Singapore sets up world’s first non-profit to centralise purchase of sustainable aviation fuel
SAFCo will procure, manage and allocate the fuel at Changi Airport and Seletar Airport
[SINGAPORE] The Civil Aviation Authority of Singapore (CAAS) has set up the Sustainable Aviation Fuel Company (SAFCo) to centralise the purchase of such fuel.
The non-profit company will be wholly owned by CAAS, with Tan Seow Hui – who previously worked on low-carbon solutions at Shell – as chief executive. CAAS director-general Han Kok Juan will be on its board.
The central procurement of sustainable aviation fuel (SAF) by SAFCo will give airlines operating to and from Singapore the ability to negotiate as an aggregate, instead of as individual companies, said CAAS.
This will help the company secure a more stable quantity and price amid “relatively volatile” prices.
SAFCo will supply the fuel to Changi and Seletar airports and will “support the implementation of Singapore’s national SAF policy”, CAAS said on Thursday (Oct 30).
Such central procurement is novel in aviation, and CAAS said it has shared the concept with the International Civil Aviation Organization.
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SAFCo’s initial costs will be fully funded by CAAS and its office premises are currently being identified.
CAAS pointed out that its “fixed cost envelope” approach means that only funds collected by the mandatory levy on sustainable aviation fuel will be used to procure the fuel. Therefore, the quantity of fuel purchased can vary depending on the price at the time of purchase.
The sustainable aviation fuel levy must be paid to CAAS for all outbound passenger and cargo flights per passenger based on distance. In 2024, CAAS gave some examples: A direct economy-class flight from Singapore would be S$3 to Bangkok, S$6 to Tokyo and S$16 to London. The fees will be higher for more premium seat classes.
CAAS will collect the levy from air transport users, including airlines, business and general aviation users, before disbursing the monies to SAFCo.
The company will then aggregate the mandatory and voluntary demand, based on a sustainable aviation fuel registry, through a “transparent” and “competitive” tender process involving both local and foreign suppliers. The fuel will then be delivered to customers at Changi and Seletar airports.
“With predictable cash flows from the SAF levy, SAFCo can sign longer and larger contracts with SAF suppliers, providing demand certainty in a still-nascent SAF market,” said CAAS.
With the aim to build an integrated demand market for such fuel, CAAS said SAFCo will be reaching out to airlines and businesses to encourage partnerships with the company. More details are expected at the Singapore Airshow in February 2026.
Han said: “Through SAFCo, we want to get the best value for the SAF levy collected and activate a SAF ecosystem which will help advance sustainable aviation and create new economic opportunities for Singapore and beyond.”
He said there was “very, very strong interest” from airlines and businesses around voluntary sustainable aviation fuel purchases, but declined to comment on individual names.
Singapore aims to have sustainable fuel comprise 1 per cent of all the fuel used at Changi and Seletar airports in 2026. The target will rise to 3 to 5 per cent by 2030.
Sustainable aviation fuel is created from renewable sources such as used cooking oil, fat waste and non-food crops. This is unlike conventional aviation fuel, which is made from fossil fuels.
CAAS said SAFCo’s immediate focus will be on establishing robust governance and procurement frameworks, as well as setting up levy collection systems and process to build manpower and procurement capability.
Tan, who previously led commercial strategy, market development and marketing in fields such as sustainable aviation fuel and carbon credits at Shell, added that SAFCo is expected to have about 10 staff for the first year.
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