Closing Speech by SMS Sim Ann on 2nd Reading of Building Control (Amendment) Bill
Sep 10, 2024
Mr Speaker, Sir, I thank Ms Carrie Tan, Ms Jean See, Mr Louis Ng, Mr Mark Lee and Ms Nadia Samdin for their comments and support for the Bill.
Let me address the issues they have raised.
Buildings subject to the MEI Regime
First, on buildings that are subject to the MEI regime.
Mr Louis Ng asked about the criteria used to define energy-intensive buildings, and if there are plans to review and progressively strengthen this criteria.
As mentioned in the opening speech, energy-intensive buildings are those that have consistently exceeded the Energy Use Intensity (or EUI) threshold in the last three years.
The EUI threshold is pegged at the 75th percentile of the EUI range for each building sub-typology, and will be prescribed in subsidiary legislation.
The EUI threshold will be fixed for a period of five years from 2025. This is to give certainty to building owners.
As the MEI regime is aimed at reducing the EUI of such energy-intensive buildings, we can expect the 75th percentile EUI for each building sub-typology to come down over time.
BCA will monitor the outcomes of the MEI regime, and review the threshold in five years’ time.
Mr Mark Lee asked if the assessment of a building’s EUI and its EUI threshold will include high energy uses, such as manufacturing, data centres and electric vehicle (or EV) chargers.
To clarify, the MEI regime applies only to four broad building typologies, namely (i) commercial buildings; (ii) healthcare facilities; (iii) institutional buildings; and (iv) sports and recreation buildings.
It will not apply to buildings for industrial use, such as manufacturing which are largely regulated under the Energy Conservation Act by NEA, it will also not apply to standalone data centres (DCs) which are managed by IMDA and EDB.
The MEI regime will, however, apply to buildings of the four broad building typologies, parts of which may house high energy consuming uses, such as data centre operations and laboratories.
The EUI threshold for such buildings will be pro-rated based on the space distribution of such uses.
This approach of pro-rating the EUI threshold is to ensure a like for like comparison as far as possible. So I hope that addresses Mr Mark Lee’s question.
I thank him too for his suggestion to exclude the energy consumption from EV chargers when assessing a building’s EUI.
Given that EV chargers are a relatively recent addition to many buildings, we will need to collect more data to better understand the contribution of EV charging to our buildings’ energy consumption.
As EV adoption becomes more widespread in years to come, our data will become more robust, and we would be better able to derive appropriate EUI thresholds that take into account the energy consumed for charging EVs.
We will take this into consideration as we implement and refine the MEI regime in the coming years.
Ms Nadia asked about our projected timeline to introduce the MEI regime, and the plans after it is first introduced.
In my opening speech, I shared that we intend to issue the first batch of MEI audit notices in the third quarter of 2025. We expect that there will be fewer than 100 energy-intensive buildings in this first batch.
MEI audit notices will subsequently be issued on a yearly basis.
Energy Auditors
Next, Members had also raised some clarifications and concerns regarding the professionals who may conduct the energy audits under the MEI regime.
Mr Ng had asked if Professional Engineers registered in the field of Mechanical Engineering (or Mechanical Pes) are equipped with the skills to perform energy audits, and if we verify that they attend sufficient courses to ensure that their skills relating to green buildings are up to date.
Sir, mechanical PEs have the necessary skillsets and expertise to conduct energy audits by virtue of the educational qualification, training and experience that they have attained in order to be registered.
The Professional Engineers Board also prescribes the number of Professional Development Units that PEs must obtain every year, through taking part in Continuing Professional Development (CPD) activities.
The selection of specific CPD activities is left to individual PEs on account that the scope of practice for each PE is different and unique. As such, the PE is in the best position to decide on the specific training that would best advance their professional development.
Mechanical PEs can continually sharpen their skillsets in areas relating to green buildings and energy audits by selecting relevant CPD activities, such as through specialised training under the Singapore Certified Energy Manager programme, Green Mark certification courses, practical experience and self-directed learning.
