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Business Times
2 days ago
- Automotive
- Business Times
Formula 1 renewable energy shift drives 26% drop in carbon footprint
[NEW YORK] Motor racing, a sport known for flashy, petrol-guzzling racecars speeding at hundreds of kilometres per hour across twisting asphalt tracks, has not been a pastime known for sustainability. Formula 1 is trying to change that. Often referred to as 'the pinnacle of motorsport', the racecar organisation, which hosts an annual championship featuring the best drivers in the world, has seen its carbon emissions drop 26 per cent since 2018. At the end of the 2024 season, the sport's carbon footprint fell to 168,720 tonnes of carbon dioxide equivalent from 228,793. F1 said on Wednesday (Jul 23) that it's halfway towards achieving its minimum 50 per cent reduction target, as set out in its 'net zero by 2030' commitment. 'It's the culmination of a lot of work,' said Ellen Jones, head of environmental, social and governance at F1. 'We have changed the way we operate, changed the way we work' with the racing teams and promoters, as well as Formula 1's management and regulator, she said. A major factor in the reductions has been a years-long shift to renewable energy, Jones said. Investment in sustainable aviation fuel for travel and freight use, and other alternative energy sources, including solar and biofuels, contributed to the decline. Next year, F1 has set a target for the cars to have new hybrid engines and be powered entirely by advanced sustainable fuel. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up The sport has achieved carbon reductions across the four major categories that it tracks: factories and facilities, down 59 per cent since 2018; logistics, down 9 per cent; event operations, down 12 per cent on a per-race basis; and travel, down 25 per cent. An increase in using remote operations and changes to the race schedule have also resulted in lower greenhouse gas emissions. Having remote broadcast operations has allowed about 140 personnel to avoid having to travel to the race location each weekend. And changing the date of the Japanese Grand Prix to align with other races last year in the Asia-Pacific region also contributed to lower emissions. In 2026, the date of the Monaco Grand Prix will be moved to align with other European events and eliminate an additional transatlantic crossing. F1 said its climate commitment is 'set in accordance with the science' from the Intergovernmental Panel on Climate Change and aligns with the panel's definition of net zero emissions. The racing series' goal is to reduce absolute emissions by a minimum of 50 per cent from a 2018 baseline, which was calculated using guidance set by the Greenhouse Gas Protocol. F1 has faced criticism from activists who say the sport is harmful to the environment. In 2022, demonstrators with Just Stop Oil sat on the track during the 2022 British Grand Prix, disrupting the race. The construction of Madrid's Grand Prix street circuit also has prompted backlash. The Brazilian leg of the F1 schedule takes place in November, days before the 2025 United Nations Climate Change Conference, which will be hosted in the South American country. BLOOMBERG
Business Times
3 days ago
- Business
- Business Times
The true price of AI
DRIVEN by national digitalisation strategies, rapid advances in artificial intelligence (AI) and booming cloud computing, South-east Asia is accelerating its data infrastructure build-out. These facilities – critical for AI training, Big Data processing and digital services – are now central to the region's economic competitiveness and technological growth. Yet, this progress comes with steep environmental costs. Data centres are highly resource-intensive, consuming vast amounts of electricity to power servers and significant amounts of water to cool systems – especially in tropical climates. As the region faces mounting water stress from urbanisation, population growth and climate change, its digital expansion increasingly clashes with resource limits. Without coordinated strategies to manage this water-energy nexus, South-east Asia risks undermining its climate goals and long-term resilience. Asia's data centre boom Asia's digital transformation, driven by AI, cloud services and growing digital economies, has sparked an unprecedented surge in data centre development. South-east Asia is at the centre of this expansion. Between 2019 and 2023, regional data centre capacity more than doubled from 0.8 gigawatts (GW) to 1.7 GW. Its six largest economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – are collectively developing some 2.9 GW in new capacity. Singapore leads with over 70 operational data centres. There are no signs of slowing down. The region's data centre capacity is projected to triple by 2030, reaching between 5.2 and 6.5 GW, largely driven by the exponential growth in AI computing demand. Data centres are rapidly expanding to support the region's growing digital economy, cloud computing and AI ecosystems, positioning it as the next major data centre hot spot. