Singapore to Impose SAF Levy on Flights Starting in 2026
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Singapore will impose a Sustainable Aviation Fuel levy on departing flights from 2026 to create predictable demand and meet a 1% SAF usage target.
Key Takeaways
- •Imposes a Sustainable Aviation Fuel (SAF) levy on departing flights from 2026.
- •Mandates 1% SAF usage starting in 2026, planned to increase to 3-5% by 2030.
- •Funds centralized SAF procurement to aggregate demand and manage high costs.
- •Sets passenger levy from S$1 to S$10.40 based on flight distance and class.
The Civil Aviation Authority of Singapore (CAAS) has announced it will introduce a mandatory levy on flights departing the country to support the adoption of Sustainable Aviation Fuel (SAF). The policy, part of the broader Singapore Sustainable Air Hub Blueprint, aims to create predictable demand for greener fuels and advance the nation's goal of achieving net-zero aviation emissions by 2050. The levy is designed to address the high cost and constrained global supply of SAF.
Under the new regulation, Singapore has set a national target for 1% SAF usage for all flights departing the country, beginning in 2026. This target is scheduled to increase to between 3-5% by 2030. The collected levy will be used to fund the central procurement of SAF through a dedicated entity, ensuring a stable supply for airlines operating out of Changi Airport. This centralized model is intended to aggregate demand and secure more favorable pricing in the nascent SAF market.
Levy Structure and Implementation
The SAF levy will be applied to tickets sold from April 1, 2026, for flights departing on or after October 1, 2026. The amount will vary based on flight distance and travel class. According to the CAAS press release, the charge for economy class passengers will range from S$1 to S$10.40. For example, an economy flight to Bangkok will incur a S$1 levy, a flight to Tokyo will have a S$2.80 levy, and a long-haul flight to London will add S$6.40.
Passengers traveling in premium cabins, such as business and first class, will be charged a levy four times the economy rate for the same destination. The CAAS has confirmed that passengers transiting through Singapore's Changi Airport will not be subject to the levy.
A corresponding levy will also be applied to air cargo. The charge for freight will range from S$0.01 to S$0.15 per kilogram, also dependent on the route's distance. This ensures that all sectors of aviation contribute to the sustainability initiative.
Global SAF Context and Challenges
Singapore's move comes as the global aviation industry grapples with the high cost and limited availability of SAF. According to the International Air Transport Association (IATA), SAF can cost between two and five times more than conventional jet fuel, posing a significant financial barrier for airlines. While global SAF production is increasing—from over 158 million gallons in 2023 to a projected 500 million gallons in 2024, according to the SAF Outlook report—supply remains a fraction of what is needed for industry-wide decarbonization.
Several other jurisdictions, including the European Union and the United Kingdom, have also established or are planning SAF mandates. However, Singapore's approach of using a fixed levy to fund a central purchasing body is a distinct model aimed at de-risking airline investment and stabilizing the market. Han Kok Juan, Director-General of CAAS, stated, “The introduction of the SAF Levy marks a major step forward in Singapore's effort to build a more sustainable and competitive air hub. It provides a mechanism for all aviation users to do their part to contribute to sustainability at a cost which is manageable for the air hub.”
Industry Reaction
The initiative has been met with cautious optimism from industry bodies. IATA, which has historically been critical of taxes and levies, has acknowledged the potential of Singapore's unique model. Willie Walsh, Director-General of IATA, commented, “I think we're all looking to see what happens in Singapore because it would be great if it proved to be an effective model for stimulating the growth of production. So I remain optimistic that we will see a positive outcome from the levy.”
This sentiment reflects a broader industry understanding that government-led initiatives are necessary to scale up SAF production and make it economically viable. The centralized procurement mechanism is seen as a key element that could help overcome the classic chicken-and-egg problem where airlines are hesitant to commit to purchase agreements without a stable supply, and producers are hesitant to invest in new facilities without guaranteed demand.
Why This Matters
Singapore's SAF levy and centralized procurement system represent a significant real-world test for a new decarbonization funding model. If successful, it could provide a replicable blueprint for other major aviation hubs seeking to meet ambitious emissions reduction targets without placing an unmanageable financial burden on individual airlines. The policy directly tackles the core challenges of SAF adoption—high cost and uncertain supply—by creating a state-managed demand signal, potentially accelerating the global transition to greener aviation fuels.
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Written by Ujjwal Sukhwani
Aviation News Editor & Industry Analyst delivering clear coverage for a worldwide audience. Covers flight operations, safety regulations, and market trends with expert analysis.
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