What's Happening?
Singapore has initiated its first government-led, national-level sustainable aviation fuel (SAF) procurement pilot. This initiative involves nine companies, including Boston Consulting Group, Changi Airport Group, DBS Bank, GenZero, Google, OCBC Bank, Temasek,
Singapore Airlines, and Scoot, in collaboration with the Civil Aviation Authority of Singapore (CAAS) and its Sustainable Aviation Fuel Company (SAFCo). The memorandum of understanding (MOU) was signed at the Changi Aviation Summit, preceding the Singapore Airshow. This pilot aims to test the operational, commercial, and accounting processes necessary for a national SAF procurement and environmental attribute allocation system. The initiative is part of Singapore's broader strategy to implement a SAF levy starting October 1, 2026, and to achieve a 1% SAF uplift by 2026, with a target of 3% to 5% by 2030.
Why It's Important?
The launch of this SAF procurement pilot is significant as it represents a major step towards reducing carbon emissions in the aviation sector, a critical component of global efforts to combat climate change. By centralizing SAF procurement, Singapore aims to create a more resilient and affordable fuel supply, which could serve as a model for other countries. The involvement of major companies indicates strong commercial interest and the potential for widespread adoption of sustainable practices. This initiative not only supports environmental goals but also enhances Singapore's position as a leader in sustainable aviation, potentially influencing international aviation policies and practices.
What's Next?
Following the MOU signing, SAFCo will issue a tender for the acquisition of CORSIA-eligible SAF, with pricing determined by supplier responses. The pilot will provide participating companies with practical experience in centralized procurement and emissions reduction, potentially leading to broader industry participation. As the SAF levy is implemented, the volume of SAF procured will be tied to funds collected, encouraging further investment in sustainable aviation. The success of this pilot could lead to increased regulatory and voluntary demand for SAF, fostering a robust ecosystem that supports long-term sustainability in aviation.
