Singapore’s plan for flight levy linked to green fuel adoption unlikely to dent air travel demand

The levy will be set based on the volume of SAF needed to achieve the targets and projected prices of the fuel. Singapore plans to impose the levy from 2026, according to The Straits Times.

For economy class flights from Singapore, the levy is projected to cost around S$3 (US$2.23) for a short-haul destination such as Bangkok, S$6 for a medium-haul destination such as Tokyo and S$16 for a long-haul destination such as London, Patel said.

“These charges are for a sustainable future and [cost] less than a cup of coffee or meal at the airport,” he added.

SAF is made from various feedstocks such as recycled cooking oil and municipal wastes. The Civil Aviation Authority of Singapore (CAAS) says fuels such as SAF are critical towards achieving decarbonisation.

Air travel currently produces about 2 per cent of the world’s emissions but is considered one of the hardest sectors to decarbonise.

European regulators have to date been the most active in trying to boost the use of SAF, introducing rules that force airlines to meet minimum requirements for its use. France has mandated the level of SAF use at 2 per cent by 2025 and 5 per cent by 2030.

Under the European model, the carrier pays for the SAF and decides whether to pass the cost onto air ticket prices.

“It’s not only about the cost. Sooner or later, every airline in every country will have to start taking steps towards achieving net zero by 2050,” said Shantanu Gangakhedkar, senior consultant for aerospace and defence at Frost & Sullivan.

Most of Asia’s air travel demand has already recovered up to 90 per cent since the pandemic, Shantanu said. “If there is to be a slight increase in ticket prices, I don’t see it having a major impact on travel demand given that the average load