Singapore Introduces First SAF Levy to Fund Greener Aviation

Singapore will become the first country in Southeast Asia to impose a dedicated Sustainable Aviation Fuel (SAF) levy, raising ticket prices by 75 cents to US$32 to accelerate cleaner aviation adoption. The surcharge will apply to flights departing from Changi Airport after October 1, 2026, and will vary by distance and cabin class. Authorities say the levy ensures that all aviation users contribute to sustainability while keeping costs manageable.

The funds will support the country’s growing SAF ecosystem. Singapore already hosts the region’s largest SAF production facility and is beginning construction of a next-generation plant this year, with supply agreements in place with carriers including Singapore Airlines and JetBlue. SAF, often produced from used cooking oil and agricultural waste, can cut aviation lifecycle emissions by up to 65 per cent, according to industry estimates.

The move comes as Southeast Asia positions itself as a global SAF production hub. Thailand, Malaysia, Vietnam and Indonesia have all expanded domestic SAF output or announced new facilities, leveraging the region’s access to agricultural and forest waste feedstock. ASEAN estimates the region could produce 8.5 million barrels of SAF per day by 2050 if policies and investment momentum continue.

Globally, however, policy uncertainty remains. While aviation accounts for roughly 2.5 per cent of annual global carbon emissions and demand continues to rise, SAF scale-up faces headwinds, particularly amid clean energy policy reversals in the United States. Industry groups stress that sustained government support will be essential to maintain growth and meet the international goal of net zero aviation emissions by 2050.

Singapore's SAF levy is the first practical mechanism to aggregate SAF demand at scale in Asia, and it changes procurement economics for every airline flying through Changi. Our energy-transition and supply-chain-and-operations teams help airlines, airports and fuel producers evaluate what SAF levy structures mean for their fuel strategy and Scope 3 disclosure.