- Singapore plans for a levy on flight ticket prices as the aviation industry seeks a viable funding model.
- The plans aim for all departing flights to use 1 per cent sustainable aviation fuel (SAF) from 2026, rising to 3-5 per cent by 2030.
Singapore’s transport minister, Chee Hong Tat, has announced that Singapore plans for a levy on flight ticket prices as the aviation industry seeks a viable funding model.
The plans announced at an industry summit on the eve of the Singapore Airshow aim for all departing flights to use 1 per cent sustainable aviation fuel (SAF) from 2026, rising to 3-5 per cent by 2030, subject to global developments and the wider availability and adoption of SAF.
Also, SAF, which is produced synthetically or from biological materials such as used cooking oil or wood chips, currently accounts for 0.2 per cent of the jet fuel market and costs up to five times more than conventional jet fuel.
A company representative from Neste, Singapore’s only current SAF producer, said that Neste has a capacity of up to 1 million metric tons of fuel per year at the Singapore refinery that began operations last year. That is more than ten times the volume required to reach the 2026 target.
Neste produced 251,000 tons of SAF globally in 2023, its most recent financial report said. The aviation industry said SAF use needs to rise to 65% by 2050 as part of plans to reach “net zero” emissions, though that will require an estimated $1.45 trillion to $3.2 trillion of capital spending.
Furthermore, IATA Director General Willie Walsh, who represents about 320 airlines, at the Singapore summit estimates that the global airline industry will grow at about 3.3% per year over the next 20 years, significantly lower than between 2010 and 2019, because of environmental challenges and supply chain issues.
Walsh also said that taxation to pay for aviation sustainability measures might not reduce the number of flights but could price some people out of flying and lead to empty seats, which is unsuitable for the environment.
Luis Felipe de Oliveira, director general of Airports Council International, said governments need to invest in new SAF refineries to help bring down the cost. De Oliveira added, “The solution is not capacity restrictions, the solution is not taxation; the solution is finding ways that you can work together to increase production that will be used by the airlines in the system.”