Singapore tables Bill for sustainable aviation fuel levy, fund and central procurement
This facilitates the implementation of previously announced sustainable aviation fuel policies
[SINGAPORE] Laws will be amended to implement previously announced policies on sustainable aviation fuel from 2026, including a levy, fund and central procurement, under a Bill tabled on Monday (Sep 22).
The Civil Aviation Authority of Singapore (CAAS) (Amendment) Bill provides for CAAS to collect a sustainable aviation fuel levy. The quantum will be announced in subsidiary legislation after the Bill is passed, said the Ministry of Transport (MOT).
Sustainable aviation fuel is created from renewable sources such as used cooking oil, fat waste and non-food crops, unlike conventional aviation fuel which is made from fossil fuels.
Policies on its use were announced in February 2024 as part of the Singapore Sustainable Air Hub Blueprint, which details the nation’s strategy to achieve net-zero aviation emissions by 2050.
The blueprint sets an interim target of reducing emissions to 80 per cent of pre-pandemic 2019 levels, or 323 kilotonnes of carbon dioxide, by 2030.
In a release on Monday, MOT said sustainable aviation fuel is a “critical pathway” for the decarbonisation of aviation and expected to account for 65 per cent of the carbon reduction required for the 2050 goal.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Levy, fund and procurement
The sustainable aviation fuel levy, which is a tax, must be paid to CAAS for outbound passenger and cargo flights.
As stated in the Bill, the person or entity responsible for paying the levy will be specified in a ministerial order.
Under this order, if the levy is to be passed on to purchasers of an air ticket or those procuring cargo transport services, the amount must be stated in the relevant document such as an air ticket or contract.
SEE ALSO
The order may also specify penalties or interest on the late payment of the levy.
The levy will be set at a fixed quantum based on the volume of sustainable aviation fuel needed to achieve the target and a projected sustainable aviation fuel premium over conventional aviation fuel.
MOT said that the levy quantum will be reviewed “from time to time as necessary”.
The previously announced target is for sustainable aviation fuel to comprise 1 per cent of all the fuel used at Changi and Seletar airports in 2026, for a start. By 2030, this will rise to between 3 and 5 per cent.
In 2024, CAAS said that levies for a direct economy-class flight from Singapore would be S$3 to Bangkok, S$6 to Tokyo and S$16 to London.
All levies collected will go into a sustainable aviation fuel fund that will be used to procure sustainable aviation fuel or credits for it, and to cover administrative costs. This will not form part of CAAS’ revenue.
The Bill also provides for the government procurement of sustainable aviation fuel, either by CAAS itself or an entity established by the regulator to procure, manage and allocate sustainable aviation fuel and credits for it.
“This will enable CAAS to aggregate demand for sustainable aviation fuel, achieve economies of scale and provide a cost-effective mechanism for sustainable aviation fuel purchases,” said MOT.
Details on the implementation of procurement will be announced after the Bill is passed, it added.
Copyright SPH Media. All rights reserved.
