Opening Speech by SMS Sim Ann for 2nd Reading of the Building Control (Amendment) Bill

Wednesday, 11 September 2024

On behalf of the Minister for National Development, I beg to move, that the bill be read a second time.

1. Buildings account for around 20% of Singapore’s carbon emissions and more than a third of our electricity consumption.

a. Hence, there is much that the built environment sector can do to contribute to our drive towards sustainability. 

Singapore Green Building Masterplan

2. Our journey to green our built environment began about two decades ago in 2005, with the introduction of the Green Mark scheme. It was the first green building certification scheme that catered specifically for buildings in the tropical climate.

3. The scheme formed the backbone of the first Singapore Green Building Masterplan (or SGBMP), which was launched in 2006. Since then, we have continually refreshed the SGBMP , to expand the reach and impact of our green building efforts.

a. The fourth and most recent edition of the SGBMP was launched in 2021.

b. As reflected in its title “Building our Green Future Together”, this edition ofthe SGBMP was co-developed with more than 5,000 individuals across the Built Environment value chain as well as the wider community.

c. It sets out three ambitious targets, or “80-80-80 in 2030”.

i. The first target is to green 80% of our buildings by gross floor area (or GFA) by 2030. Buildings are considered green when they meet minimum environmental sustainability standards which are set out in our regulations.

ii. The second target is for 80% of new developments to be certified as Super Low Energy (SLE) buildings, a much higher sustainability standard, from 2030.

iii. The third target is for our best-in-class buildings to achieve 80% improvement in energy efficiency from 2005 levels by 2030.

4. We have employed a wide range of strategies over the years to achieve our targets.

a. They include raising minimum sustainability standards to ensure that new buildings are designed to be sustainable from the outset, and existing buildings are upgraded to meet prevailing standards when they undergo extensive works.

b. We have also set higher Green Mark standards for new building projects in strategic areas such as Marina South and Jurong Lake District, as well as for public sector buildings.

c. To encourage and support developers and building owners to meet higher sustainability standards, we introduced two incentive schemes in 2021 and 2022 – the Built Environment Transformation Gross Floor Area incentive scheme and the Green Mark Incentive Scheme for Existing Buildings 2.0 for new and existing buildings respectively.

d. We have also enhanced our investment in the Green Building Innovation Cluster 2.0 programme to advance research, development and demonstration of cutting-edge green building technologies.

Mandatory Energy Improvement (MEI) regime

5. Our strategies thus far have been aimed at uplifting sustainability standards for new buildings and buildings undergoing major upgrades, as well as supporting developers and building owners who want to pursue much higher standards.

6. Notwithstanding the significant progress that we have made, there is still room to do more. In particular, there are still existing buildings that are highly energy intensive, but are not required to improve their energy efficiency. This is because they do not undergo major retrofitting works or energy use change.

a. These buildings may not have been designed with sustainability in mind, or may not be operated or maintained efficiently.

b. As a result, there is significant energy wastage, sometimes amounting to more than a quarter of the buildings’ overall energy use.

c. This translates to unnecessary emissions, and avoidable energy costs that building owners incur over the lifetime of their buildings.

7. It is in this context that we are proposing amendments to the Building Control Act to further enhance energy efficiency measures for existing buildings.

a. Alongside other existing efforts, this enhancement will contribute towards meeting the first target of greening 80% of our buildings by GFA by 2030. As of July this year, we have greened close to 60% of our buildings by GFA.

8. To tackle the emissions arising from this group of existing energy-intensive buildings, this Bill will introduce the Mandatory Energy Improvement (or MEI) regime, planned for third quarter of 2025.

a. In gist, the MEI regime requires owners of energy-intensive buildings to engage a professional to carry out an energy audit of the building’s energy consuming systems.

b. Thereafter, building owners are required to implement improvement measures to reduce the building’s energy consumption, and to maintain the improved building energy performance over a period of time.

Amendments under the Bill for MEI regime

9. Sir, allow me to now go through the key amendments to the Building Control Act to enact the MEI regime.

a. These amendments are consolidated under Clause 5 of the Bill, which expands Part 3B of the Building Control Act on Environmental Sustainability Measures for Existing Buildings.

