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The Blueprint

The Economic Cost and Opportunity of Food Waste

The Economic Cost and Opportunity of Food Waste

  • Food waste is a major climate and social issue, contributing up to 10% of global greenhouse gas emissions while millions face hunger, making reduction of food loss and waste from farm to fork an urgent priority.
  • Singapore is strengthening food waste policies and infrastructure to reduce incineration and support more sustainable food waste management and recycling.

Every lunchtime, as we walk into a hawker centre, we are faced with a familiar question: What should I eat today? At the same time, another question should follow, how much food are we going to waste today?

Fig.1: Food waste represents a loss of valuable resources used in agriculture and additional wastage occurs throughout the supply chain.

 

Food waste is a major issue affecting many parts of the world. In 2022 alone, a whopping 1.05 billion tonnes of food were wasted, while 783 million people went hungry and one-third of the global population faced food insecurity. This stark contradiction reveals that the world produces more than enough food for everyone, yet large volumes go uneaten every day. Food waste is therefore not only an environmental challenge but also a profound social concern.

Food loss and waste account for 8 to 10% of annual global greenhouse gas emissions, nearly five times the total emissions from the aviation sector. Given the vast resources needed for food production, throwing food away also means wasted land, water, energy, and labour. The global economic cost of food loss and waste is estimated at USD 1 trillion every year.

As the first week of COP30 comes to a close, food waste emerged as a critical topic of discussion. The UN Environment Programme and the UN Climate High-Level Champions launched the Food Waste Breakthrough initiative, aimed at halving global food waste by 2030 and reducing methane emissions by up to 7%. Additionally, the No Organic Waste (NOW) Plan was introduced, committing to cut 30% of methane emissions from organic waste by 2030, recover 20 million tonnes of surplus food, and provide meals for 50 million people. A common theme between these two initiatives is the aim to reduce methane emissions. Methane emissions from food waste accounts for up to 14 per cent of total methane emissions. This climate pollutant that is 84 times more potent at warming the atmosphere than carbon dioxide over 20 years. Hence, the need to reduce food waste is an urgent one.

Fig. 2: Percentage of initial production lost or wasted at different stages of the supply chain for fruits and vegetables.

 

In 2022, according to the UN Environment Programme (UNEP), 19% of food available to consumers was wasted at the retail, food service, and household level, on top of the 13% of food lost in the supply chain, as estimated by the FAO. Such waste represents a missed opportunity to nourish vulnerable communities and poses a significant burden on our planet. To zoom into fruits and vegetables, in South and Southeast Asia, the processing stage is where the most amount of waste happens. This presents opportunities to reduce the waste generated at this stage.

In Singapore, we often pride ourselves for our food culture that even hawker food is Michelin Starred. However, we too are not spared from the negative externality of food waste which we generate. These costs of the negative externalities are not only the value of the food and its disposal, but also the environmental damage that food waste causes. Looking into the consumption stage of the food supply chain in Singapore, food that is not recycled is sent to Waste-to-Energy (WtE) plants for incineration. Food waste is treated as Municipal Solid Waste (MSW), and every ton of MSW incinerated releases about 134 kg of CO₂, 88 g of CH₄, and 69 g of N₂O.

 

Global Warming Potential Emissions(kg) CO2e
CO2 1 134 134
CH4 28 0.088 2.464
N2O 265 0.069 18.285
Total CO2e (metric tonnes) 0.154749
Carbon Tax (at the rate of S$25 in 2024)(S/tonne) 3.868725
Food waste disposed of in 2024 (tonnes) 646,000.00
Environmental Cost (S$) 2,499,196.35

Table 1: Calculation of the environmental cost of food wastes in Singapore in 2024

 

To better understand the environmental cost of the negative externality of food waste, the approach of calculating carbon tax can be used to provide a rough estimation. In 2024, around 646,000 tonnes of food waste were disposed of, resulting in an estimated environmental cost of about SGD 2.5 million. With the average household in Singapore spending about S$1,800 per month on food and non-alcoholic beverages, the economic cost of food waste could have supported the monthly food needs of approximately 115 families. Instead of being lost through waste, these resources could have strengthened social safety nets and provided meaningful support for low-income households. Redirecting the value of wasted food into community assistance would not only reduce financial strain for vulnerable families but also contribute to greater food security and social equity in Singapore.

To encourage food waste recycling, Singapore uses policies that target both demand and supply. On the demand side, the government supports proper food waste management through financial and regulatory measures. One key initiative is the 3R Fund, which co-funds projects to up to 80% of qualifying cost. In addition, the Resource Sustainability Act (RSA) requires large food waste generators, such as shopping malls and hotels, to segregate their food waste from other wastes starting from 2024. These policies aim to reduce the amount of food that is disposed of at incineration plants.

Fig. 3: Tuas Nexus Facility

 

On the supply side, the government invests in infrastructure and enforces regulations to improve food waste treatment. A major development is the SGD 1.5 billion Tuas Nexus facility, which will process food waste and produce energy. Under the RSA, new large commercial and industrial buildings are also required to set aside space for on-site food waste treatment systems, to build capacity to ensure that future developments can manage waste more sustainably.