The energy audit requirements under the MEI regime are also similar to the requirements of the existing Periodic Energy Audit regime for cooling systems, which has been around since 2014. The skillsets required of Mechanical PEs and energy auditors under the MEI regime are therefore neither niche nor new, and we do not expect that there will be competency issues.
Mr Mark Lee had also raised concerns about industry capacity to cope with the demands of the MEI regime and potential increases in service prices.
Today, there are about 500 Mechanical PEs, BCA-registered energy auditors and NEA-accredited Energy Services Companies (or ESCOs) that can provide energy audit services. We have assessed this to be sufficient.
Given that the number of buildings that would be subject to the MEI regime is expected to be fewer than 100, we do not expect a surge in demand that would cause service prices to increase.
Energy Efficiency Improvement Measures and Maintenance Period
Next, let me address clarifications on the measures that building owners could implement to achieve the 10% EUI reduction and the maintenance period.
Ms Nadia has rightfully pointed out that a building’s energy consumption will include the share of energy used by individual tenants, beyond centralised systems.
It would be the building owner’s responsibility to work with their tenants to achieve the building’s overall energy reduction goals.
Building owners play an important role in influencing the energy consumption practices of tenants. They may consider implementing energy-saving policies or sustainability programmes to foster greater collaboration and cooperation from tenants.
To Ms Nadia’s query about the uptake of green leases in the past year, BCA does not collect such data.
Ms Nadia also asked if BCA plans to share a list of approved works that buildings owners can implement and their estimated costs, as well as a list of contractors for such works.
To clarify, the MEI regime is outcome-based. There is no prescribed list of approved works that building owners can or must undertake. The PEs or energy auditors are to recommend the suite of measures to achieve the 10% EUI reduction.
That said, BCA has also engaged owners whose buildings may be subject to the MEI regime. They have shared about the possible types of measures that building owners can implement, as well as their estimated costs and typical payback periods.
On contractors, BCA is not able to provide such a list as the types of works that can be implemented are wide-ranging. Building owners may work with their PEs or energy auditors to engage suitable contractors to carry out the works.
Ms Jean See asked about the length of the prescribed maintenance period and if there are any further expectations of building owners when this period expires.
As mentioned earlier, building owners are to maintain the improved EUI reduction for a year, after the completion of the energy efficiency improvement measures.
This one-year period will be applied consistently to all buildings under the MEI regime.
Upon expiry of this maintenance period, building owners are considered to have fulfilled requirements under the MEI audit notice.
That said, it is in the interest of building owners to continue monitoring the energy performance of their buildings and ensure that the improvements made continue to be effective in reducing their building’s energy consumption.
To Ms Nadia and Ms See’s query about efforts that BCA will take to ensure that building owners remain on track to fulfil the requirements of the MEI regime, building owners will be required to submit their building’s energy performance data annually. This will allow BCA to track their progress.
The Commissioner of Building Control (CBC) may also issue a written direction to building owners to submit progress reports.
Specific to Ms See’s query about ensuring that building owners set aside adequate resources to comply with the regime, as mentioned, we have conducted engagements with building owners who are likely to be affected by the regime.
The early engagements give them time to plan for resources needed before the regime comes into effect in third quarter of next year.
Building owners are also given three years from the submission of the audit report to implement the energy efficiency improvement measures. This should provide sufficient time for building owners to stage the resourcing needed to implement their plans.
Ms Nadia also asked if there may be plans to prescribe an absolute EUI reduction figure instead of the 10% reduction in the future.
We have gone with a percentage reduction as the EUI of buildings can differ quite significantly, even if they are of the same building typology and in the 75th percentile.
Given that a percentage reduction is fairer than an absolute figure reduction, we do not foresee that we might prescribe an absolute EUI reduction figure in the future.
Waivers / Exemptions
Moving on, let me address the clarifications around the topic of waivers and exemptions.
Ms Nadia asked about the grounds on which an MEI audit notice that has been issued may be cancelled under the new section 22FK.
The CBC may cancel the MEI audit notice if he or she assesses that it would not be reasonable to require the building owner to comply with the regime.
For example, if the building is scheduled for redevelopment, or will be vacated in the immediate future. Building owners will need to provide the necessary evidence of such plans to the CBC.
