Singapore sets 1% sustainable aviation fuel target under new levy framework

Levy-backed fund to finance greener jet fuel while keeping airfares stable

Singapore will introduce a levy and fund for sustainable aviation fuel (SAF) to support aviation decarbonisation while keeping costs stable for airlines and passengers, following the second reading of the Civil Aviation Authority of Singapore (Amendment) Bill.

The Bill formalises the Sustainable Air Hub Blueprint by empowering the Civil Aviation Authority of Singapore (CAAS) to regulate and procure SAF, Senior Minister of State for Transport and National Development Sun Xueling said. The government has set a 1% SAF target by 2026, with plans to raise this to 3–5% by 2030, depending on global supply conditions.

Airlines departing from Singapore will pay a SAF levy from 2026, with proceeds channelled into a fund managed by CAAS, Sun said. The fund will finance the procurement and management of SAF and its environmental attributes, ensuring “clear cost allocation and accountability,” she added.

In a separate statement, the Ministry of Transport (MOT) said the framework balances environmental goals with cost management. The levy model sets fixed fuel cost parameters and aggregates demand under a centralised fund, making Singapore among the first Asian aviation hubs to legislate a structured SAF financing system.

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