10. First, under the new section 22FF on periodic reporting, we will introduce the requirement for owners of buildings that may be subject to the MEI regime to submit information on their building’s energy use. This information is necessary for the Commissioner of Building Control (CBC) to assess if the building is energy-intensive and should be subject to the MEI regime.

a. For a start, the MEI regime will apply to commercial buildings, healthcare institutions, institutional buildings, as well as sports and recreation buildings that have a GFA of 5,000 square metres and above.

b. Today, BCA already collects building energy consumption data from these buildings annually by way of a written notice.

i. This data is used by BCA to establish national building energy benchmarks, which are published in the BCA’s annual Building Energy Benchmarking Report (or BEBR).

ii. The publication of such data allows building owners to compare their electricity consumption patterns against the national average for their specific building typology, which in turn nudges them to proactively improve their buildings’ energy performance.

c. Therefore, in practice, the addition of the new section 22FF will not impose new reporting requirements on these building owners.

11. Second, the new section 22FJ on the issuance of the MEI audit notice requires the CBC to issue a notice to owners of energy-intensive buildings.

a. Energy-intensive buildings are defined as buildings that have exceeded the prescribed Energy Use Intensity (or EUI) threshold for three consecutive years.

i. EUI is a measure of the building’s energy consumption normalised by GFA.

ii. The EUI thresholds will be set out in subsidiary legislation for each building sub-typology. This considers the fact that different sub-typologies will have different energy use profiles.

iii. For a start, the EUI threshold will be pegged at roughly the 75th percentile of the EUI range for each of the sub-typologies.

iv. In other words, the buildings that will be subject to the MEI regime are those that are consistently in the top 25% of their building sub-typology in terms of energy consumption.

b. The new sections 22FJ and 22FK also provide for the CBC not to issue or cancel the MEI audit notice under certain conditions. For example if a building is scheduled for redevelopment in the near future, or if the building is currently undergoing major retrofitting works or energy use change.

i. These will be assessed by the CBC on a case-by-case basis.

12. Third, the new sections 22FL to 22FU prescribe the duties of the owner whose building is subject to an MEI audit notice, as well as the specified individual appointed to carry out the energy audit.

a. Upon being issued an MEI audit notice, the building owner is to appoint a specified individual within 90 days to carry out an energy audit of the building’s major energy consuming systems, such as the building’s chiller and hot water systems.

i. This specified individual can either be a Professional Engineer registered in the discipline of mechanical engineering, or an energy auditor registered with BCA.

b. With the findings of the energy audit, the specified individual is to develop an energy efficiency improvement plan (or EEIP) with proposed measures to reduce the building’s EUI by 10% from pre-audit levels.

i. Depending on the building’s existing condition and energy performance, these measures can range from simple, low-cost measures such as the replacement of faulty parts and sensors, or the insulation of hot water systems, to more extensive retrofitting works such as the replacement of the building’s chiller systems. 

c. The building owner is then required to submit the audit report, which includes the EEIP, to BCA within one year from the issuance of the MEI audit notice, and implement the measures in the EEIP within three years from the submission of the audit report.

d. Thereafter, the building owner is to ensure that the required improvement in EUI achieved by the measures in the EEIP is maintained for the period of one year.

Engagements on MEI regime

13. Sir, the MEI regime is an important and necessary addition to our suite of strategies to accelerate the decarbonisation of our built environment.

a. It signals our commitment to bring all buildings, including the most energy-intensive ones, onto this journey of sustainable development.

b. It also recognises that no effort, , is too small to make a difference.

14. BCA has engaged extensively on the MEI regime over the last two years, conducting around ten engagement sessions with over 500 stakeholders across the built environment value chain.

a. I am pleased to share that building owners, energy auditors, consultants and key industry champions, such as the Real Estate Developers’ Association of Singapore (REDAS), the Institution of Engineers Singapore (IES), the Association of Consulting Engineers Singapore (ACES) and the Singapore International Facilities Management Association (SIFMA), are supportive of the regime.

15. That said, we recognise that upfront cost may be a concern to building owners whose buildings are subject to the MEI regime.

a. This is a legitimate concern, so let me share how the design of our policies will help mitigate some of these concerns.

16. First, beyond the environmental case for implementing energy efficiency improvement measures, we need to recognise that there is also a strong business case for doing so, as building owners can stand to reap significant cost savings over the building’s lifecycle.

a. As such, building owners should think of these energy efficiency improvement measures as long-term investments that will pay for themselves in the years to come.

b. This is achieved through the energy cost savings, as well as downstream maintenance and manpower savings.

c. Let me share the example of Thong Chai Building, a ten-storey office building at Chin Swee Road.

i. The Thong Chai Building was completed in 1976 and is 48 years old.

ii. In 2022, the building owner completed energy efficiency retrofitting works to improve the building’s energy performance. This was one of the projects supported under BCA’s previous Green Mark Incentive Scheme for Existing Buildings and Premises.