The CBC may also cancel the MEI audit notice if an energy-intensive building has already applied to carry out major retrofitting works or major energy use change.
In such cases, these buildings will be subject to minimum environmental sustainability standards, and there is no need to impose an additional regulatory regime on them to improve their energy performance.
The merits of each request for cancellation will be assessed by the CBC on a case-by-case basis.
Mr Mark Lee raised a valid point about existing buildings that may be structurally difficult to retrofit, and suggested flexibility clauses to cater to such buildings.
To reiterate, the MEI regime is outcome-based. It does not prescribe that building owners must undertake energy efficiency retrofits, in order to meet the 10% EUI reduction.
Building owners have the autonomy and flexibility to implement measures that are most appropriate for their buildings, as long as the 10% EUI reduction is met.
Nonetheless, we agree with Mr Lee on the importance of providing sufficient flexibility in our regulations to cater for exceptional cases. As such, we have built in various flexibility clauses into the Act.
One such flexibility clause is on the 10% EUI reduction requirement. Mr Ng and Ms See asked about examples where it may be considered impracticable for the building owner to meet the 10% EUI reduction and the grounds on which BCA may accede to lowering the EUI reduction percentage.
One example is if the efficiencies of existing energy consuming systems are already high and optimised, such that there is limited scope for further improvement. In such scenarios, BCA may assess that it is reasonable to impose a lower EUI reduction percentage.
Such applications to meet a lower EUI reduction percentage will be assessed by the CBC on a case-by-case basis. Building owners must, however, demonstrate that they have made good attempts to meet the 10% EUI reduction but encounter genuine difficulties in doing so.
To address Mr Ng’s question if financial constraints would constitute a basis for the building to be deemed as impracticable to meet the 10% EUI reduction – the short answer is no.
Building owners who are unable to afford the cost of energy efficiency improvement measures on their own can explore various financing options or business models.
For example, there are existing green financing options from financial institutions that provide upfront financing for energy efficiency projects.
Building owners may also consider engaging in energy performance contracting models with Energy Services companies (or ESCOs). Some of these energy performance contracting models include an agreement where the ESCO or third-party financing firm finances the retrofits, which is subsequently repaid through the resulting energy savings.
Support to Building Owners
On this note, let me address the clarifications and suggestions that Members have raised regarding support to affected building owners to comply with the MEI regime.
While funding will not be directly provided to building owners to meet the requirements under the MEI regime, as mentioned earlier, building owners who choose to undertake more significant retrofitting works can tap on the Green Mark Incentive Scheme for Existing Buildings 2.0 (or GMIS-EB 2.0) to do so.
In fact, building owners would have been able to tap on the GMIS-EB 2.0 to undertake energy efficiency retrofits to improve their energy performance and avoid being identified for the MEI regime since we first announced it at COS 2023.
Mr Ng and Ms Nadia asked about the utilisation of the GMIS-EB 2.0 and if there are plans to refresh the scheme.
Since its launch in 2022, we have approved 11 applications and committed about $1.3m in funding support to building owners. We expect the utilisation to increase with the implementation of the MEI regime.
We are also undertaking a mid-term review of the scheme to consider ways to enhance support to building owners.
Mr Mark Lee had suggested for us to consider expanding the GMIS-EB 2.0 to support building owners of smaller buildings, given that the scheme is currently only applicable to buildings that are 5,000 square metres and above.
We had scoped the support scheme to buildings that are 5,000 square metres and above to align with the coverage of our minimum sustainability requirements, which only apply to buildings of this kind. This is to reduce regulatory burden and compliance costs for smaller buildings.
Given that our intent is to further encourage these existing buildings that are required to meet minimum sustainability standards to go above and beyond.To achieve even higher standards, we have pegged the GMIS-EB 2.0 eligibility criteria to buildings that are 5,000 square metres and above.
Mr Mark Lee had also asked to consider expanding ESG’s Enterprise Financing Scheme-Green (or EFS-Green) to non-enterprise owners such that building owners such as Management Corporation Strata Title (or MCSTs) can benefit.
