Opening Address by Senior Minister of State for Transport and Foreign Affairs, Mr Chee Hong Tat at the 21st Singapore International Bunkering Conference and Exhibition

Introduction

1.     Ladies and gentlemen. Happy to join colleagues and friends at SIBCON 2020. 

2.     SIBCON 2020 brings together leading industry players and thought leaders of the marine fuel industry to chart the path forward for the industry.

3.     This year’s conference is held in the midst of an unprecedented global pandemic. For the first time since its inaugural conference in 1988, we are meeting virtually.

Impact of COVID-19

4.     The maritime sector has remained resilient. It continues to keep global supplies flowing, and ensures that essential goods reach people who need them around the world.

5.     The shipping that keep supplies moving is powered by marine fuels or bunkers, an integral part of the maritime sector. Despite the pandemic and the impact of fluctuating oil prices, Singapore’s bunker sector holds steady. 

a.     From January to August 2020, bunker sales volume in Singapore was 5.3% higher at 32.9 million tonnes, compared to the same period in 2019. 

6.     Continued growth notwithstanding, the sector needs to adapt and transform to ride out this crisis and emerge strong. Three priority areas: Quality, Resilience, and Sustainability.

Upholding Quality and Trust

7.     First, Quality. Throughout the many disruptions, one thing remains constant: the industry must continue to provide trusted and quality bunkering services.

8.     Singapore is committed to maintaining the integrity of our bunkering sector. We are not perfect. We have our share of black sheep and cases of malpractice, but what is clear is that we will not hesitate to take firm action and revoke bunkering licences of errant companies. 

9.     Over the years, the Maritime and Port Authority of Singapore (MPA) has worked closely with the industry and government agencies to put in place the necessary regulatory framework. 

10.    We are the only port in the world that implements a licensing regime for bunker suppliers and bunker craft operators. Our licensing conditions require bunker companies to comply with stringent bunker standards to uphold the safety of operations, and assure ships calling at the Port of Singapore of the quantity and quality of marine fuels received.

11.    Singapore has always been a strong advocate of industry standards, and will continue to evolve new and better standards to improve the bunkering sector:

a.     We recently launched: 

         i. the Singapore Standard for bunker cargo delivery from oil terminal to bunker tanker using Mass Flow Meter; and 

         ii. the Technical Reference for meter verification using Master Mass Flow Meter.

12.    An integral part of the regulatory framework is effective enforcement. In 2017, we introduced the Mass Flow Meter (MFM) to improve the transparency of operations and curb malpractices. Since its introduction, the MFM has helped boost operational efficiency by removing the need to manually determine the quantity of bunker fuel transferred. It provides greater certainty and confidence in the quantity of fuel transferred. During the delivery process, there is continuous digital data captured and the MFM system is able to detect changes to operating conditions, hence cutting down the potential for malpractice. 

13.    We will continue to review and adopt a multi-pronged approach to uphold Singapore as a trusted and quality bunkering hub. Besides regulations and swift enforcement measures, we will also accelerate efforts in digitalisation of transmission of data between buyers and sellers, to make bunker transactions more secure.

Enhancing Resilience through Digitalisation

14.    This brings me to my second point, on using digitalisation to enhance Resilience. COVID-19 has changed the way the sector does business – from face-to-face and paper transactions, the industry moved substantially to the virtual and electronic worlds to keep operations going. Telecommuting and electronic transactions are now the norm.

15.    These are good first steps. But there is room to do more to help the industry become truly digital. More importantly, it is about transforming business processes and operations to improve productivity and reduce handling costs. 

16.    Such transformation is not easy. How do we help our companies to get there? 

a.     Singapore has tailored a roadmap for the bunkering sector, to guide companies’ digitalisation plans and investments.

b.     The Sea Transport Industry Digital Plan, or IDP, is jointly developed by MPA, the Infocomm Media Development Authority (IMDA), Enterprise Singapore (ESG) and SkillsFuture Singapore (SSG). 

c.     I am happy to announce the third IDP which covers the bunkering sector. We have set aside up to $30,000 for each SMEs per year to cover up to 70% of adoption costs such as software subscription, professional services and training, as well as up to 50% of their hardware costs. 

