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October 31, 2022

Joining the Clean Hydrogen Movement: Singapore’s National Hydrogen Strategy

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JOINING THE CLEAN HYDROGEN MOVEMENT: SINGAPORE’S NATIONAL HYDROGEN STRATEGY

On October 25, 2022, Singapore’s Ministry of Trade and Industry published Singapore’s National Hydrogen Strategy (the “Strategy”). The Strategy recognizes the potential of low-carbon hydrogen as a broad-based decarbonization tool and the economic opportunity of positioning Singapore as a regional hub for hydrogen trade. This article focuses on the key aspects of the Strategy and potential challenges to its implementation.

The Strategy is a part of Singapore’s effort to achieve its commitment to net zero emissions by 2050 while also strengthening its energy security. A primary area of focus for Singapore is the decarbonization of the power, maritime and aviation sectors, which are major sources of carbon emissions for Singapore. Given a lack of space and natural resources for solar, wind and hydropower projects, Singapore has limited options to move away from traditional energy sources. Low-carbon hydrogen importation is therefore seen as a promising potential clean energy source for Singapore’s decarbonization plans.

The Five Key Areas of Focus

The Strategy sets out five key areas for Singapore’s hydrogen deployment domestically and the build-out of a hydrogen supply chain in the region.

Innovation and Experimentation

Singapore will experiment with the use of advanced hydrogen technologies that are at the cusp of commercial readiness through pathfinder projects. Each project will begin with a solicitation of proposals and ideas from the industry, such as through an Expression of Interest (EOI) or a Request for Proposal. To begin with, an EOI will be launched for a small-scale commercial project utilizing ammonia for power generation (which is a key focus of the Japanese government as well) and potentially other applications such as marine bunkering needs, to assess the viability of ammonia as a hydrogen carrier and as a direct fuel.

R&D for Commercial Pathways

SGD 129 million in research funding has been set aside for phase two of the Low-Carbon Energy Research Funding Initiative (LCER FI), a program aimed at improving the techno-economic viability of low-carbon technologies. This is in addition to the SGD 55 million awarded to the program in October 2021. Phase two of the LCER FI will now include low-carbon hydrogen as a key focal area, and will prioritize the funding of projects relating to the importation, storage, handling and utilization of hydrogen safely, economically and at scale. Potential R&D areas include cracking ammonia to liberate hydrogen, improving the economics of transporting and storing liquefied hydrogen and using and managing hydrogen and ammonia deployment safely in Singapore’s unique operating context (e.g., dense urban population, high humidity).

Collaboration

Singapore will pursue regional and global collaborations to enable supply chains for low-carbon hydrogen. This will include the development of Guarantee of Origin certification methodologies that can apply across jurisdictions and building a trading and financing ecosystem to facilitate global trade of low-carbon hydrogen.

Infrastructural Requirements

Long-term land and infrastructure planning will be undertaken to build import and storage facilities, distribution networks and infrastructure for new end-use applications such as power generation units and bunkering jetties.

Training and Development

Supporting workforce training and development of the broader hydrogen economy will also be an area of focus. This will include early intervention and the systematic training of workers to acquire the new skills needed along the hydrogen supply chain.

Challenges

Mass deployment of hydrogen will require infrastructure and supply chain modifications that cost time and money. Singapore expects to import most of its low-carbon hydrogen, making it more expensive than if it were able to produce hydrogen domestically—a similar situation to that in which Singapore has found itself during the fossil fuel era. Currently, however, Singapore lacks the infrastructure to support hydrogen transportation, storage or use, although it may be able to repurpose some existing natural gas assets. In this regard, Singapore is similar to Europe, Japan, Korea and other likely hydrogen demand centers. Technologies for the transportation and use of liquified hydrogen and reconversion of hydrogen carriers are either in the early stages of development or have not yet been shown to work at scale. Further, regional and global supply chains for low-carbon hydrogen are still not developed. Lastly, the safe and reliable use of hydrogen and ammonia in key end-use applications has not yet been proven. Indeed, despite recent good progress on this front, the use of ammonia as marine fuel for ships or direct fuel for power generation and the use of hydrogen as direct fuel for aircraft have yet to be proven.

Conclusion

  • With the launch of the Strategy, Singapore has clearly identified low-carbon hydrogen as a key part of its decarbonization strategy, with hydrogen expected to supply half of the country’s power needs by 2050.
  • While low-carbon hydrogen is hailed as a key pathway to decarbonization, it comes with uncertainties and challenges for Singapore, including a lack of local infrastructure for production, transportation, storage or use of hydrogen, as-yet unproven technologies for transportation and use of hydrogen at scale, lack of a global hydrogen supply chain and uncertainties around the safe and reliable end-use applications of hydrogen and ammonia.
  • Nevertheless, with its focus on creating a technology hub, building the necessary infrastructure, building a trading and financing ecosystem and international collaboration, the Strategy has the potential to further progress Singapore’s decarbonization journey and propel the establishment of a regional or even global hydrogen ecosystem.
  • The Strategy also welcomes feedback on the Government’s policies from industry players to better navigate the path ahead.

Special thanks to director of client value team Asia Neela Ramanathan and legal assistant Shao Wei Tan for their contribution to this publication.

Authors and Contributors

Bill McCormack

Partner

Project Development & Finance

+65 6230 3877

+65 6230 3877

Singapore

Dan Feldman

Partner

Project Development & Finance

+971 2 410 8158

+971 2 410 8158

Abu Dhabi

David Clinch

Partner

Mergers & Acquisitions

+65 6230 3892

+65 6230 3892

Singapore

Jean-Louis Neves Mandelli

Partner

Project Development & Finance

+65 6230 3834

+65 6230 3834

Singapore