Singapore to Implement SAF Levy for Flights from October 2026

Singapore will implement a first-of-its-kind levy on Sustainable Aviation Fuel (SAF) for all flights departing from Changi International Airport, with the new charge taking effect on October 1, 2026. The policy is a central component of the Singapore Sustainable Air Hub Blueprint, a strategic plan designed to decarbonize the nation's aviation sector. The move establishes Singapore as a global leader in implementing direct financial measures to accelerate the adoption of greener fuels.

The levy will directly impact passenger ticket prices and cargo costs. Funds collected will be used for the central procurement of SAF by the Civil Aviation Authority of Singapore (CAAS), which will aggregate demand to secure the fuel at more competitive prices. This approach aims to provide cost certainty for airlines and stimulate the development of the nascent SAF industry in Southeast Asia.

Levy Structure and Implementation

According to the CAAS, the levy will be applied to tickets sold from April 1, 2026, for flights departing on or after the October 1 implementation date. The cost for passengers will vary based on travel distance and cabin class.

For economy class travelers, the levy will range from S$1 to S$10.40 (approximately $0.75 to $7.70 USD). Passengers in premium cabins, including business and first class, will face a higher charge ranging from S$4 to S$41.60, set at four times the economy rate for the same destination. The CAAS has confirmed that transit passengers connecting through Changi Airport will be exempt from the levy. For air cargo, the charge will range from S$0.01 to S$0.15 per kilogram, also dependent on the destination.

National Targets and Regional Context

The implementation of the levy is designed to support Singapore's ambitious national SAF targets. The country aims for SAF to constitute 1% of all jet fuel used at its airports in 2026, with a goal to increase this to 3-5% by 2030. This policy aligns with a broader trend of growing SAF production capabilities in the region.

Southeast Asia is positioned to become a significant producer of sustainable fuels. A report from the Roundtable on Sustainable Biomaterials, supported by Boeing, estimates the region could supply approximately 12% of global SAF demand by 2050. An ASEAN SAF 2050 Outlook report suggests an even greater potential of up to 8.5 million barrels per day. Despite this potential, SAF usage remains minimal globally, accounting for only 0.2% of commercial jet fuel use in 2023, according to Boeing data.

Industry Reaction and Global Precedent

While Singapore's levy is a pioneering step, it has drawn a mixed response from industry bodies. The International Air Transport Association (IATA) has expressed concern that the measure could have a "dampening effect on air travel." Dr. Marie Owens Thomsen, IATA's senior vice-president for sustainability, acknowledged the policy was suitable for Singapore's specific circumstances but noted that the organization generally prefers government incentives over mandates or levies to promote SAF production.

Singapore's approach differs from that of other regions. The European Union, for example, has opted for SAF blending mandates under its ReFuelEU Aviation initiative, which requires fuel suppliers to blend increasing amounts of SAF with conventional jet fuel. The Singaporean model, by contrast, uses a centralized procurement system funded by a direct levy on travelers and shippers.

In a parliamentary session, Singapore's Minister for Transport, Chee Hong Tat, confirmed the levy's broad application, stating, "The Sustainable Aviation Fuel (SAF) levy will apply to all flights departing Singapore from 2026, including business aviation flights." This comprehensive application underscores the government's commitment to the policy as a cornerstone of its Singapore Sustainable Air Hub Blueprint.

Why This Matters

In my view, Singapore's SAF levy is more than just a regional environmental policy; it is a critical global test case. It directly confronts the question of who pays for aviation's green transition—the airline, the passenger, or the taxpayer. By placing a transparent, albeit modest, cost on the ticket, Singapore is betting that travelers are willing to contribute directly to decarbonization. The success or failure of this levy-and-procure model will be watched closely by regulators worldwide and could shape how other major aviation hubs approach their own sustainability mandates.

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