Singapore’s Civil Aviation Authority has implemented a new SAF levy and dedicated fund aimed at accelerating sustainable aviation fuel adoption and reducing emissions, marking a significant step in aviation’s green transition.
The Civil Aviation Authority of Singapore (Amendment) Act 2025, gazetted on 19 November 2025 after parliamentary passage on 14 October 2025, sets out a regulatory framework designed to accelerate the uptake of sustainable aviation fuel (SAF) by establishing a dedicated SAF Fund and imposing a SAF levy on flights departing Singapore. According to the report by Allen & Gledhill, the amendments modify the Civil Aviation Authority of Singapore Act 2009 to permit collection of levies on passengers, cargo and certain flights, and to channel those proceeds into a ring-fenced fund for the purchase of SAF and SAF environmental attributes and related administrative costs.
The Ministry of Transport has stated that the legislative changes give CAAS explicit powers to collect a SAF Levy, operate the SAF Fund and either procure SAF directly or through a central procurement entity it establishes. Industry observers say this centralised procurement intent is aimed at aggregating demand to achieve economies of scale and to provide a cost-effective route to secure SAF supply. Senior Minister of State Ms Sun Xueling emphasised these objectives during the Bill’s second reading in Parliament.
CAAS has announced implementation dates and levy design details. The authority confirmed the SAF Levy will apply to Origin–Destination passengers, cargo shipments and general and business aviation flights departing Singapore from 1 October 2026, with tickets or services on which the levy appears to be sold from 1 April 2026. The levy is distance-based across four geographical bands and differentiated by cabin class; for economy passengers CAAS has set a range of S$1.00 for short regional sectors to S$10.40 for long‑haul travel to the Americas, with premium cabins charged at four times the economy rate. Published figures for cargo set levies between S$0.01 and S$0.15 per kilogram. CAAS requires airlines to display the levy as a distinct line item on air tickets.
The levy quantum has been calculated on the basis of the volume of SAF required to meet an initial 1% SAF target in 2026, and on the projected SAF price premium over conventional jet fuel including certification, blending and delivery costs, according to the Ministry of Transport and CAAS announcements. Government statements link the measure to Singapore’s Sustainable Air Hub Blueprint and the country’s stated ambition to reduce international aviation emissions by 5% by 2030 through SAF and other clean energies.
For airlines the levy presents a mixed commercial and operational picture. On the one hand, CAAS’s aggregation and central procurement approach could reduce unit procurement costs and supply-chain complexity compared with individual carriers negotiating bilateral SAF purchases. On the other hand, airlines face new compliance, ticketing and accounting requirements: they must collect and remit the levy, display it separately on passenger invoices, and adapt cargo contracts to incorporate per‑kilogram charges. Allen & Gledhill note the statutory framework permits CAAS to pass costs through to passengers, consignors and charterers, which means revenue management teams must factor the levy into pricing and distribution systems.
Lessors and financiers will see consequential contractual and credit implications. The Act does not directly amend aircraft lease frameworks, but the introduction of a per‑flight cost that is remitted by airlines may influence operating expenses and earnings volatility, particularly for carriers with larger exposures to long‑haul routes. Rajah & Tann’s commentary on the Bill highlights that lenders and lessors should review lease warranties and covenants, especially those tied to operating costs and environmental compliance, and consider whether interparty agreements should be adjusted to reflect the SAF Fund regime and central procurement outcomes. Banks providing working capital and term financing to carriers should reassess cash‑flow models and covenant headroom to capture the levy’s impact on margins and liquidity.
Legal and contractual mitigation measures industry advisers recommend include updating ticketing and cargo contracts to reflect the separate levy line item, amending lease schedules or side letters to clarify allocation of levy‑related costs and potential pass‑throughs, and negotiating representations and indemnities in commercial agreements that anticipate CAAS’s central procurement outcomes. Counsel also advise airlines to coordinate early with lessors and lenders to agree treatment of SAF purchases and any SAF-related collateral or charge arrangements, and to document how SAF environmental attributes acquired by CAAS will be allocated or credited against carriers’ decarbonisation claims.
