Singapore introduces passenger levy for sustainable aviation from 2026

In an initiative to combat climate change, Singapore has announced that travelers flying out of the city-state will face higher airfares from 2026 due to a new levy aimed at promoting the use of environmentally sustainable jet fuel.

This announcement was made by Transport Minister Chee Hong Tat on 19 February at the second Changi Aviation Summit held at the Sands Expo and Convention Centre.

The levy is designed to fund the bulk purchase of sustainable aviation fuel, significantly more costly than traditional jet fuel, to encourage its adoption across the aviation sector.

Sustainable fuel, primarily derived from waste materials like used cooking oil, is seen as a key strategy for the aviation industry to reduce its carbon footprint, despite being three to five times more expensive.

Economy-class passengers are expected to pay an additional S$3 for short-haul flights, S$6 for medium-haul, and S$16 for long-haul flights to destinations such as Bangkok, Tokyo, and London, according to preliminary estimates from the Civil Aviation Authority of Singapore (CAAS).

These estimates are in line with Singapore’s ambition for sustainable aviation fuel to constitute 1% of all jet fuel consumed at Changi Airport and Seletar Airport by 2026, aiming to increase this to between 3% and 5% by 2030.

Currently, travellers on flights departing from Changi Airport currently pay a fee of S$62.20 – comprising S$43.40 in passenger service and security fee (PSSF), S$8.00 in aviation levy and S$10.80 in airport development levy.

The initiative is a cornerstone of the Singapore Sustainable Air Hub Blueprint, launched by Minister Chee on Monday.

The blueprint includes 12 initiatives designed to address aviation emissions, with a medium-term goal of reducing carbon emissions from airport operations to 326 kilotonnes annually by 2030 — a 20% decrease from 2019 levels.

By 2050, Singapore aims to achieve net-zero domestic emissions from its airports and net-zero international emissions from its carriers, excluding future developments in Changi East, including Terminal 5. Emissions targets for these projects will be set separately.

According to CAAS, Singapore’s approach, using a levy to fund sustainable aviation fuel use, is the first country globally to adopt such a measure. Other countries have implemented sustainable aviation fuel requirements through mandates based on fixed volumes, with varying targets set by France, Sweden, the European Union, Japan, and India.

The introduction of the levy comes amid challenges, including the nascent market for sustainable fuel and its uncertain supply. Despite these hurdles, some airlines, like Air France and KLM, have already started passing the additional costs of green fuel onto passengers.

The levy’s amount will be periodically reviewed and is designed to vary based on factors such as flight distance and travel class, ensuring a fair contribution from all passengers. Detailed information on the impact on premium classes and transit passengers will be announced in 2025, following further industry consultation.

Minister Chee emphasized the importance of providing sufficient lead time before implementing the levy and highlighted the incentive it creates for fuel producers to invest in sustainable production capabilities.

The initiative also includes efforts to increase the production of sustainable aviation fuel within Singapore and the region, alongside other measures to reduce aviation emissions.

In his Facebook post on Monday, Mr Chee iterates, “The global aviation community is committed to achieving net zero emissions by 2050, and Singapore is playing our part.”