Singapore forms company to secure affordable, stable supply of sustainable aviation fuel

“That would hopefully stimulate investments and production, and therefore have a dampening effect on prices.”

Last year, CAAS estimated that sustainable aviation fuel costs around three to five times more than conventional jet fuel.

Former global head of marketing and sustainability at Shell Low Carbon Solutions, Ms Tan Seow Hui, has been appointed SAFCo’s chief executive officer.

Responding to a question about how SAFCo’s approach differs from current procurement practices, she said the company allows for purchasing at a greater scale.

“(SAFCo) will give us a certain scale in terms of the ability to anchor longer term and bigger contracts, give us the ability to negotiate for more competitive prices versus any individual airline or companies are able to do so,” she said.

PROCUREMENT AND FUNDING MODEL

Mr Han said procurement, targeted to begin in 2026, will be carried out through a “transparent, competitive tender process” involving suppliers that meet international sustainability standards.

SAFCo has begun engaging businesses and airlines interested in the procurement mechanism, with discussions ongoing.

In its first year, the company plans to hire about 10 staff members, with headcount to be “gauged and sized accordingly thereafter”. It is also in the process of looking for office premises. Initial startup costs will be fully funded by CAAS.

The establishment of SAFCo follows the recent passage of the Civil Aviation Authority of Singapore (Amendment) Bill, which empowers CAAS to collect a sustainable aviation fuel levy and appoint a central procurement entity.