Second Minister for Trade and Industry, Dr. Tan See Leng, outlined Singapore’s strategy to unlock its resource potential during the MTI Committee of Supply Debate 2025. The government aims to drive long-term economic growth by decarbonising energy, investing in workers, advancing research and innovation, and enhancing land productivity.
Singapore will expand its resource potential through decarbonisation, workforce investment, research innovation, and enhanced land productivity to sustain long-term economic growth.
Singapore faces increasing economic pressures due to an ageing population, fierce competition for talent, and constraints on land and carbon emissions. To tackle these challenges, Second Minister for Trade and Industry, Dr. Tan See Leng, outlined four key strategies during the MTI Committee of Supply Debate 2025: decarbonising Singapore’s energy mix, investing in workers, sustaining research and innovation, and enhancing land productivity.
Singapore remains committed to achieving net-zero emissions by 2050, with energy decarbonisation playing a crucial role in attracting investments. One of the key efforts to achieve this goal is through expanding low-carbon electricity imports. Singapore has raised its electricity import target from 4GW to around 6GW by 2035. Conditional Licences have been issued for initial projects, supporting the goal of an ASEAN Power Grid, which will create jobs and underpin new investments in source countries.
At the same time, Singapore is maximising its solar energy potential. The country has met its 2025 solar deployment target of 1.5GWp ahead of schedule and is on track to reach 2GWp by 2030. To further encourage solar adoption, regulatory processes have been simplified, allowing building owners to save up to 30% on total construction costs for eligible solar PV installations on metal-roofed buildings.
Beyond solar and electricity imports, Singapore is exploring low-carbon alternatives. Nuclear energy, particularly advanced nuclear reactors, is being studied as a potential future energy source. While no decision has been made on deployment, the government is investing in nuclear safety training and building partnerships with the U.S., France, and the UAE. Hydrogen fuel is also being explored as a future low-carbon fuel. A pilot project for hydrogen-based power generation and maritime bunkering is expected to be launched by the end of 2025. Additionally, Singapore is working on carbon capture and storage (CCS) technologies to help decarbonise hard-to-abate sectors, with agreements signed with Indonesia and Malaysia. On the carbon markets front, Singapore recently signed an Implementation Agreement with Bhutan to expand its Article 6 carbon credit framework, adding to existing agreements with Ghana and Papua New Guinea. Later this year, a Request for Proposals (RFP) will be launched to procure Article 6-compliant carbon credits.
Ensuring energy security remains a top priority. Natural gas will continue to play a crucial role in Singapore’s energy mix, and the government is setting up a central gas procurement entity this year. Additionally, a second LNG terminal will be completed within the decade to secure Singapore’s energy needs.
To support the transition to low-carbon energy, the government is investing $62.5 million in a Low-Carbon Technology Translational Testbed (LCT3) to help companies scale up low-carbon solutions. To fund long-term infrastructure development, the Future Energy Fund (FEF) will be topped up by $5 billion. While no disbursements have been made yet, significant drawdowns are expected as key technologies and commercial thresholds are met.
As the economy transitions, Singapore is prioritizing workforce upskilling, especially in energy-intensive industries like petrochemicals. More than $1 billion will be spent on Continuing Education and Training (CET) initiatives in FY2024. A new CET degree in Electrical and Electronics Engineering, launched through a partnership between EDB and the Singapore Institute of Technology, will allow diploma holders to further their education while continuing to work. Additionally, Career Conversion Programs (CCPs) have received a boost, with the monthly salary support cap increasing from $6,000 to $7,500 for eligible workers.
Attracting global talent remains essential to complement Singapore’s workforce. Singapore has concluded agreements with Indonesia and Vietnam under the Tech:X and Innovation Talent Exchange programs to facilitate the exchange of tech and innovation professionals. Nearly 50 companies and 50 Singaporeans have expressed interest in these initiatives, which will provide young leaders with greater exposure to regional economies while helping companies access mobile talent.
To maintain Singapore’s competitiveness, $28 billion has been invested under the Research, Innovation and Enterprise (RIE) 2025 plan. The government is driving semiconductor and biotech research through new initiatives such as the RIE Flagship for semiconductor R&D and the RIE Grand Challenge on healthy longevity. ASTAR’s MedTech Catapult, which supports frontier medical device development, has already attracted over 10 companies. Singapore is also expanding its biomedical research ecosystem with a $500 million investment in a new research hub at one-north, which will bring ASTAR closer to key partners like the National University Health System (NUHS).
Advancements in biopharma manufacturing will be driven by two new programs: STAMP 2.0 and PACTMAN. STAMP 2.0 will develop cost-effective cell therapy manufacturing solutions, reducing vein-to-vein time for patients, while PACTMAN will accelerate the transition of cell therapies from lab to clinic. These efforts aim to strengthen Singapore’s biomedical R&D capabilities, create high-value jobs, and boost economic growth.
Land productivity remains a key focus area. The Land Intensification Allowance (LIA) scheme will be extended for another five years, providing a 15-year tax allowance for qualifying companies. To encourage more businesses to integrate operations, the LIA shareholding criteria will be reduced from 75% to 50%.
JTC is also introducing new land flexibility initiatives. Companies leasing greenfield industrial land will now receive an additional three years of tenure to cover development and building time. A new 5-Year Flexible Lease Extension Initiative (FLEXI) will allow eligible companies to extend their leases in two five-year tranches. Additionally, lease renewal applications can now be submitted 10 years before expiry, up from six years. JTC is also broadening its definition of plant and machinery investments to include investments in R&D, digital transformation, and IP creation, ensuring businesses can maximize land use effectively.
In closing, Dr. Tan emphasized that Singapore’s resource constraints have always driven its innovation and resilience. The nation has thrived not despite its challenges, but because of them. By making bold decisions today in decarbonisation, workforce development, research innovation, and land productivity, Singapore is laying the foundation for a vibrant, sustainable future for generations to come.
Source – MTI
