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Singapore to impose green jet fuel levy on departing flights

Singapore has announced plans to introduce a levy on departing flights, shifting the cost burden of transitioning to green jet fuel onto travellers.

The announcement was made by Singapore’s Transport Minister at an industry summit on the eve of the Singapore Airshow. The city-state aims for all departing flights to use 1% sustainable aviation fuel (SAF) by 2026, with plans to increase to 3-5% by 2030, contingent on global developments and wider SAF availability.

Acknowledging the challenges in decarbonising the aviation sector, the Minister emphasised the need for modest sustainability goals initially to prevent negative impacts on the air hub, economy, and travel costs for passengers. Aviation contributes approximately 2% of global emissions, posing difficulties in achieving carbon neutrality.

In contrast to European regulations, where carriers decide whether to pass SAF costs to passengers, Singapore’s levy will vary based on factors like flight distance and travel class. For instance, an economy class ticket on direct flights from Singapore to Bangkok, Tokyo, and London is estimated to increase by around SGD 3, SGD 6, and SGD 16, respectively, in 2026 to cover SAF costs.

SAF, comprising synthetic processes or biological materials like used cooking oil, currently represents 0.2% of the jet fuel market and is up to five times more expensive than conventional jet fuel. Challenges in securing bio-derived feed contribute to the high costs, as mentioned by industry experts.

While Singapore’s SAF production capacity exceeds the 1% target for 2026, the aviation industry aims for SAF use to reach 65% by 2050 to achieve “net zero” emissions. This ambitious goal requires an estimated USD 1.45 trillion to USD 3.2 trillion in capital spending.

Willie Walsh, Director General, IATA, highlighted the necessity of reflecting transition costs in ticket prices, potentially dampening growth. The global airline industry is expected to grow at about 3.3% annually over the next two decades, significantly lower than the previous decade due to environmental challenges and supply chain issues.

Amid discussions on sustainability at the Singapore Airshow, Airbus plans to showcase its A350-1000 wide-body aircraft with a 35% blend of SAF supplied by Shell Aviation from used cooking oil and tallow. Airlines emphasise the importance of using efficient modern planes as an effective interim solution while waiting for increased SAF production.

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