THE Civil Aviation Authority of Singapore (CAAS) launched a tender on Friday (Jan 20) to engage consultancy services to study and develop a structural offtake mechanism for sustainable aviation fuels (SAF) in Singapore. This is to support the adoption of SAF at Changi Airport and bolster the city-state’s competitiveness as a sustainable air hub.

The study, which will commence in the first quarter of the year, aims to assess the various models for driving structural offtakes and shortlist the preferred options for Singapore. CAAS expects it will take four months to complete the study, which includes performing horizon scanning of the various models for structural offtakes, considering sustainability goals, air hub competitiveness, and level-playing field.

It also seeks to assess the impact on traffic growth, traffic mix and financial impact, such as to the air hub, airlines and passengers, based on varying targets and pace of implementation.  

The development of the SAF offtake mechanism is one of the 15 recommendations submitted by the International Advisory Panel (IAP) on Sustainable Air Hub last September.

One of the key features of the study is to determine whether participation for the offtake mechanism should be voluntary or mandatory, since it is likely that all stakeholders would have to co-share the cost of adopting SAF, given the substantive price difference between SAF and fossil jet fuel, said the report.

The offtake mechanism’s source of funding also needs to be determined, considering the high cost of SAF now. Passengers, airlines and the government can all contribute through higher ticket prices or SAF offsets, higher operating costs and possible incentives, respectively. 

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The CAAS is also looking to differentiate between passenger groups, as well as align on the metrics used to determine the offtake mechanism. The IAP recommended a volume-based mechanism as it is measurable and easily understood by the public and stakeholders, though this is still under discussion. Demand for aviation carbon offsets within the aviation industry is projected to increase over the coming years, fuelled by the Carbon Offsetting and Reduction Scheme for International Aviation and other regulatory requirements.

Han Kok Juan, director-general of CAAS, said the setting up of an SAF offtake mechanism will encourage greater adoption at Changi Airport and help create long-term, predictable demand to incentivise capital-intensive investments in SAF production and help drive down price over time.

CAAS partnered Singapore Airlines, Temasek, ExxonMobil, and Neste last February in a SAF pilot, with the first batch of blended SAF being delivered to Changi Airport last July. The sale of SAF credits launched in June 2022, and Singapore signed an agreement with the International Civil Aviation Organisation (ICAO) months later in October to offer and receive assistance, capacity-building and training on SAF under the ICAO ACT-SAF programme.