Mr. Speaker, the Civil Aviation Authority of Singapore (Amendment) Bill, while seemingly technical, is a critical piece of legislation that puts into policy and operationalises Singapore's commitment to tackling carbon emissions from the aviation sector through the increased adoption of Sustainable Aviation Fuel, or SAF.
The adoption of SAF is broadly recognised by the scientific community and the industry as a necessary step in our pathway towards achieving Net Zero emissions by 2050, and crucially, in striving to meet the Paris Agreement goal of limiting global warming to below 2∘C.
The production of SAF is still nascent, and breakthroughs may come in spurts, so Singapore must stay agile to capitalise on them. With our world-class logistics, trade links, and existing refinery presence, we are well placed to lead in the regional SAF industry. We can build flexibility into our SAF regime so that when new pathways mature, we can scale up quickly.
As a party that supports ambitious climate action in line with the scientific consensus, the Workers’ Party supports the intent and broad purpose of this Bill. We believe it is important to tackle carbon emissions from international aviation even if they are not covered under Singapore’s national carbon budget. This is because it is the right thing to do, it is an area where we have a measure of control, and it is a move that will benefit our economy and society in the long run by future-proofing our status as an international aviation hub.
Generally, the new provisions in the Bill allow for a more straightforward and policy-stable approach to SAF adoption. This is commendable.
Nevertheless, I have several clarifications to seek from the Minister regarding the mechanics and implications of this legislation. My queries fall broadly into the following categories:
1. The rationale and transparency of the proposed SAF Fund mechanism;
2. Issues of process regarding the implementation of the Fund;
3. The impact of the new levy on travellers and the broader strategy for fair decarbonisation of Singapore’s aviation sector; and,
4. Ensuring that we remain ready to scale and capture market share as the technology develops.
1. Why the Fund Mechanism?
Mr. Speaker, according to Clause 9 of the Bill, airlines are expected to potentially pass down the costs of SAF adoption to travellers. If the costs are ultimately borne by the consumer, may I ask why has the Government chosen the method of establishing a Fund for the collection of SAF levies to procure SAF over other methods? I note this is different from the funding mechanism in say the EU or the UK. Why not allow the costs to be passed through directly and transparently by the airlines? Is the Fund primarily intended as a risk-pooling mechanism, or does it serve another strategic purpose?
Secondly, on the issue of transparency, I would like to ask: will the collections, purchases, and timing of SAF procurement through the Fund be made public and transparent? It is stated that the Fund will not form part of the CAAS's revenue and will also be used for administrative costs. Given that the Fund appears designed to have some slack after SAF purchases—which is prudent—will the public have access to information on how much surplus or ‘slack’ there is in the Fund annually? Furthermore, does the Government have any projections yet on the annual total collections via the levy? This information is vital for public accountability and for assessing the efficiency and scale of this new policy tool.
2. Issues of process for the implementation of the SAF procurement mechanism
Next, I turn to issues of process regarding the implementation of the SAF procurement mechanism.
It is not entirely clear from the Bill who or what will be the Procuring Entity mentioned in Clause 5, which outlines the Purposes of the SAF Fund.
Currently, there is only one major SAF operator in Singapore[1]. Given that we have ambitions to scale up the sector, how can new players be assured that the procurement process is fair and open to all?
I would also like to ask the Minister what is the timeline for the formal establishment and operationalisation of this Procuring Entity.
In the interim, before the entity is formally set up, is the Civil Aviation Authority of Singapore the designated Procuring Entity?
How is the Procuring Entity going to be appointed and governed? Will its structure be similar to existing models, such as the Singapore GasCo Pte Ltd under the Energy Market Authority?
Will private sector firms be involved in this Procuring Entity?
Regardless of whether it is a wholly public or a mixed entity, will the Procuring Entity be subject to standard public agency procurement rules to ensure fair and competitive purchasing of SAF?