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Water-energy nexus Despite mounting environmental concerns, data centre siting in South-east Asia continues to prioritise land availability, tax incentives and low-cost electricity – often at the expense of long-term water and energy sustainability. This disconnect is intensifying the region's water-energy nexus crisis. An estimated 74 per cent of South-east Asia's nearly 700 million people already face high water stress, while 347 million in the region endure severe shortages, among the worst globally. Rapid urbanisation, rising temperatures, and competing agricultural and industrial demands are further straining fragile water systems. Data centres exacerbate these pressures. A single AI-oriented facility can consume as much electricity as 100,000 households in the US, with cooling alone accounting for up to nearly 40 per cent of total energy demand. Around 70 per cent of South-east Asia's electricity is still generated from fossil fuels, which raises concerns about emissions and grid stability. The International Energy Agency projects the region's data centre electricity demand will nearly double by 2030, with national consumption from data centres reaching as high as 30 per cent in some Asean countries. Water demand is rising in parallel. The United Nations Environment Programme estimates that a 1-megawatt data centre uses 25.5 million litres of water annually – comparable to the daily needs of 300,000 people. According to scientists at the University of California, Riverside, each 100-word AI prompt alone uses roughly 519 millilitres, or one bottle of water. Adding to concerns, most data centres rely on evaporative cooling, which can lose up to 80 per cent of water through evaporation. Roughly 60 per cent of their total water footprint is indirect – tied to fossil fuel power generation. The consequences are already evident in South-east Asia. Notably, Malaysia, aiming to become Asean's digital capital and targeting a 35 per cent digital economy contribution to gross domestic product in 2030, is facing resource vulnerabilities. In 2024, Malaysian authorities received 101 new data centre applications, with a combined water demand exceeding 808 million litres per day. Johor, its fastest-growing data centre hub, exemplifies the resource risks. In Johor alone, projected water demand from existing and planned facilities would exceed 673 million litres per day. As most data centres rely on treated public water – normally reserved for domestic use – for server cooling, Malaysia's water regulator has warned this is unsustainable, given water infrastructure across three states – Johor, Selangor and Negeri Sembilan – can supply only 142 million litres. Climate stress adds urgency. Johor is forecast to face droughts as early as 2025, placing even more strain on water resources. Without integrated planning and sustainable resource management, South-east Asia's digital growth risks undermining the very development goals it aims to achieve. Addressing concerns Tackling these challenges demands a multifaceted approach: Enhancing regulatory transparency with stronger environmental reporting and detailed resource metrics – including water footprints – alongside increased investment in water-efficient cooling technologies. Governments and industry must coordinate through clear policies, national frameworks, regional collaboration, innovation in technology and governance, regulatory incentives and transparent performance benchmarks. Crucially, South-east Asia must accelerate the shift in data centres' energy mix towards low-carbon, water-efficient sources. With data centres projected to consume as much as 30 per cent of national power demand by 2030, expanding renewables – especially solar, wind and hydropower – is essential to reduce dependence on carbon and water-intensive coal power. Research suggests that solar and wind could meet up to 30 per cent of data centres' electricity demand in the region. Lessons from China China offers valuable lessons. Home to some 450 data centres and responsible for about 25 per cent of global data centre electricity use, Chinese facilities consumed some 140 billion kilowatt-hours (kWh) in 2024, a 31 per cent year-on-year increase, far outpacing the country's overall electricity growth of 6.8 per cent last year. In response, Chinese authorities are investing heavily in nuclear and renewable energy. A low-carbon plan issued in July 2024 aims to increase renewable energy use in data centres by 10 per cent annually through 2025, requiring an estimated 40 to 63 billion kWh from wind and solar sources. The private sector is also driving change. In 2024, Chinese tech giant Tencent's renewable-powered microgrid project in Hebei, a 10.99 megawatt (MW) facility and China's first to integrate wind, solar and battery storage on site, generates 14 million kWh annually for an adjacent data centre. A second microgrid in Tianjin, with 10.54 MW solar capacity, produces 12 million kWh annually. Tencent said renewables power 54 per cent of its data centres' electricity needs, with over 70 per cent of its self-built campuses running on green energy. Regional cooperation even more crucial than before Outside of Asia, Microsoft will pilot zero-water evaporated designs at new US facilities from 2026, while Amazon plans to expand its use of treated wastewater for data centre cooling, from 20 to 120 data centres by 2030. If successful, these initiatives serve as models for South-east Asian data centre operators. Regional cooperation is also critical. Platforms such as the China-Asean Belt and Road Green Development Partnership, Asean Smart Cities Network and Asean-China Ministerial Meeting on Science, Technology and Innovation provide avenues to harmonise environmental standards, and cross-border technology exchange and sharing of best practices. New initiatives, like the planned China-Asean AI cooperation centre, demonstrate interest in collaborative data centre development. Without urgent reforms – clean energy shifts, water-efficient technologies and stronger regulation – South-east Asia's digital ambitions risk becoming environmental liabilities. Embedding sustainability into infrastructure planning is no longer optional. The region's ability to lead the next tech wave hinges on getting this balance right. ThinkChina The writer is the Asia-Pacific analyst at The Red Line and a researcher at the Oxford Global Society
Business Times
4 days ago
- Business
- Business Times
ABN Amro analysts see ESG bond issuance dropping ‘considerably'