As investors, we prefer companies that actively reduce their resource use and recycle the waste generated from their operations. This is especially important for industries involved in food and beverage production and services, such as hotels. By reducing food waste, these companies support SDG 12.3, which aims to halve global food waste at the retail and consumer levels and reduce food losses along the supply chain, including after harvest. Food waste reduction also aligns with the new COP30 targets to lower methane emissions from organic waste.

 

The Blueprint

With the ever-changing landscape around us, it can get overwhelming to stay up-to-date. The Blueprint highlights pertinent global Environmental, Social, and Governance (ESG) issues and their importance to investors and the wider community. We look forward to engaging in discussions about the interconnections between climate, nature, and social outcomes that impact our investments and our futures.

Important Information

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs.

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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With effect from 1st July 2014, this FATCA Notice (the “Notice”) forms part of the terms and conditions of our products and services (the “Terms and Conditions”) governing your relationship (“you”, “your”, “yours” referred to herein include joint-account holders and beneficiary holders of an entity who are a natural person) with Phillip Capital Management (S) Ltd and its related corporations (collectively referred to herein as “PCM”, “us”, “we” or “our”) and should be read in conjunction with those Terms and Conditions, including those under our Personal Data Protection Notice.The existing terms and conditions of any contractual agreement entered into between PCM a nd you (the “Existing Terms and Conditions”) remain in full force and effect. In the event of any conflict or inconsistency between the provisions of this Notice and those of the Existing Terms and Conditions, the provisions of this Notice shall prevail.

We may from time to time update the Terms and Conditions listed here to ensure their consistency with our future developments,industry trends and/or any changes in legal or regulatory requirements. Such updates will be published at http://www.phillipfunds.com/ .

On March 18, 2010, the United States of America’s (“U.S.”) Hiring Incentives to Restore Employment Act of 2010 (Pub.L.111-147H.R.2847)) (the “Act”) was enacted into law. Section 501(a) of the Act added a new chapter 4 (sections 1471-1474) to Subtitle A of the U.S.’s Internal Revenue Code (Code).Chapter 4 expands the information reporting requirements imposed on foreign financial institutions (as defined in section 1471(d)(4)) (FFIs) with respect to certain U.S. accounts (as defined in section 1471(d)(1)) of specified U.S. person, and imposes withholding, documentation, and reporting requirements with respect to certain payments made to certain foreign entities.

PCM will be obliged to comply with the provisions of FATCA under the terms of the inter-governmental agreement (“IGA”) Model I between the U.S. and Singapore and under the terms of Singapore’s subsidiary legislation which will be issued pursuant to Singapore’s Income Tax Act (Cap. 134) to implement the IGA. “FATCA” or “Foreign Account Tax Compliance Act” means Chapter 4 (sections 1471 to 1474) to Subtitle A of the U.S. Internal Revenue Code.

“FATCA” or “Foreign Account Tax Compliance Act” means Chapter 4 (sections 1471 to 1474) to Subtitle A of the U.S.Internal Revenue Code.

“U.S. person” means a U.S. citizen or resident individual, a partnership or corporation organised in the U.S. or under the laws of the U.S. or any state of the U.S. thereof, a trust if: (i) a court within the U.S.would have authority under the applicable law to render orders or judgments concerning substantially all issues regarding the administration of the trust; and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust, or an estate of a decedent that is a citizen or resident of the U.S..This definition shall be interpreted in accordance with the provisions of the U.S. Internal Revenue Code.

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PERSONAL DATA PROTECTION NOTICE

With effect from 1st July 2014, this Personal Data Protection Notice (the “Notice”) forms part of the terms and conditions of our products and services (the “Terms and Conditions”) governing your relationship (“you”, “your”, “yours” referred to herein include joint-account holders and beneficiary holders of an entity who are a natural person) with Phillip Capital Management (S) Ltd and its related corporations (collectively referred to herein as “PCM”, “us”, “we” or “our”). Without prejudice to the existing terms and conditions of any contractual agreement entered into between PCM and you (the “Existing Terms and Conditions”), which remain in full force and effect, this Notice shall be read in conjunction with the Existing Terms and Conditions. In the event of any conflict or inconsistency between the provisions of this Notice and those of the Existing Terms and Conditions, the provisions of this Notice shall prevail.

We are required under the Personal Data Protection Act (“PDPA”) to put in place the necessary arrangements to protect personal data and comply with the PDPA. Personal data includes any data and information, whether true or not, about an individual (a natural person) who can be identified from that data or information, such as your name, NRIC, passport or other identification number, telephone numbers, address, email address and any other information relating to individuals which you or your authorized representative have provided to us or we are likely to have access to (“Personal Data”).

This Notice outlines the purposes for the collection, use and/or disclosure of your Personal Data by PCM, how we protect your Personal Data and your rights with respect to the collection, use and/or disclosure of your Personal Data. This Notice supplements but does not supersede nor replace any other consents which you may have previously provided to us in respect of your Personal Data, and your consents herein are additional to any rights which we may have at law to collect, use and/or disclose your Personal Data. We may from time to time update the Terms and Conditions listed here to ensure their consistency with our future developments, industry trends and/or any changes in legal or regulatory requirements. Such updates will be published at http://www.phillipfunds.com/.