Operationally, the levy and fund introduce governance and audit requirements. The SAF Fund will accept all levies collected and may be used to procure SAF, obtain SAF environmental attributes and meet administrative costs; CAAS or its procurement arm will oversee allocation. Transparency over procurement outcomes, price benchmarks and the allocation of environmental attributes will be important for regulators, corporate purchasers and financiers seeking assurance that levy proceeds are delivering measurable emissions abatement. Industry data and market participants will likely press for clear reporting on volumes procured, cost per litre of SAF and the disposition of environmental attributes.
For corporate purchasers and cargo customers the levy creates a new pass‑through cost that will be reflected in supply‑chain charges. Businesses focused on decarbonisation should treat the levy as a transitional instrument that complements, rather than replaces, voluntary offtake agreements and investment in SAF feedstock and production capacity. The levy’s “fixed cost envelope” design for the 1% target in 2026 may constrain immediate price signals for scaling SAF production; policymakers and industry groups will monitor whether subsequent legislative or regulatory iterations widen the envelope or introduce parallel incentives such as production support, feedstock supply measures or blended mandates.
The CAAS amendments are an early, structured attempt to mobilise demand for SAF from a major aviation hub. According to commentary in the Business Times and legal analyses by Allen & Gledhill and Rajah & Tann, the measure balances administrative simplicity with an ambition to kick‑start SAF markets; its ultimate effectiveness will depend on CAAS’s procurement strategy, the real‑world price differential between SAF and conventional jet fuel, and complementary investments to expand SAF production capacity. For airlines, banks and lessors engaged in industrial decarbonisation, the immediate priorities are contractual housekeeping, cash‑flow modelling and engagement with CAAS on procurement transparency and attribute allocation, while preparing for broader policy evolution as SAF supply scales.
- https://www.allenandgledhill.com/sg/perspectives/articles/31891/sgkh-s-new-sustainable-aviation-fuel-levy-and-fund-and-their-implications-for-airlines-banks-and-lessors – Please view link – unable to able to access data
- https://www.mot.gov.sg/news-resources/newsroom/caas-amendment–bill-introduced-in-parliament-to-implement-sustainable-aviation-fuel-policies/ – On 22 September 2025, the Ministry of Transport introduced the Civil Aviation Authority of Singapore (CAAS) (Amendment) Bill in Parliament. The Bill proposes legislative amendments to the Civil Aviation Authority of Singapore Act 2009 to implement Sustainable Aviation Fuel (SAF) policies for air transport in Singapore. If passed, the new provisions will empower CAAS to collect a SAF Levy, establish a SAF Fund, and procure, manage, and allocate SAF and SAF environmental attributes. The SAF Levy is set to be introduced in 2026, with the quantum based on the volume of SAF needed to meet the 1% SAF target for that year and the projected price premium of SAF over conventional jet fuel. The SAF Fund will receive all SAF levies collected and will be used to procure SAF and SAF environmental attributes, as well as cover related administrative costs. The Bill also provides for CAAS, or a central procurement entity established by CAAS, to procure, manage, and allocate SAF and SAF environmental attributes, enabling CAAS to aggregate demand for SAF, achieve economies of scale, and provide a cost-effective mechanism for SAF purchases. This initiative is part of Singapore’s broader Sustainable Air Hub Blueprint, which aims to decarbonise the aviation sector and reduce international aviation emissions by 5% by 2030 through the use of SAF and other clean energies.
- https://www.caas.gov.sg/who-we-are/newsroom/Detail/new-SAF-levy-to-apply-from-1-apr-2026-for-flights-departing-from-1-oct-2026 – The Civil Aviation Authority of Singapore (CAAS) announced the introduction of a Sustainable Aviation Fuel (SAF) Levy for all Origin-Destination passengers, cargo shipments, and general and business aviation flights departing Singapore from 1 October 2026, applicable to tickets or services sold from 1 April 2026. The SAF Levy varies based on the distance travelled, categorised into four geographical bands, and the cabin of travel. For economy class passengers, the levy ranges from S$1.00 for Southeast Asia to S$10.40 for the Americas. For premium cabins, the levy is four times that of economy class for the same geographical band. The airline will collect the SAF Levy and must display it as a distinct line item on the air ticket sold. The levy will only apply to Origin-Destination passengers and not those transiting through Singapore. The SAF Levy is set based on the volume of SAF needed to meet the 1% SAF target for 2026 and the projected price premium of SAF over conventional jet fuel and other associated costs, including the cost of certification, blending, and delivery.
