Singapore has turn out to be the newest nation to announce its intention to purchase sustainable aviation fuels (SAFs), becoming a member of a small group of countries – and an much more unique Asian membership – within the rising however nascent market.
On Monday, the Civil Aviation Authority of Singapore (CAAS) stated the city-state would goal for all flights to depart Singapore with 1 per cent SAF of their tanks from 2026, growing to three to five per cent by 2030, topic to optimistic market growth. Passengers will likely be charged a levy, and should discover a journey to Bangkok costing S$3 (US$2.20) extra, and to London, S$16 (US$11.90) extra.
The levy is supposed to fund a centralised procurement technique aimed toward reducing prices in comparison with if particular person airways negotiated their very own offers. The strategy has received plaudits from airways and is anticipated to encourage larger SAF manufacturing within the comning years, however it has additionally raised issues on short-term provide challenges and the complexities of sourcing uncooked supplies within the biomass-rich Southeast Asian area.
SAF, which may be created from waste merchandise resembling used cooking oil or agricultural refuse and is seen as probably the most promising technique to inexperienced business flying at this time, is about 3 times dearer than standard kerosene, as a result of technical and logistical complexities, together with the gasoline’s excessive demand.
Janos Ambros Reyes, chairman of Philippines-based consultancy AeroStrategies, expects Singapore’s transfer to briefly add to the prevailing SAF provide crunch.
“Not everybody can be pleased with it, there might be a little bit of a market shock, however I feel the market would adapt and finally [Singapore’s SAF target] will likely be good for provide,” Reyes stated, including that main airways, even in nations with out SAF targets, are already learning procurement choices.
One beneficiary of Singapore’s scheme might be smaller airways, which with out bulk buy schemes may discover it troublesome to enter SAF markets on their very own, stated unbiased aviation analyst Brendan Sobie.
“It’s form of levelling the enjoying discipline, as a result of it opens up entry to each service, relatively than simply the massive ones,” Sobie stated.
Singapore’s aviation authority didn’t specify the amount of SAF it’s trying to procure in 2026 to make up the focused 1 per cent mix. However as an estimate, drawing from knowledge from personal sector local weather group First Movers Coalition, a hundredth of Singapore’s 2019 peak jet gasoline consumption of 5.3 million tonnes can be 53,000 tonnes.
Demand for business aviation had tanked after 2019 as a result of Covid-19 pandemic, full restoration is barely anticipated from this yr onwards.
SAF is anticipated to contribute to 0.5 per cent of world jet gasoline provide this yr, at 1.5 million tonnes, in keeping with the Worldwide Air Transport Affiliation (IATA). Analyst S&P World Commodity Insights estimates the amount may rise to three.5 million tonnes subsequent yr.
However a lot of the availability is anticipated for use inside the European Union, which has mandated the usage of SAF beginning at 2 per cent in 2025, rising to 70 per cent by 2050. Aviation executives at Singapore airshow this week questioned the supply of SAF for the area.
“I don’t know the place you’re going to useful resource 1 per cent SAF in Changi, from current feedstocks,” stated Riyadh Air operations chief Peter Bellew, including that within the longer run there might be extra provide from novel artificial propellant created from hydrogen fuels. Singapore authorities have stated the 1 per cent goal for 2026 is life like, although the ultimate quantity bought may change based mostly on market growth.
CAAS director common Han Kok Juan stated Singapore is working with neighbouring nations to unlock potential SAF provide. Singapore is dwelling to the world’s largest SAF manufacturing plant constructed by Finnish oil refiner Neste, which might make 1,000,000 tonnes of the gasoline a yr, however the city-state is trying to diversify its provides to make sure resilience, Han added.
Prof Shamsul Kamar Abu Samah, chief government of the Nationwide Aerospace Business Company Malaysia, stated Singapore’s SAF plans creates “lots of room” for mutual studying and help between the 2 nations.
“If we will discover a technique to collaborate on the know-how, analysis and enterprise facets, it’s going to be one thing good not just for our nation, but additionally for the area, Shamsul stated.
Malaysia presently homes three SAF ventures that would begin manufacturing by 2026, together with a refinery undertaking involving nationwide oil firm Petronas, with a 12,500 barrels (approx 1,750 tonnes) per day capability for SAF and different biofuels.
Malaysian authorities have indicated that the nation’s biofuels capability will first go in direction of assembly home demand. The nation can also be understood to be firming up nationwide SAF targets.
Palm oil within the highlight
Business gamers on the Singapore airshow additionally highlighted the excessive quantity of biomass current within the Southeast Asia area, which might be used to make jet gasoline however whose sustainability credentials have come below fireplace. Particularly, Malaysia and Indonesia are the world’s prime palm producers.
When requested about the usage of palm oil for SAF, CAAS’s Han reiterated Singapore’s stance that the nation will observe requirements set by the Worldwide Civil Aviation Group (ICAO) and its Corsia international carbon offsetting programme. Higher analysis and understanding will “open up the sources accessible to be used, which could be very important for the bodily provide of SAF, together with stabilising and bringing down the worth”, Han stated.
Corsia recognises palm oil and its manufacturing residue as SAF feedstocks. Nevertheless, the European Union bans palm oil-based SAF, citing deforestation danger the crop brings.
Reyes of AeroStrategies stated palm-based merchandise must be used as a stepping stone earlier than extra novel alternate options come into the market, including that it’s important for the trade to “get going” on constructing the SAF ecosystem.
Shamsul stated that palm residue must be prioritised. Using palm oil – the plant’s most important commodity – requires deeper research on whether or not higher demand from the aviation sector would trigger a worth spike, he stated.
“We use [palm oil] for our day-to-day life, so we don’t wish to merely improve its worth with out contemplating the necessities of our folks,” he stated.
Nonetheless, gasoline producers are being pressed to extend the availability of SAF, because the aviation sector faces higher scrutiny over its carbon emissions. Interim measures resembling extra environment friendly air visitors administration usually are not anticipated to considerably dent greenhouse gasoline output, whereas electrical and hydrogen-powered planes are too far off within the horizon. SAF may help reduce carbon emissions by 80 per cent.
Addressing a convention on the sidelines of the Singapore airshow, William Walsh, IATA director common, stated the aviation trade “won’t be allowed to develop” with out proving that it’s sustainable.
“Each little bit of [SAF] that will get produced can be used, as a result of that is an existential difficulty,” he stated.