iii. The retrofitting works included the upgrading of the existing chiller plant to a more efficient one, the redesign of the air-distribution system to better cater to the building’s cooling demand, as well as the implementation of an energy management system with intelligent controls to more effectively monitor the performance of building systems.

iv. These measures have resulted in a significant reduction of the building’s energy consumption by around 40%, which translates to a reduction in its annual electricity bills by the same extent.

v. I’m pleased to learn that with these energy efficiency improvement measures, the Thong Chai Building has outperformed the average energy consumption for large office buildings, and has been awarded BCA’s Green Mark Platinum certification.

d. Beyond this case example, extensive retrofitting works such as those implemented by the Thong Chai Building generally have an average payback period of around six years.

i. This means that building owners should be able to offset the upfront cost of the retrofit through downstream cost savings within an average of six years.

ii. After this six-year period, owners will still continue to reap further savings over the rest of the building’s lifetime.

e. This House would also be aware that Singapore’s carbon tax will be further raised from $25 per tonne of emissions today to $45 in 2026, with a view to reaching between $50 and $80 by 2030.

i. The carbon tax today is imposed on power generation companies, and this is in turn reflected in higher electricity prices.

ii. Ahead of the subsequent increases in the coming years, it would be wise for owners of energy-intensive buildings to re-evaluate their electricity consumption and implement measures to reduce it, and the MEI regime encourages them to do just that.

17. Let me also share about how we have designed our policies to help building owners cope with the upfront cost of such measures.

a. First, we have designed the MEI regime to be outcome-based.

i. In other words, we do not stipulate the types of improvement measures that building owners need to undertake. Building owners have the autonomy to decide the measures to implement that are most appropriate for their buildings, as long as the required reduction is achieved.

ii. If assessed to be adequate, building owners can implement simple measures as mentioned earlier, or other behavioural changes such as increasing their set temperature of their air conditioning by 1 degree Celsius, which could result in about a 0.5% reduction in energy consumption.

iii. The upfront cost to implement these simple measures and behavioural changes is expected to be lower than the cost to implement more significant retrofitting works, which also means a shorter payback period.

b. Next, owners who wish to undertake more significant retrofitting works to meet even higher sustainability standards can also tap on the Green Mark Incentive Scheme for Existing Buildings 2.0 (or GMIS-EB 2.0).

i. Under this incentive scheme, building owners can receive up to 50% co-funding support to implement energy efficiency retrofits at various caps, depending on the level of Green Mark certification standard achieved.

c. Third, building owners are given up to three years to implement the energy efficiency improvement measures from the submission of the audit report.

i. This would give building owners sufficient time to plan and implement the measures to manage their costs.

18. Ahead of today’s second and third reading, we have also taken extensive efforts to engage building owners who will likely be subject to the MEI regime when it is first implemented next year.

a. BCA will continue to help these building owners prepare for and comply with the requirements of the new regime.

Amendments under the Bill for PFI regime

19. In addition to the MEI regime, the Bill will also make a further amendment to the Building Control Act pertaining to the Periodic Façade Inspection (or PFI) regime.

20. The PFI regime was introduced in 2022 to enhance the safety of building façades by facilitating early detection of façade deterioration and ensuring that defects are rectified in a timely manner.

21. Under the PFI regime, the building owner is to appoint a Competent Person (or CP) to conduct the façade inspection. The CP may in turn appoint a façade inspector (or FI) to assist in carrying out the façade inspections under his or her direction and supervision.

22. Presently, while there are prerequisites that an individual must satisfy to become an FI, there are no statutory duties imposed on the FI in respect of the inspections conducted.

a. This means that only CPs are held legally liable if inspections do not comply with regulatory requirements, even though an FI’s work could have a significant impact on the CP’s final assessment of the condition of the façade.

23. To address this, Clause 14 of the Bill amends Section 49(2) of the Building Control Act to enable the Minister to make regulations pertaining to FIs. The regulations will set out the statutory duties for FIs to:

a. Exercise due diligence in carrying façade inspections in accordance with the CP’s instructions and directions,

b. Personally supervise in full-time any other person or inspection company engaged by the CP to conduct the inspection,

c. And to notify the CP immediately of any unsafe façade.

24. BCA has consulted CPs and FIs involved in the PFI regime, and they are supportive of the move to prescribe statutory duties for FIs.

Conclusion

25. Mr Speaker, Sir, to conclude, this Bill is necessary to further our efforts in tackling climate change, and enhancing the safety of our built environment.

26. Sir, I beg to move.