Singapore’s Parliament has passed legislation that introduces a novel green fuel levy on flights departing from the city-state, as part of a broader strategy to reduce aviation sector emissions and promote sustainable aviation fuel (SAF). The levy will be collected by the Civil Aviation Authority of Singapore, which will centrally procure and manage SAF supplies for airlines.
Under the new measure, all users of air transport will share responsibility for the cost. During parliamentary debate, Senior Minister of State for Transport Sun Xueling explained that earlier projections suggest the levy could range from S$3 to S$16 for economy-class passengers, depending on flight distance. The government maintains that the fee is unlikely to cause a “significant” rise in airfares.
Singapore has set ambitious targets for the uptake of SAF, aiming for more than 1 percent use by 2026, and further expansion to 3–5 percent by 2030. The strategy involves aggregating demand from airlines and purchasing fuel centrally, thereby securing more favorable terms from suppliers.
Proponents of the policy emphasize the pivotal role of SAF in mitigating aviation’s carbon footprint. The International Air Transport Association (IATA) estimates that SAF could account for roughly 65 percent of the emissions reductions needed for the industry to hit net-zero by 2050. Yet, global adoption remains minuscule: this year, SAF is projected to make up only about 0.7 percent of total aviation fuel consumption, even as air travel demand is expected to rise by about 6 percent.
Some industry stakeholders and observers have raised questions about whether the additional cost burden might trickle down to consumers via higher ticket prices. While the government insists that the impact will be modest, there remains uncertainty about how airlines will absorb or pass on the cost, especially for long-haul routes where the levy may hit closer to the upper estimate.
By channeling the levy into centralized SAF procurement, Singapore aims to create economies of scale that might reduce financial pressure on individual airlines and dampen potential fare increases. The approach also seeks to provide more predictable demand signals to fuel suppliers, helping stimulate supply growth.
In introducing the levy, Singapore becomes one of the first countries to directly levy departing flights in this manner, reflecting mounting global pressure for aviation to contribute its share to climate goals. As the sector grapples with its environmental impact, Singapore’s model may become a reference point for other nations seeking to balance ecological responsibility with the economic realities of international air travel.