Mr Speaker, as a small nation, Singapore does not produce enough convertible feedstock to be self-sufficient in SAFs, especially given our status as a regional air hub. However, our neighbours in Malaysia, Indonesia, and Australia produce or are capable of producing, large volumes of feedstock. We have healthy trade relationships with many economies in the region, and we should consider establishing a cooperative framework that can ensure a steady supply of feedstock into our facilities. Having a clear and fair framework for regional cooperation will also strengthen Singapore’s status as a leader in decarbonisation efforts in the region.
Furthermore, not all feedstock are made equal—some have significantly higher GHG emissions due to inefficient conversion, higher carbon cost at production, or polluting by-products. We must ensure that we do not inadvertently become a tool for greenwashing in our quest to be a leader in the nascent SAF industry.[2] We can perhaps strengthen safeguards by defining the categories of feedstock acceptable under this Bill.
3A. The Impact on Travellers and Fair Decarbonisation
Mr. Speaker, I am conscious of the potential financial impact this levy will have on travellers, especially those who rely on air travel to visit family or pursue work opportunities. This is set against the context that Singapore already charges fairly high airport fees, e.g. due to the Terminal 5 deveIopment levy otherwise known as airport development levy.
Mr Speaker, on the issue of the financial impact of travellers, I have the following questions:
First, on the expected cost: Based on current market rates for SAF and the projected adoption mandate, can the Government provide any illustration on the additional expected cost for a typical passenger flying out of Changi Airport? A clear illustration is needed to manage public expectations.
Second, I note that the Bill allows for the possibility of prescribing different rates of SAF levy for different classes of passengers or cargoes, airports or aircraft, places of landing or any other differential basis. This seems rather broad.
So, I would like to ask, as a matter of equity and fairness, will the SAF levy be stratified or differentiated to charge those who pollute more, such as private jets, special chartered flights, or passengers on different classes of travel on commercial airlines, and if so, how it will be done.
Is the Bill designed to simply allow airlines the discretion to decide how these new costs are passed down to different classes of passengers? At least in terms of costs, a flat-rate imposition could disproportionately affect those travelling in economy class.
Can the minister also provide some information on the way the SAF levy charges will apply for outbound air cargo?
3B. Fair Decarbonisation and Supply Side
Finally, Sir, this Bill represents the Government’s first ever airport levy specifically intended for decarbonisation purposes, which is a noteworthy step.
I would like the Minister to elaborate on the expected impact of this levy and fund on the development of Singapore’s domestic SAF industry and its overall supply.
I would also like to ask whether the industry is currently constrained primarily by a lack of guaranteed demand from airlines? Or is this levy needed more because it will provide the financial support necessary for the industry to overcome the technological and cost challenges of producing SAF[3]?
I note that the International Air Transport Association (IATA) recently released a study suggesting the main bottleneck is more with technology rather than the availability of feedstocks, with used cooking oil being the main commercially available process[4]. In the Government’s view, how far is the industry from commercially scaling up other crucial processes, such as power-to-liquid SAF?
I ask this because if our ability to make aviation fuel more sustainable is still constrained by technological or supply-side limitations, we must also think more broadly about reducing emissions through other viable means. This includes reducing per-passenger emissions by encouraging airlines to adopt higher passenger density on their aircraft, albeit carefully drawing appropriate balance between basic acceptable comfort and numbers, especially for the economy class.
Expert groups such as the Global Solidarity Levies Task Force have suggested that this could be achieved by raising fees on classes with lower passenger density, such as Business and First Class, as well as on private jet passengers[5]. Such a policy structure would align the cost of travel more closely with the environmental impact and promote a fairer distribution of the decarbonisation burden.
Finally, Mr Speaker, an SAF levy is intended to fund the use of more expensive Sustainable Aviation Fuel, but this increases operating costs for airlines, which are then typically passed on to passengers as higher ticket prices. This situation creates a risk of ‘carbon leakage’, which is commonly understood as the increase in emissions outside a region imposing a climate policy due to businesses or consumers shifting their activities to areas with less stringent regulations.
