Singapore will impose a levy on travelers departing from the country in 2026 to fund the use of sustainable aviation fuel (SAF), a green fuel that cost three to five times more than traditional jet fuels, as reported by Reuters on February 19. Singapore’s Civil Aviation Authority of Singapore (CAAS) will use the proceeds from the taxation to centrally procure SAF on behalf of airlines. While carriers will still pay for the fuel they use, they could benefit from cost efficiencies created by centralized procurement. The CAAS estimates that economy-class passengers may face an additional SGD3(USD2.2) levy for short-haul flights, SGD6(USD4.4) for medium-haul flights, and SGD16(USD11.8) for long-haul flights. These estimates are based on a national target to have 1% of SAF in all jet fuel consumption at Changi Airport and Seletar Airport in 2026, before reaching 3% to 5% of sustainable fuel use by 2030.

The move makes Singapore the first country to introduce a SAF levy to achieve its SAF consumption goals. Other countries, such as Japan, France, and Sweden have also set out requirements for minimum SAF usage. Differently, they leave airlines decide whether to have passengers pay for the additional costs of transition towards green jet fuels. The CAAS explained that a levy could fix the cost of using greener jet fuel, thus brining certainty to both travelers and airlines. It estimates that the adoption of SAF will reduce Singapore’s international aviation emissions by roughly 4% in 2030 compared to business-as-usual levels.

S****ources:

https://www.reuters.com/sustainability/singapore-green-jet-fuel-levy-travellers-ignites-funding-debate-2024-02-19/

https://www.straitstimes.com/singapore/transport/travellers-to-pay-more-for-flights-leaving-s-pore-from-2026-to-support-use-of-greener-jet-fuel