How Singapore Airlines, Google, and DBS will fund future sustainable fuel.

The Civil Aviation Authority of Singapore (CAAS) is piloting a new voluntary SAF procurement model. This is a major step for Singapore centralised SAF procurement. The trial involves a coalition of 11 organizations. This includes major global firms like Google, DBS Bank, and Singapore Airlines. The goal is to refine processes for a national SAF funding mechanism. This mechanism is crucial for reduce aviation emissions in the region.

Testing the Centralised Model

The trial is managed by the Singapore Sustainable Aviation Fuel Company (SAFCo). CAAS established SAFCo in October 2025. The company's role is to centrally buy sustainable aviation fuel (SAF) for Singapore's air hub. The voluntary trial allows companies to purchase SAF and its Environmental Attributes (EAs). This is done through SAFCo's aggregated demand model. The trial tests the end-to-end operational and accounting processes. This will support the upcoming mandatory national SAF policy implementation.

Nine companies signed a memorandum of understanding on February 2, 2026. These firms include Singapore Airlines, its low-cost unit Scoot, and Changi Airport Group. Non-aviation partners like Google, DBS Bank, and Temasek are also participating. Aggregating demand is expected to create economies of scale. This should lead to more affordable and stable SAF supply.

The Future SAF Funding Mechanism

The voluntary SAF procurement model is a precursor to a mandatory system. Singapore will impose a green levy on departing flights starting October 1, 2026. This world-first levy will be collected from passengers and cargo. The fees will fund the purchase of SAF to meet national targets.

Key details of the SAF levy and targets:

• Levy Start Date: October 1, 2026, for departing flights.
• Target 2026: 1% Sustainable Aviation Fuel trial usage for all flights from Singapore.
• Target 2030: Increase SAF usage to 3-5%.
• Passenger Cost: The levy ranges from S$1 to S$41.60 per ticket. The cost varies based on distance and cabin class.

Industry Impact and Decarbonization

This initiative is a significant step in global aviation decarbonization efforts. SAF is critical for the sector to reach net-zero emissions by 2050. SAF can cut emissions by up to 80% compared to traditional jet fuel. However, SAF currently costs much more than conventional fuel. The centralized procurement model addresses this cost challenge. It uses pooled funds to lower the price for all airlines. This makes SAF adoption more manageable. The trial helps the Google Singapore Airlines DBS coalition meet their own sustainability goals. It also provides a working template for the mandatory levy. This positions Singapore as a leader in creating a robust future SAF funding mechanism.

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