Singapore to impose green aviation fuel levy

had suggested that economy-class passengers may incur an additional $3 levy for short-haul flights, $6 for medium-haul flights and $16 for long-haul flights, such as those to Bangkok, Tokyo and London, respectively.

MPs such as Ms Poh Li San (Sembawang West) and Mr Sharael Taha (Pasir Ris-Changi GRC) asked about the impact of the levy, and reasons for passing the costs on to passengers through higher air ticket prices.

More specifically, Ms Poh asked why the cost burden is to be borne solely by consumers, instead of airlines.

Responding, Ms Sun said the sustainable aviation fuel levy will be paid by different parties, including aircraft operators. It is calculated based on the ultimate user of the air transport service, she added, so aircraft operators will be allowed to pass the levy on to end users such as passengers or shippers.

The amount of the green jet fuel levy that each end user has to pay will be displayed transparently, she said.

Certain flights will be exempted from the levy, such as those used for flight training and for charitable or humanitarian purposes, she added.

Addressing a question by Mr Yip Hon Weng (Yio Chu Kang), Ms Sun said passengers transiting or transferring through Singapore will not need to pay the sustainable aviation fuel levy.

She acknowledged that transit and transfer passengers are a critical part of air traffic through Changi Airport.

Although they do not start or end their journeys in Singapore, they enhance the nation’s connectivity by supporting a broader network of destinations and higher flight frequencies, she said.

Ms Sun added that the Government plans to ensure that Changi Airport remains competitive enough for these passengers to continue choosing to transit or transfer through Singapore, and hence will not impose the levy on them.

Several MPs, including Ms Gho Sze Kee (Mountbatten) and Mr Yip, asked about how the levy could potentially affect Changi Airport’s competitiveness as a global air hub.

Responding, Ms Sun said airlines and passengers fly through Changi Airport for various reasons, including safety, network and connectivity.

The Government will keep a close watch on Changi Airport’s charges and costs, she said, adding that it has calibrated its approach to adopting green jet fuel with “safeguards” to maintain the air hub’s competitiveness.

Ms Sun said the Government has consulted the industry and assessed that starting with a 1 per cent green jet fuel adoption target is “manageable”, and will not increase air ticket prices significantly.

Under this model, the total amount spent on sustainable aviation fuel each year will be pre-determined based on the usage target set and the projected cost of the fuel, she noted.

“We can decide how much cost we want to bear, and provide cost certainty for airlines and passengers,” said Ms Sun, who assured the MPs that Changi’s competitiveness would not be adversely impacted.

Conversely, simply mandating the use of sustainable aviation fuel across the board would impose unpredictable and unsustainable costs on airlines and passengers, she added.

Responding to Mr Dennis Tan (Hougang) on possible greenwashing due to the use of certain feedstock in sustainable aviation fuel that may create external pollutants, Ms Sun said the green jet fuel procured will comply with the requirements set out by the International Civil Aviation Organisation.

She added that the Economic Development Board has been in discussions with existing energy firms on retrofitting current refinery units, while research institutes are investing in technology that can advance biofuel production.