemical companies congregate on the island. ExxonMobil’s Jurong Island refinery is the company’s largest in the world, with a capacity of over 500,000 barrels per day (bpd). Together with the two other refineries operated by Shell and Singapore Refining Company (SRC), the country has a refining capacity of 1.5 million bpd.
From crude oil imports, Jurong Island boasts an integrated ecosystem of refinery products, commodity chemicals, derivatives, as well as specialty chemicals. Evonik, SABIC, DuPont, Chevron, Mitsui, Sumitomo, Wacker, Solvay, Clariant, BASF, and Arkema are amongst the MNCs that chose Singapore as a manufacturing base and regional HQ.
Together with pharmaceuticals, chemicals are the largest contributor to the country’s manufacturing sector - which accounts for 21% of the country’s GDP, according to the Economic Development Board (EDB).
But big changes are underway. Singapore’s first refinery, Pulau Bukom, operated by Shell, will have its capacity reduced by half over the next two years, and it will be transformed into one of Shell’s six Energy and Chemicals Parks globally and the only one in Asia: “This year, as we celebrate our 130th anniversary in Singapore, we are at the same time transforming our business in Singapore to thrive through the Energy Transition in step with society. Bukom will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains,” Andreas Krobjilowski, general manager of Shell Singapore (Jurong Island) told GBR.
Shell Jurong Island (SJI) chemicals production site will also be focused on investments in better efficiencies for steam, water consumption, and energy consumption. The 10-year plan unveiled by Shell in 2021 is part of the giant’s goal to be carbon neutral by 2050.
“An important lasting impact of the pandemic is that it has made everyone more sensitive to the idea that whatever happens in one part of the globe can quickly, and often inevitably, impact another one. There is a powerful analogy between the pandemic and climate change, both reminding us that local issues cannot be isolated.”
Roger Marchioni, Asia Director for Chemicals and Polymers, Braskem
Since the Paris Agreement came into force in 2016, 196 countries entered a legally binding document to bring global warming below 2 Celsius compared to pre-industrial levels. Five years on, the nations involved were asked to submit an action plan to reduce greenhouse gas emissions (GHG), and they will also need to submit evidence of the actions taken. Individual countries set their own targets too: China, the largest GHG emitter, wants to level off emissions by 2030 and be climate neutral by 2060. The European Union and Japan targets are set for 2050.
Along with inter-governmental or national directives, chemical companies also made their pledges: Producers like Lanxess and Henkel want to be carbon neutral by 2040, while Braskem and Mitsui by 2050. Technology solution providers like ABB also stand by a 2030 carbon-neutrality target, and storage leader Vopak aims to be carbon neutral by 2050, in line with its customers.
Since the pandemic and, serendipitously, with the turn of the decade, these targets seem to have been brought closer, calling for greater initiative and investment in the area of sustainability. “A reinforced focus over the last two years is on sustainability, driven by society (and consumers) on one end, and by regulators on the other. The third pillar is the chemical industry’s own desire to contribute to sustainability,” said Peter Nagler, executive director of ICES (Institute of Chemical and Engineering Sciences) and chief innovation officer of A*STAR (Agency for Science, Technology and Research).
The main theme for ICES will be to develop expertise in what Nagler calls “chemistry for sustainability,” which comes with the recognition that chemistry is involved in everything from feeding the world’s growing population to finding sustainable solutions for Electric Vehicles (EVs).
According to Singapore’s National Climate Change Secretariat, Singapore contributes 0.11% to global carbon emissions. That said, Jurong Island represents about 75% to total industrial emissions in the country. Both aspects considered, Singapore does not only acknowledge the carbon footprint of its Jurong Island petrochemicals base, but it also wants to utilize and valorize its CO2 through innovative carbon capture and catalysis, and eventually to diversify the Island from petrochemical raw materials to renewable feedstocks and transitional fuels.
In 2021, the government unveiled the Singapore Green Plan 2030, charting ambitious goals for the next decade and intensifying sustainability-minded requirements, such as requiring that all car registrations be cleaner-energy models from 2030 and doubling the number of EVs charging points from 28,000 to 60,000 by 2030. In the food space, it’s 30/30 strategy aims to secure 30% of national nutritional needs locally by 2030.
Not a cheap manufacturing base, Singapore’s competitiveness comes from its well-developed digital infrastructure, R&D capabilities, well-educated workforce, and strong IP system. The vision of a Green Nation closely coexists with that of a Smart Nation, launched back in 2014. Singapore is already considered one of the smartest nations in the world, but it continues to advance forward-looking initiatives. For instance, at the start of 2021, driverless buses were available on Jurong Island as part of a three-month trial to bring the technology to the public. By 2022, more than half of Singaporeans will benefit from 5G network coverage.
Since 1991, Singapore has also been increasing its RIE (Research and Innovation) grants, raising the bar for productivity, Industry 4.0 developments, and greater industrial specialization. Its recently renewed RIE2025 will commit 1% of the country’s GDP on R&D projects in three areas of innovation: sustainability and sustainable chemistry; health and nutrition; technological advancements in 5G and materials, according to the EDB.
Whether it is reducing internal combustion engine (ICE) cars or the impetus on waste processing technologies, these developments directly or indirectly involve the chemical industry.
For the industry specifically, the government envisions a tailored Energy and Chemicals Industry Transformation Map (ITM), announced in 2017, under the Committee of Future Economy. This has been focused on boosting productivity but also diversification into higher-value products like elastomers, styrene-butadiene copolymer, or ultra-high molecular weight polyethylene (PE).
Image courtesy of Siemens