17.    At the sector level, we will make changes to benefit the industry as a whole.

a.     Electronic bunker delivery notes (or e-BDN) will automate the transmission of Mass Flow Meter data to delivery notes. 

b.     We have made good progress. At least two bunkering companies are now conducting their proof of concept to fully integrate and automate MFM data into delivery notes. We look forward to more companies coming on board.

c.     Using e-BDN not only cuts down the number of administrative and manual steps required from vessels, it also makes bunkering transactions more secure by reducing the opportunities for manipulation of data during the transmission process. 

18.    There is some concern that digitalisation will remove jobs in the bunkering sector, or in the maritime industry more broadly. 

a.     Yes, some routine jobs will disappear, but many new jobs will be created. And most important of all, jobs will change for the better, be safer and pay more.

b.     The Government will walk this journey together with our companies and workers. MPA co-funds digitalisation courses under the Maritime Cluster Fund Training Grant. Companies can also tap on the Professional Conversion Programmes or the Techskills Acccelerator to bring in the talent you need.

Transforming the Bunkering Sector to be Sustainable

19.    Last but not least, Sustainability. The IMO set a 0.5% sulphur cap on fuels used by shipping globally by 2020, to protect the environment. 

a.     Despite the challenges, the shipping and bunkering industry met this timeline. This speaks to the nimbleness and ability of the sector to change.

20.    To play its part in tackling climate change, the IMO has set the goals to reduce greenhouse gas (GHG) emissions from ships by at least 50% by 2050, from 2008 levels, and to pursue efforts to phase out such GHG emissions in this century. 

21.    As the maritime community continues the search for low or zero-carbon fuels to meet IMO’s 2050 goals, LNG is a viable transitional fuel to mitigate CO2 emissions from ships. A number of first movers have made investments in LNG-fuelled vessels, including CMA CGM, Hapag Lloyd, Eastern Pacific Shipping and BHP.

22.    Singapore has been developing our ecosystem and infrastructure to support LNG bunkering. 

a.     MPA has issued two LNG bunker supplier licences, and co-developed standards and procedures in LNG bunkering, including safe simultaneous operations (SIMOPS), with the industry and other authorities. To date, we have performed more than 270 truck-to-ship LNG bunkering operations. 

b.     For ship-to-ship LNG bunkering, we have awarded $6 million for building of 2 LNG bunker vessels. Ship-to-ship LNG bunkering will be ready by the first quarter of 2021.

c.     My wife and I were honoured to participate in a virtual ceremony for “FueLNG Bellina”, the first of two LNG bunker vessels to be delivered latest by early next year.

23.    We welcome the global LNG-fuelled vessel community to lift LNG bunkers from the Port of Singapore:

a.     Singapore will have an LNG bunker supply capacity of up to 1 million tonnes per annum from 2021, translating to about 300 ship-to-ship LNG bunkering operations per annum to large-LNG-fuelled vessels. 

24.    We will do more to grow this area of business: 

a.     MPA will be launching the Request for Proposal in the coming weeks to issue additional LNG bunker supplier licences to support the growing demand for LNG bunkers. 

b.     The number of licences will depend on commercial demand. We will engage the bunkering companies on this and assess how we can support the industry’s growth.

25.    Beyond LNG, we will do our part to invest in the search for the green fuels of the future for shipping. 

a.     We will work together with like-minded partners to explore solutions. Today, MPA, the Port of Rotterdam and the Ministry of Land, Infrastructure, Transport and Tourism, Japan will be signing a Memorandum of Cooperation on a future fuels port network. 

b.     The MoC will allow for the development of a roadmap on the adoption of future marine fuels to support decarbonisation, and the coordination of possible joint bunkering pilot runs with identified shipping lines between ports.

c.     To accelerate efforts on the R&D front for decarbonisation, MPA & SMI have commenced the “Biofuel Compatibility Study for Singapore Harbour Craft”. The study is led by the Nanyang Technological University’s Maritime Energy and Sustainable Development Centre of Excellence.

Conclusion

26.    Marine bunkering fuels seaborne trade and global supply chains. This is another important area.

27.    Transformation towards quality, resilience and sustainability will improve marine bunkering, and the maritime sector as a whole.

28.    To achieve these, collaboration across borders, sectors and stakeholders in the sharing of ideas, expertise, and resources, and in collective efforts must proliferate. SIBCON 2020 provides this opportunity, even though it is held virtually. 

29.    I wish you a productive and insightful conference.