1. PCM may collect, use and/or disclose your personal data for any of the following purposes listed below (collectively “Permitted Purposes”):-

i) carrying out activities, duties and obligations in connection with our products and services which you have applied for, including evaluating your eligibility and credit profile, verifying the identity or authority of your representatives, administration of your account and/or managing our overall relationship with you (including but not limited to the outsourcing of any of our functions to service providers or vendors, due diligence checks, accounting and portfolio valuation, billing and collections, business continuity and print management);

(ii) developing new services and/or products;

(iii) providing you with marketing, advertising and promotional information, materials and/or documents related to financial products and/or services that we may be selling, marketing, offering or promoting, whether such financial products or services exist now or are created in the future;

(iv) marketing and promotional events, including but not limited to images, photographs or videos of you during the events;

(v) meeting or complying with PCM’s internal policies and procedures and any applicable rules, law, regulations, codes of practice or guidelines, orders or requests issued by any court, legal or regulatory bodies (both national and international) (including but not limited to disclosures to regulatory authorities or financial industry self-regulatory bodies; conducting audit checks (internal/external), surveillance and investigation; handling of customer feedback or complaint; dispute resolutions; recording of telephone conversations and/or electronic communications with you; conducting checks or investigations for prevention and/or detection of financial crimes such as money-laundering, financing of terrorism, fraud and/or bribery etc.);

(vi) legal purposes, including but not limited to obtaining legal advice and enforcing or defending our legal and/or contractual rights against you;

(vii) risk management, statistical and trend analysis;

(viii) processing and/or storing data and/or information related to your relationship with PCM.

2. PCM, in order to facilitate the discharge of its duties and obligations to you, may be required to disclose your Personal Data for the Permitted Purposes and/or for processing of the Permitted Purposes on a need-to-know basis, to any of the following entities and the directors, officers, staff, employees and agents of any such entities, whether located within or outside Singapore (“Relevant Persons”):-

(i) any associate or related company of PCM and the directors, officers, staff, employees and agents of any such person;

(ii) any actual or proposed assignee or transferee of any of PCM’s rights and obligations or any actual or proposed delegate of any of PCM’s functions and duties under its contractual relationship with you;

(iii) any relevant governmental, supervisory or regulatory authority or court of law, including the Monetary Authority of Singapore, to which PCM is or may be subject;

(ix) any person in order to give effect to any instruction from you or any person acting or purporting to be acting on behalf of you;

(x) any person as PCM may consider necessary in order to comply with any order, directive or policy of any court or governmental or regulatory authority in any jurisdiction;

(xi) any person when required to do so in accordance with the laws of any applicable jurisdiction or rules of any professional self-regulatory bodies or securities exchanges;

(xii) any agent, contractor or third party service provider who provides their services in connection with the operation of PCM’s fund management business, including but not limited to the custodians, trustees, fund administrators, registrars, banks, legal firms, accounting and auditing firms, printing firms, IT service providers, credit reference agencies, credit bureaus, data screening entities for the purpose of due diligence checks and the prevention and detection of financial crimes.

3. PCM’s related companies and third party service providers shall be bound by the same provisions as set out in this Notice and we will require them to ensure that your Personal Data are kept confidential and secure.

4. You represent and warrant that your Personal Data provided to us is accurate and complete for us to make a decision that affects you or to disclose your Personal Data to the above-mentioned Relevant Persons on a need-to-know basis. Where applicable, when you provided Personal Data relating to another individual (e.g. your dependent, spouse, children and/or parents) to us, you represent and warrant that such Personal Data is accurate and complete and the consent of that individual has been obtained for the collection, use and disclosure of his/her Personal Data in accordance with the provisions listed in this Notice.

5. We will retain your Personal Data to the extent that one or more of the Purposes for which your Personal Data was collected, used and/or disclosed is/are still valid and for legal, regulatory reporting or regulatory investigations purposes for which retention may be necessary.

6. PCM may terminate any contractual relationship which you may have with us, if any information provided to us is insufficient, misleading or erroneous or if any information that is required to be disclosed to any regulatory authority for compliance with any law or regulation is not provided by you.

7. You may request access to or make corrections to your Personal Data records. Depending on the information requested PCM may charge a small fee when you request access to your Personal Data. Upon your request and subject to the provisions under the PDPA, PCM will respond accordingly within reasonably possible time. Please submit your request to our Data Protection Officer via [email protected].

8. You may withdraw your consent to any use or disclosure of your Personal Data for any or all of the Purposes as set out in this Notice by giving written notice to us. If you withdraw your consent(s), depending on the nature of your request, we may not be in a position to continue to provide our products or services to you or administer any contractual relationship in place. Such withdrawal may be considered a termination by you of any agreement you may have with us. Where there is any breach of your contractual obligations or undertakings, PCM’s legal rights and remedies are expressly reserved in such event.

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