Singapore okays bill to fund SAF mandate
Singapore announced the passage of the Civil Aviation Authority of Singapore (CAAS) (Amendment) Bill this week to fund the sustainable aviation fuel (SAF) mandate kicking off from 2026 onwards.
The bill will allow the authority to collect a SAF levy to setup a dedicated SAF fund.
Funds raised through the levy will be used to buy SAF to support the country’s 1% SAF mandate from next year.
The fund will also include the penalties and interest in addition to the SAF levies.
The bill was introduced the country’s Ministry of Transport in September earlier this year. The first reading of the bill was done on 22nd of September. The bill was in line with the Singapore Sustainable Air Hub Blueprint in February 2024 which laid out plans to mandate 1% SAF usage on flights departing from Singapore from 2026.
The Fund will be used to procure SAF and SAF EAs as well as to cover related administrative costs. It will not form part of CAAS’ revenue.
“To anchor supply resilience, Singapore has set a 1% SAF uplift target by 2026, with the goal to raise this to 3 to 5% by 2030, subject to global developments and the wider availability of SAF. We have consulted the industry and assessed that starting with a 1% target is manageable; it will not increase air ticket prices significantly,” said senior minister of state for transport and national development Sun Xueling.
“At the same time, cost certainty is critical. SAF is still a nascent product that is subject to high price volatility. Unlike fossil jet fuel, airlines cannot hedge the price of SAF. Simply mandating the use of SAF would impose unpredictable and unsustainable costs on airlines and passengers as SAF prices may vary significantly.”
Xueling said the Clause 9 of the Bill provides for the SAF levy to be payable in respect of passengers, cargoes and flights departing from airports in Singapore to land in a place outside Singapore.
The airports in Singapore that require the payment of SAF levy will be as specified in an order made by the Minister for Transport.
Earlier estimates showed the levy would lively be in the range of Singapore dollar $3-16 ($2.32 to $12.35 in USD) to support the mandate. The levy was to be measured based on the flight distance as well as the class of travel.
However, transit passengers were to be exempt from the levy.