Singapore Plans To Introduce SAF Usage Targets Funded By Ticket Levy

SINGAPORE—The Singaporean government has outlined a plan to require sustainable aviation fuel (SAF) uplift by airlines, with a new passenger levy to fund the initiative and purchase SAF.

An initial target has been set to achieve 1% SAF usage for flights departing Singapore in 2026, Transport Minister Chee Hong Tat said Feb. 19 the Changi Aviation Summit, held in parallel with the Singapore Airshow. The government’s goal is to raise the SAF uplift target to 3-5% by 2030, Chee said.

After consultation with stakeholders, the ministry has assessed that the cost impact of the 1% target is manageable. The government will monitor developments in the SAF industry before finalizing the goals beyond 2026, Chee said. There will also be further consultation with industry on the plan.

Singapore will introduce a levy to purchase the SAF required to meet the targets, in order “to provide cost certainty to airlines and travelers,” Chee said. This levy will be fixed at an amount based on the relevant SAF uplift target and the projected price.

Because the levy will be fixed in advance, if the price of SAF goes up the uplift goal may not be met, or it could be exceeded if the price drops.

Passenger levies would vary depending on class of travel and route distance. The ministry estimates that the cost of the levy would be about S$3 ($2.2) for an economy class ticket from Singapore to Bangkok, and about S$16 on a flight from Singapore to London.

The SAF proposal is a key part of the government’s emissions reduction goals. The domestic target is to reduce emissions from airport operations by 20% versus 2019 levels by 2030. A broader goal for domestic and international operations is to achieve net zero emissions by 2050.

These initiatives will be included in the Singapore Sustainable Air Hub Blueprint. They are based on recommendations by the International Advisory Panel on Sustainable Air Hub released in September 2022. More details will be released at the official publication of the blueprint.

Chee noted that the SAF uplift requirements “will provide an important demand signal to fuel producers and give them the incentive to invest in new SAF production facilities.”

However, he stressed that the government will be careful not to place an onerous financial burden on the industry. It will look to strike a “balance [between] sustainability and competitiveness to support the long-term growth” of the hub.