Could you introduce the Chemicals and Products business division within Shell?

Last year, Shell announced our Powering Progress Strategy. At the heart of it is about helping our customer to decarbonize, sectors by sectors, purposefully, profitably. Chemicals and Products is a new business line that combines our manufacturing assets and chemicals businesses under one umbrella to support this strategy. Our goal is to grow performance and sustainable chemicals at scale, and to transform our assets into Energy and Chemicals parks, enabling all sectoral businesses across Shell to provide full range of low carbon chemicals and products to our customers.

What is the vision behind the transformation of Pulau Bukom into one of Shell’s five global energy and chemicals parks globally?

Our vision is to transform Bukom, fully integrated with Shell Jurong Island, into an Energy and Chemicals Park where we can provide a wide range of low carbon solutions to different sectors here in Singapore and Asia. To achieve this, we plan to create new low carbon platforms like bio, circular, and clean energy systems like Carbon Capture and Storage and renewable energies. We are also reducing our own carbon footprints (and our customers’) as part of this transformation, in line with Shell Singapore’s target to reduce emissions by 50% by 2030, compared to 2016 levels on a net basis.

Could you share what have been Shell’s main investments towards transforming Bukom?

Last year we announced the final investment decision on a 50,000 t/y pyrolysis oil upgrader unit that will turn waste-derived pyrolysis oil into circular chemicals. Once complete, this will be Asia’s largest such facility and Shell’s first in the world. This is expected to come onstream in 2023. Subject to final approval, we also plan to build a proposed 550,000 t/y biofuel facility that will use renewable feedstocks such as used cooking oil, animal fat, and green hydrogen to make low-carbon products, including sustainable aviation fuel (SAF), bio-chemicals and renewable diesels. This will support Shell’s aspiration to produce 2 million t/y of SAF a year by 2025. We are also working with the government to explore a solar farm in Semakau to meet Singapore’s growing clean energy needs, and looking at carbon capture storage technology to decarbonize both our own assets and our partners’. In addition to these clean energy investments, we are also reducing fossil base transportation fuels and shifting them into products with low/no scope 3 emissions. We halved our crude processing capacity at Bukom as part of an overhaul in our journey towards a low-carbon future last year. We have announced the final investment decision on repurposing a unit to produce more differentiated polyols. We are also looking into investments to shift production of transportation fuels to products that support our bitumen and lubricants businesses.

Could you share your views on the effectiveness of applying a carbon tax to mobilize decarbonization efforts?

A sound policy to ensure innovations and carbon abatement investments while protecting competitiveness of the energy industry in Singapore is very important, especially for trade-exposed industries like ours where 90% of our products are being exported. Otherwise, this could lead to “carbon leakage” as CO2 emission is simply shifted to other countries.

How is the rise in raw material prices impacting chemical supply markets?

Together with demand uncertainties due to continued Covid impact, the chemicals industry here in Singapore is going through a tough time. Having said that, the needs for energy security and rise in energy price will provide incentives to accelerate investments in renewables and energy solutions. In the chemicals space, we are seeing more commitments from brand owners on circular and lower carbon chemicals. Hence, it is becoming ever more important for us to shift to performance and sustainable chemicals to support our customers.

Could you share a final message with our audience?

Industry leadership, government support, and consumer demand for sustainable products will be key to accelerate the Energy Transition. Last year, when we announced our Shell Energy and Chemicals Park Singapore upgrader investment for circular chemicals, we frankly did not have all the answers. But to turn vision into reality, we need to take steps forward. Tackling climate change and waste, while providing reliable fuels, products, and chemicals everyday safely and responsibly is a tough challenge, but it is what motivates me and many at Shell to come to work every day.