Singapore’s Pulau Bukom to house new sustainable aviation fuel plant by Aster, Aether Fuels

[SINGAPORE] Refining and chemicals player Aster and startup Aether Fuels will develop a plant to produce sustainable aviation fuel on Pulau Bukom – the first such facility in South-east Asia to convert waste industrial gases into green fuel for airplanes.

Construction of the plant, dubbed “Project Beacon”, will commence in 2026. It will begin commercial operations in 2028. The plant will be located at Aster’s refining hub on Pulau Bukom, which it took over from Shell in April.

The move comes amid a deal spree by Aster – a joint venture between Indonesia’s Chandra Asri and commodities trader Glencore. The company has set aside US$2 billion for investments in Singapore.

Besides the Bukom refinery, Aster has purchased the Jurong Island assets of Shell and Chevron Phillips Singapore Chemicals. Last month, Chandra Asri inked a deal to buy ExxonMobil’s Esso-branded petrol kiosks in Singapore, reportedly for US$1 billion.

Aster’s group chief financial officer Andre Khor said that the sustainable aviation fuel plant is aligned with the deep-tech focus of its unit, Aster Ventures.

“The thesis driving up the investment is that… we are looking at deep tech to help address core industrial (needs), as well as next-generation energy solutions that are adjacent and synergistic with our energy, chemicals and infrastructure assets on the ground,” he said.

Khor was speaking to reporters on the sidelines of the deal signing, held at Temasek Shophouse on Tuesday (Nov 11).

Project Beacon will use Aether’s proprietary technology to convert industrial waste gas, as well as biomethane, into sustainable aviation fuel.

This is a first for the region. Incumbent producers of this fuel, such as Neste, typically rely on used cooking oil to produce it.

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Aster will provide Aether with the waste carbon feedstock for fuel production, as well as renewable power, utilities and site support.

The output will be certified by the Carbon Offsetting and Reduction Scheme for International Aviation, a global initiative to decarbonise the aviation sector.

“Tonnes of interest”

Project Beacon will produce up to 50 barrels of fuel a day, or 2,000 tonnes a year. This comprises 1,600 tonnes of sustainable aviation fuel and 400 tonnes of sustainable naphtha.

There will also be 24 full-time jobs created for the operation of the plant, said Aether’s founder and chief executive Conor Madigan. The startup separately plans to grow its Singapore headcount to 30, from two at present.

Based in Singapore and Chicago, Aether was incubated and funded in 2022 by Xora, a deep-tech venture firm backed by Temasek.

Speaking to The Business Times at Tuesday’s event, Madigan noted that there is a shortage of used cooking oil to produce sustainable aviation fuel.

Aether aims to overcome this problem through its technology, which allows the fuel to be made from waste gases and other forms of waste carbon. With Project Beacon, the input will be gases from Aster’s refining processes.

“(That) allows us to get the feedstock we need in a super-steady stream and consistent flow… And so it really makes this project super simple. We have a rock solid feedstock supply, and it allows us to demonstrate a route to making fuels that we think is quite scalable,” he said.

In February, Singapore Airlines signed an agreement with Aether to potentially source sustainable aviation fuel from the startup.

Asked if the carrier will purchase the fuel from Project Beacon, Madigan would only say: “It is our intention that the offtake for this plant will be to a major airline. We hope to provide updates on that down the line.”

He also noted that there is “tonnes of interest throughout Asia” for offtake, especially as more governments mandate the use of the fuel.

Singapore, for instance, aims for sustainable aviation fuel to account for 1 per cent of all jet fuel used at Changi and Seletar airports in 2026, rising to 3 to 5 per cent by 2030.

The Republic has set up a central buyer for sustainable aviation fuel, while also introducing a levy for the fuel ranging from S$1 to S$41.60 per airline ticket.

Aether was “really impressed here in Singapore by the policy support for sustainability and the sort of steadiness of the government’s approach, which is a contrast right now (to the) world in general”, said Madigan.

The startup plans to eventually build a larger commercial plant in 2030 for sustainable aviation fuel, with an output of about 1,000 barrels per day. The location of this plant has not been announced.

Madigan expects that by the time Aether develops its 2030 plant, the price of its sustainable aviation fuel will be competitive with those produced with used cooking oil.

Singapore’s vision

The partnership between Aster and Aether Fuels aligns closely with Singapore’s vision to transform the energy and chemicals sector, said Png Cheong Boon, chairman of the Singapore Economic Development Board.

He noted that the industry, largely based in Jurong Island, accounts for about a quarter of Singapore’s manufacturing output and 3 per cent of gross domestic product.

“As the global energy and chemicals industry shifts towards a greener future, we too want the industry here to do the same,” Png said in a speech at Tuesday’s event.

Also speaking at the event, Temasek chief executive Dilhan Pillay noted that portfolio decarbonisation is “not very easy, given that we own an airline”, referencing Singapore Airlines.

“We recognise that the major consideration in our ability to achieve net-zero emissions is aviation decarbonisation – because of Singapore Airlines and our other interests in the aviation sector in Singapore and beyond,” he said.

Sustainable aviation fuel remains the most scalable solution available for the industry to decarbonise, he added.

Aster will “continue to find and nurture transformative technologies that support a resilient and sustainable energy ecosystem in South-east Asia”, said its chief executive Erwin Ciputra at Tuesday’s event.