ISSUANCE of euro-denominated environmental, social and governance (ESG) bonds is likely to see a pronounced decline in 2025, as negative sentiment fanned by political backlash weighs on the market, according to analysts at ABN Amro. ESG issuance is 'expected to considerably lag in 2025', amid 'a noticeable surge in negative news related to ESG in the first half of the year', analysts Marta Ferro Teixeira and Filipa de Carvalho Tomas wrote in a note on Friday (Jul 18). They now see issuance of 247 billion euros (S$369 billion), down from an earlier forecast of 266 billion euros. In 2024, issuance reached 272 billion euros, they said. Interest in financial products claiming to target environmental, social and governance goals is flagging amid politically motivated attacks on so-called 'woke' capitalism, combined with evidence of greenwashing. The global market for ESG funds saw its worst quarter on record in the three months through March, as the broad-based backlash against the investment strategy gains ground. The ABN Amro analysts pointed to US President Donald Trump's decision to declare a national energy emergency as a key reason for the decline, with policies in the world's largest economy now 'prioritising fossil fuels over clean energy initiatives', they wrote. The shift in sentiment has led oil producers such as BP to cut back on their renewable energy programmes, while major banks have been turning their backs on the world's biggest climate alliance for the industry. Such developments raise 'concerns about waning climate commitments', Teixeira and Tomas wrote. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up At the same time, efforts in Europe to simplify ESG rules 'suggest that both regulators and companies worldwide might be scaling back their climate ambitions', the analysts said. ABN Amro's analysis shows that ESG issuance from utilities has fallen short, while sovereign issuance has taken a small hit in part as bond sales under Europe's NextGenerationEU programme lag behind earlier expectations, they wrote. The overall effect is one that the analysts said they 'consider not as negative, given the significant policy shifts in some other Western countries'. Finally, the ABN Amro analysts noted that 'there is a lengthy process for ESG bond issuances, and timing for issuance becomes a key factor during volatile markets, which might have been an additional contributing factor for why issuers have given preference to non-ESG labelled debt'. BLOOMBERG
Business Times
15-07-2025
- Business
- Business Times
Building Asia's low-carbon industrial future
Asia's manufacturing boom has fuelled global growth – but now, it must lead the next wave: sustainable industrialisation. Today, industry accounts for about a third of global emissions, with Asia's share more than doubling in the past two decades. To remain competitive in a low-carbon world, industrialisation must now evolve. Governments and businesses are turning to low-carbon industrial parks – practical, scalable platforms to decarbonise operations and future-proof growth. Sembcorp, a major renewables player and industrial and urban solutions provider, is enabling this shift by developing industrial parks where sustainability is embedded from the start. From green master planning and low-carbon construction, to clean energy and shared utilities such as water recycling and treatment and circular industrial design, these parks are built to meet the demands of tomorrow's economy. Why low-carbon industrial parks matter Industrial decarbonisation has become a strategic priority for governments, manufacturers and investors. Net-zero targets across Asia are accelerating pressure to reduce emissions across operations and supply chains. At the same time, consumers are also demanding sustainable products, and manufacturing is expanding in emerging hubs such as Vietnam and Indonesia, driven by reshoring, digitalisation and growing domestic markets. Low-carbon industrial parks offer a ready-made platform to meet these demands. With reliable clean energy and shared infrastructure, they help businesses reduce carbon exposure, strengthen supply chain resilience, and sharpen their competitive advantage. These parks also support data-driven compliance with environmental, social and governance (ESG) standards – increasingly critical for global trade and investment. Beyond emissions, these industrial ecosystems promote responsible land use, inclusive employment and resource resilience – reducing strain on local grids and water systems while enhancing long-term viability. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Retrofitting the past, building for the future Many existing industrial parks in Asia were built for speed, not sustainability. These legacy sites still depend heavily on fossil fuels and lack the infrastructure needed for low-carbon operations. Retrofitting them requires targeted investment in renewables, energy storage and digital utilities. While the long-term gains are clear, upfront capital costs remain a barrier – especially for small and mid-sized manufacturers. Innovative financing and public-private partnerships are essential to overcoming these barriers. Equally vital is long-term regulatory clarity. Harmonised emissions standards, stable incentives, and cross-border policy alignment are essential to unlock capital and accelerate action. Without these, industrial decarbonisation will stall. Success depends on collaboration. Developers, tenants, energy providers, and governments must work together. Sembcorp's approach: Scaling low-carbon industrial parks across Asia With over 35 years of experience, Sembcorp has built a track record across Asia's fastest growing markets – from Vietnam and Indonesia to China. We have developed 24 industrial parks across 14,800 hectares, hosting over 1,000 tenants and drawing nearly US$58 billion in investment. By 2028, we aim to expand to 18,000 hectares and grow our leasable industrial space to 1.5 million square metres – supporting the next wave of sustainable manufacturing. Designing industrial parks for sustainability and performance Sembcorp's low-carbon industrial parks integrate renewable energy, circular utilities and ESG-enabling technology