The announcement of a new levy to support the use of sustainable aviation fuel in Singapore has been met with mixed reactions. While some see it as a necessary step towards reducing carbon emissions and promoting sustainability in the aviation industry, others are concerned about the impact it will have on airfare prices.
Starting in 2026, travellers flying out of Singapore will face higher airfares due to a levy imposed to support the use of sustainable aviation fuel. The move is part of a broader sustainable air hub blueprint launched by Transport Minister Chee Hong Tat at the second Changi Aviation Summit on February 19, 2024.
The levy will be measured based on factors such as flight class and distance, with economy class passengers facing additional charges of S$3 for short-haul flights, S$6 for medium-haul flights, and S$16 for long-haul flights. Higher levies will be imposed for those flying in premium class.
The additional levy will be used to purchase sustainable aviation fuel for airlines, with the goal of achieving a one per cent target for sustainable aviation fuel use in 2026 and increasing it to three to five per cent by 2030. This move is expected to contribute approximately 65 per cent of the carbon emission reduction needed to achieve net-zero emissions by 2050.
The Civil Aviation Authority of Singapore (CAAS) stated that Singapore will be the first country in the world to introduce a levy to meet its sustainable aviation fuel goals, as other countries have implemented their goals in the form of mandates based on fixed volumes. By imposing a levy instead of a mandate, CAAS hopes to fix the cost of using greener jet fuel, creating better clarity for travellers and airlines.
The sustainable jet fuel is made from waste materials such as used cooking oil and is said to reduce carbon emissions by up to 80 per cent per life cycle compared to current conventional fuel. While the details of the levy are still being finalised, CAAS has suggested that passengers may incur an additional charge depending on factors such as flight class and distance.
The move to introduce a levy for sustainable aviation fuel goals is in line with Singapore’s broader commitment to sustainability and reducing carbon emissions. It is expected that more details will be announced in 2025, before the implementation date, as CAAS continues to consult stakeholders.
While the levy will undoubtedly increase airfare prices, it is hoped that it will help promote the use of sustainable aviation fuel and reduce carbon emissions in the aviation industry. As CAAS has noted, the use of sustainable aviation fuel is a critical pathway for the decarbonisation of aviation, and the move to introduce a levy is an important step towards achieving this goal.