Singapore's Transport Minister announced on Monday that the country will mandate the use of sustainable aviation fuel (SAF) for all outbound flights starting in 2026. This move is part of Singapore's commitment to the global aviation industry's shift towards more environmentally friendly fuel. The plan, unveiled by Chee Hong Tat at the Changi Aviation Summit, sets a target of 1% SAF usage from 2026, with an aim to increase this to 3-5% by 2030, depending on global trends and the broader acceptance and availability of SAF.
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The Civil Aviation Authority of Singapore (CAAS), which formulated the plan in collaboration with industry stakeholders, stated in a press release that SAF usage is a crucial step towards aviation decarbonization. It is projected to account for approximately 65% of the carbon emission reductions required to achieve net-zero emissions by 2050. SAF can be produced synthetically or from biological materials such as used cooking oil or wood chips.
Currently, SAF represents only 0.2% of the jet fuel market. However, the aviation industry anticipates that this figure will rise to 65% by 2050 as part of its strategy to achieve "net-zero" emissions, although this will necessitate an estimated capital expenditure of $1.45 trillion to $3.2 trillion. SAF manufacturers express concern about the uncertainty of their fuel's market demand, while airlines argue that supply is insufficient and not competitively priced. SAF is currently up to five times more expensive than conventional jet fuel.
To address these issues, CAAS intends to implement an SAF levy to provide price stability for airlines and passengers. The levy will be a fixed amount, determined by the SAF target and the projected SAF price at that time, and will fluctuate based on variables such as travel distance and ticket class. For instance, to support a 1% SAF increase in 2026, the levy could raise the ticket price for an economy class passenger on a direct flight from Singapore to Bangkok, Tokyo, and London by approximately S$3 ($2.23), S$6, and S$16, respectively. Higher levies will be charged for premium class passengers, according to Singapore's aviation regulator.