The EFS-Green is meant to support our local businesses to develop capabilities, build track record and tap on growth opportunities in the green economy by enabling access to financing.
Non-enterprise owners intending to retrofit their buildings such as MCSTs can tap on the GMIS-EB 2.0 to do so.
Mr Lee had also asked for an update on the expansion of the Energy Efficiency Grant (or EEG).
With the expansion, the EEG will be eligible to local companies in sectors such as retail, food services and data centres, as well as their users.
Such companies and users, who may be tenants of energy-intensive buildings, will be able to tap on the EEG to co-fund energy efficiency equipment. This will contribute to their buildings’ efforts to reduce energy consumption.
Additionally, the EEG will be expanded to the construction industry, and will provide co-funding support to construction firms to adopt energy-efficient construction equipment.
While the GMIS-EB 2.0 and the EEG for the construction industry both seek to drive greater sustainability within the built environment sector, unlike the GMIS-EB 2.0 which is aimed at reducing emissions at the building operations phase, the EEG targets emissions at the construction phase.
Since the announcement, our agencies have been consulting industry stakeholders and experts to identify key construction equipment that would be most impactful to greening the construction process.
Some examples include eligible Battery Energy Storage Systems (BESS), electric excavators, wheel loaders and crawler cranes that are more energy-efficient than their diesel equivalents.
Interested construction firms may apply for the EEG on the Business Grants Portal from the end of this year.
We also share Mr Lee’s sentiments on the importance of ensuring that our grant application and regulatory processes are duly streamlined. In fact, it is in our interest to ensure that this is the case so that more will benefit from our schemes and our policies can be implemented more smoothly and effectively too.
Innovation
Finally, Sir, I would like to address the clarifications and comments relating to innovations in the green building space.
Mr Ng asked if we have worked with entrepreneurs to trial green building products and services through the Green Economy Regulatory Initiative (or GERI).
As Mr Louis Ng mentioned, the regulatory sandboxes under GERI cover areas such as carbon services, electric vehicles, energy, and sustainable aviation and maritime.
Although the buildings sector is not one of the areas under GERI, there are existing programmes by BCA that drive innovation and support the test-bedding of new green building solutions.
One such programme is the Green Building Innovation Cluster 2.0, or GBIC 2.0, a programme which supports the research, development and demonstration of building energy efficiency technologies and innovations.
Some examples of innovative solutions that are being developed and test-bedded under GBIC 2.0 include Alternative Cooling Technologies, as well as AI or machine learning solutions that help to optimise building systems.
Just last week at the International Built Environment Week, we announced an exciting demonstration project by South Beach Tower Office under GBIC 2.0. They will be receiving up to $1.6m of funding support to implement novel solutions to enhance the energy efficiency of the tower’s air-conditioning systems, with the goal of achieving 75% energy efficiency improvement from 2005 levels.
On this topic of green building solutions, Ms Carrie Tan also raised the suggestion of incentivising the development of more naturally ventilated buildings.
A key thrust of BCA’s Green Mark Scheme is to encourage the adoption of passive design strategies that reduce heat gain into buildings and improve natural ventilation.
The GMIS-EB 2.0 also provides co-funding support to existing building owners who wish to redesign existing air-conditioned spaces to naturally ventilated spaces.
I’m heartened to see more project teams adopting such passive design strategies in their buildings. We are seeing this not only in new buildings, but also in existing buildings that have undergone renovations.
An example is DBS Newton Green, one of Singapore’s few net-zero commercial buildings. One of the key design strategies employed was to convert 10% of the floor area that was previously air-conditioned into naturally ventilated spaces. The building façade is also designed with bamboo slats which provide shade while allowing for the cool, natural breeze to flow through the building.
Like Ms Carrie Tan, I encourage developers and building owners to embrace such design solutions to reduce energy consumption.
Conclusion
Sir, to conclude, I thank Members for sharing their views, and for their support towards the amendments to the Building Control Act. These amendments will enhance our decarbonisation efforts in the buildings sector, and strengthen our building control regulatory framework.
With this, Mr Speaker, I beg to move.