Singapore to Implement SAF Levy on Departing Flights from October 2026

The Civil Aviation Authority of Singapore (CAAS) has announced it will implement a levy on Sustainable Aviation Fuel (SAF) for all flights departing from Changi Airport. The policy, a key component of the Singapore Sustainable Air Hub Blueprint, aims to accelerate the adoption of cleaner fuels within the nation's critical aviation sector. According to the CAAS, the levy will apply to tickets sold from April 1, 2026, for flights departing on or after October 1, 2026.

This move positions Singapore as the first country to introduce a mandatory SAF levy, directly linking passenger travel to national decarbonization goals. The collected funds will be used for the central procurement of SAF, a strategy designed to aggregate demand and provide price stability for airlines. The levy amount will be variable, determined by the distance of the flight and the class of travel, ensuring a tiered contribution from passengers.

Levy Structure and Financial Impact

The CAAS has outlined a detailed structure for the levy. For passengers in economy class, the fee will range from S$1 (approximately USD $0.74) for short-haul flights, such as to Bangkok, up to S$10.40 (USD $7.70) for the longest-haul destinations like London. Passengers flying in premium cabins, including business and first class, will face a higher charge, set at four times the economy rate for the same geographical distance. This results in a levy ranging from S$4 to S$41.60 for premium travelers. The levy will not apply to passengers who are transiting through Singapore.

Air cargo will also be subject to the levy, with charges ranging from S$0.01 to S$0.15 per kilogram, dependent on the destination. The framework is designed to generate sufficient revenue to meet Singapore's initial SAF usage target of 1% in 2026, with ambitions to increase this to 3-5% by 2030.

To manage the procurement process, the CAAS will establish a non-profit entity, the Singapore Sustainable Aviation Fuel Company (SAFCo). This wholly-owned subsidiary will be responsible for purchasing SAF on behalf of airlines operating at Changi Airport, leveraging bulk purchasing to secure more favorable terms. According to the International Air Transport Association (IATA), SAF can cost two to five times more than conventional jet fuel, making such centralized efforts critical to managing costs.

Regulatory Framework and Global Context

The legal foundation for this initiative was established with the passage of the Civil Aviation Authority of Singapore (Amendment) Bill on October 14, 2025. This legislation provides CAAS the authority to impose and collect the necessary funds as part of the broader Singapore Sustainable Air Hub Blueprint. The blueprint outlines a comprehensive strategy for decarbonizing the country's aviation sector.

Singapore's approach contrasts with policies in other regions. The European Union, for example, has set a blending mandate requiring fuel suppliers to ensure SAF constitutes 2% of jet fuel from 2025, rising to 70% by 2050. The United Kingdom has a similar mandate starting at 2% in 2025 and increasing to 10% by 2030. Singapore's levy-based system focuses on funding centralized procurement rather than placing the onus directly on individual fuel suppliers or airlines to meet a blend percentage.

Industry leaders have responded with cautious optimism. Han Kok Juan, Director-General of CAAS, stated, “The introduction of the SAF Levy marks a major step forward in Singapore's effort to build a more sustainable and competitive air hub. It provides a mechanism for all aviation users to do their part to contribute to sustainability at a cost which is manageable for the air hub.”

Representing global airlines, Willie Walsh, Director General of IATA, commented, “I think we're all looking to see what happens in Singapore because it would be great if it proved to be an effective model for stimulating the growth of production. So I remain optimistic that we will see a positive outcome from the levy.”

What Comes Next

Airlines will begin incorporating the levy into ticket prices from April 1, 2026, for all flights scheduled to depart Singapore on or after October 1, 2026. The initial 1% SAF target for 2026 will serve as a pilot phase, with the results informing adjustments to the levy and procurement strategy for achieving the 3-5% target by 2030. The performance of the SAFCo procurement entity will be closely watched by the industry as a potential model for other hubs. The full details of the policy were outlined in a CAAS press release detailing the new measures.

Why This Matters

This development establishes a new model for funding aviation's green transition, shifting from supply-side mandates to a demand-side, centrally-funded system. For airlines, it provides a predictable pathway for SAF adoption at a major global hub, while for passengers, it makes the cost of decarbonization a transparent part of the ticket price. The success or failure of Singapore's levy system could significantly influence how other governments and aviation authorities approach the high cost of sustainable fuels.

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