to support both business and environmental outcomes: Clean energy infrastructure Our parks already deploy solar energy, and we are exploring wind to diversify the mix and strengthen energy resilience. We offer tenants direct access to renewable energy via power purchase agreements and are investing in energy storage systems to enhance grid reliability. GoNetZero digital platform Tenants use our proprietary GoNetZero platform to manage renewable energy certificates, monitor carbon credits, and track emissions performance. This supports transparent ESG reporting and smarter, data-driven decision-making. Water and waste management We offer advanced treatment of complex industrial wastewater, enable water reuse, and reduce embodied carbon through sustainable construction materials. Green-certified facilities Our ready-built spaces meet green building standards – helping tenants cut operating costs, strengthen ESG credentials, and provide healthier, more productive workplaces. Circularity and industrial symbiosis Our parks are designed for closed-loop resource use – from converting plastic waste into building materials to enabling by-product exchange among tenants. These circular models create environmental value while enhancing operational efficiency. Lego's green factory in Vietnam At Sembcorp's Vietnam Singapore Industrial Park (VSIP) in Binh Duong, the Lego Group operates its most environmentally sustainable factory to date, which aims to run on 100 per cent renewable energy by 2026. This bears testament to Sembcorp's capability to support global manufacturers' sustainability goals. The 44-hectare facility is powered by on-site rooftop solar, and an adjacent energy centre developed by VSIP, which includes Vietnam's first large-scale battery storage installation. The site has achieved Leed Platinum and Gold certifications for its administrative and production buildings. Accelerating industrial transformation across Asia In Vietnam, Sembcorp has built a network of 20 VSIPs that integrate industrial space with renewable energy, water, and waste management solutions. In Indonesia, we are developing Kendal Industrial Park, the largest premier industrial township in Central Java and a designated Special Economic Zone. The park offers investment incentives and is emerging as a key hub for clean technology supply chains. In addition, we are launching Tembesi Innovation District, a low-carbon industrial park in Batam. In China, our high-tech and industrial parks support the country's dual carbon goals. We provide integrated clean energy, water reuse, and sustainable urban design – such as the Sino-Singapore Nanjing Eco Hi-Tech Island. The way forward Asia's industrial transformation is gaining momentum, but scaling low-carbon ecosystems will require bold cross-sector collaboration, long-term investment, and consistent regional policy frameworks. Sembcorp remains committed to accelerating this transition – integrating master planning, utilities and digital solutions to build the resilient, low-carbon industrial parks that Asia's growth demands. The writer is CEO, Urban, at Sembcorp
Business Times
13-07-2025
- Business
- Business Times
MAS-backed association releases extra guidance on how banks can use Singapore's taxonomy
[SINGAPORE] A sustainable finance industry association backed by the Monetary Authority of Singapore has released additional guidance on how financial institutions can make use of the Singapore-Asia taxonomy to structure green and transition financing. There are guidelines on how financiers and corporates can reference the taxonomy for business activities that are not fully aligned with the taxonomy. This includes situations where the non-alignment is due to reasons beyond the borrower's control; or where the assets enabling and value-chain activities supporting green and transition efforts are not set out in the taxonomy. In such cases, the guidance states that the financier can still consider funding such assets and projects within their green or transition financing frameworks, if they can be green by the sunset date, or if they will enable significant greenhouse gas emissions in the short term. Sunset dates refer to pre-determined deadlines or time limits set on activities that are transitioning to be greener. Transition activities, which are categorised as amber in the taxonomy, have sunset dates among one of their criteria. These dates are used to ensure that the financing is temporary as the activity eventually becomes green. Traffic-light system In a move similar to its South-east Asian neighbours, Singapore's sustainable finance taxonomy has adopted the use of a traffic-light system, with the introduction of an amber category to represent transition activities. A green category refers to businesses that are environmentally sustainable, while a red category consists of activities that are harmful to the climate. The Singapore-Asia taxonomy was finalised in December 2023 after four rounds of consultations, and is said to be the first globally to lay out criteria for transition activities. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Sustainable finance taxonomies set criteria and thresholds for a range of economic activities that would be considered eligible for sustainable and transition financing. Green financing is typically used for economic activities or companies that are already green, while transition financing is for carbon-intensive businesses that are looking to decarbonise. The guidance, which is published by the Singapore Sustainable Finance Association (SSFA), also lays out what banks can do when there is a lack of data on transition activities with a forward-looking screening criteria. 'Through this publication, SSFA seeks to encourage wider adoption of the Singapore-Asia Taxonomy and strengthen sustainable finance practices in the region, supporting capital mobilisation towards a more inclusive, resilient and net-zero future,' it said in a statement.
