New levy to be introduced in Singapore from 2026 to fund sustainable aviation fuel adoption
From 2026, travellers departing from Singapore will pay higher flight ticket prices due to a new levy aimed at supporting the country’s sustainable aviation fuel (SAF) initiative. This levy will be based on factors such as flight distance and class, with an estimated additional cost of S$3 for short-haul flights and up to S$16 for long-haul flights to destinations like London. This move is part of Singapore’s plan to have sustainable aviation fuel account for 1% of all jet fuel used at Changi and Seletar airports by 2026, and 3-5% by 2030.
Sustainable aviation fuel, produced from sustainable feedstocks such as cooking oils, waste materials, and forestry residues, offers up to an 80% reduction in carbon emissions compared to traditional jet fuel. However, due to limited supply and high production costs, SAF is currently 3 to 5 times more expensive than conventional jet fuel.
To help meet this demand, Singapore hosts the world’s largest SAF production facility, operated by Finnish refiner Neste. The levy revenue will help fund bulk purchases of SAF, aiming to gradually increase its share of fuel usage.
Other countries have implemented similar mandates, but Singapore is the first to introduce a consumer levy. This change may increase ticket prices globally, as airlines adjust to higher fuel costs, similar to surcharges already being applied by carriers like KLM. Despite the increased costs, experts believe Singapore’s role as an aviation hub will remain intact.