In aviation, this ‘leakage’ may happen when airlines or passengers avoid the levy by ‘hub switching’, i.e. they opt for connecting flights through international airports that do not impose the SAF charge, thereby displacing the carbon-intensive activity rather than truly reducing global emissions and putting the regulated hub at a competitive disadvantage. Given the goal of a net-zero future, how does the government intend to prevent or significantly reduce such ‘carbon leakage’ after the introduction of our SAF levy?
4. Scalability and Market Capture
Singapore is spearheading the development of Sustainable Aviation Fuels (SAFs) in the region, with Neste’s Tuas facility - the first of its kind globally - marking a significant step forward. The Government has made clear its intent to continue advancing SAF as a key pillar of Singapore’s sustainable aviation strategy.
However, in a nascent and rapidly evolving industry, technological breakthroughs are unpredictable and can often occur in bursts rather than along a steady trajectory. The CAAS (Amendment) Bill 2025 does not prescribe a fixed schedule for increasing the SAF levy or blending ratio; instead, it empowers CAAS to review these “from time to time.”[6]
This raises an important policy question: what should trigger future changes to the levy or SAF target?
Should adjustments depend on global supply milestones, declining price differentials, or broader regional capacity developments?
To ensure flexibility and market alignment, Singapore could adopt a trigger-based framework, where each revision is activated only when specific, verifiable conditions are met. For example, a new blending target could be triggered when global certified SAF supply reaches a certain threshold, or, once SAF price premiums fall below a defined multiple of Jet-A1 fuel.
Alternatively, escalation could be tied to regional production capacity or carbon intensity benchmarks verified under ICAO’s CORSIA framework[7].
Such an approach ensures that taxpayers and airlines can be confident that adjustments are implemented only when the market is ready, keeping Singapore nimble and responsive to dynamic global conditions rather than bound to an arbitrary timeline.
Conclusion
Mr. Speaker, in closing, I would reiterate that the market-based solution of an SAF levy, as legislated by this Bill, is a good step forward. I am heartened that Singapore is taking tangible first steps in line with the global aviation industry’s goals.
Of course, this must only be the beginning, and we should and must explore further avenues for fair and effective decarbonisation after this. I look forward to the Minister’s clarifications on the questions I have raised. Mr Speaker, notwithstanding the questions and concerns I have raised, I support this Amendment Bill.
[1] https://www.arup.com/insights/singapores-sustainable-aviation-fuel-opportunity/
[2] https://www.sciencedirect.com/science/article/pii/S2452223624000804
[3] https://www.reuters.com/sustainability/singapores-green-jet-fuel-mandate-faces-cost-supply-headwinds-2024-02-21/
[4] Global Feedstock Assessment for SAF Production published by the International Air Transport Association (IATA) in partnership with Worley Consulting (or often referenced as IATA Study Confirms that SAF Technology Rollout is Main Bottleneck to Net Zero, not Feedstock Availability), date of release September 2025. The study's core finding is that while there is sufficient sustainable feedstock available to achieve the aviation industry's net-zero goal by 2050, the slow pace of technology rollout (beyond the current Hydroprocessed Esters and Fatty Acids, or HEFA, process which uses fats like used cooking oil) is the main constraint in scaling up production to the required 500 million tonnes per year. This highlights the need to accelerate technologies like Power-to-Liquid (PtL).
[5] CE Delft. (June 2025). A fair share from aviation – Solidarity levies in aviation: Options for a coalition of the willing. Commissioned by the Global Solidarity Levies Task Force.
[6] https://www.caas.gov.sg/who-we-are/newsroom/Detail/caas-amendment-bill-introduced-in-parliament-to-implement-SAF/
[7] https://www.icao.int/CORSIA