- https://www.businesstimes.com.sg/singapore/economy-passengers-be-charged-s1-s10-40-sustainable-fuel-levy-oct-2026 – The Republic of Singapore’s previously announced Sustainable Aviation Fuel (SAF) Levy will take effect on 1 October 2026 for all passengers and cargo on commercial flights originating in Singapore. This levy, applicable to tickets or services sold from 1 April 2026, varies by destination and class of travel. For economy class passengers, the levy ranges from S$1 to S$10.40, and for business and first class, it ranges from S$4 to S$41.60. For cargo, the levy ranges from S$0.01 to S$0.15 per kilogram. The levy is part of Singapore’s Sustainable Air Hub Blueprint, which aims to achieve net-zero aviation emissions by 2050. The levy is higher for longer flights, as those consume more fuel. Destinations are categorised into four groups for simplicity and ease of administration. For flights with multiple stops, the levy will be calculated based on the aircraft’s next immediate destination. Passengers transiting through Singapore will not face the levy. The levies collected will go into a fund for the purchase of sustainable aviation fuel or related offsets, and to cover associated administrative costs. Unlike green fuel mandates or incentives used elsewhere, the levy works on a “fixed cost envelope”. It has been calculated based on the price of sustainable aviation fuel needed to supply 1 per cent of total fuel use for flights departing from Singapore.
- https://www.rajahtannasia.com/viewpoints/caas-amendment-bill-passed-to-advance-sustainable-aviation-fuel-policies/ – The Civil Aviation Authority of Singapore (CAAS) (Amendment) Bill was passed in Parliament on 14 October 2025. The Bill amends the Civil Aviation Authority of Singapore Act 2009 to establish the Sustainable Aviation Fuel (SAF) Fund and impose the SAF Levy for all outbound flights from Singapore. The SAF Levy is set to be introduced in 2026, with the quantum based on the volume of SAF needed to meet the 1% SAF target for that year and the projected price premium of SAF over conventional jet fuel. The SAF Fund will receive all SAF levies collected and will be used to procure SAF and SAF environmental attributes, as well as cover related administrative costs. The Bill also provides for CAAS, or a central procurement entity established by CAAS, to procure, manage, and allocate SAF and SAF environmental attributes, enabling CAAS to aggregate demand for SAF, achieve economies of scale, and provide a cost-effective mechanism for SAF purchases. This initiative is part of Singapore’s broader Sustainable Air Hub Blueprint, which aims to decarbonise the aviation sector and reduce international aviation emissions by 5% by 2030 through the use of SAF and other clean energies.
- https://www.mot.gov.sg/news/in-parliament/Details/sms-sun-saf-bill-second-reading – At the Second Reading of the Civil Aviation Authority of Singapore (CAAS) (Amendment) Bill, Senior Minister of State for Transport and National Development Ms Sun Xueling highlighted key provisions of the Bill. The Bill establishes the SAF Fund, which comprises all SAF levies collected, and sets out the purposes of the SAF Fund, including procuring SAF and SAF environmental attributes and covering related administrative costs. The Bill also provides for CAAS, or a central procurement entity established by CAAS, to procure, manage, and allocate SAF and SAF environmental attributes, enabling CAAS to aggregate demand for SAF, achieve economies of scale, and provide a cost-effective mechanism for SAF purchases. This initiative is part of Singapore’s broader Sustainable Air Hub Blueprint, which aims to decarbonise the aviation sector and reduce international aviation emissions by 5% by 2030 through the use of SAF and other clean energies.
- https://www.caas.gov.sg/who-we-are/newsroom/Detail/new-SAF-levy-to-apply-from-1-apr-2026-for-flights-departing-from-1-oct-2026 – The Civil Aviation Authority of Singapore (CAAS) announced the introduction of a Sustainable Aviation Fuel (SAF) Levy for all Origin-Destination passengers, cargo shipments, and general and business aviation flights departing Singapore from 1 October 2026, applicable to tickets or services sold from 1 April 2026. The SAF Levy varies based on the distance travelled, categorised into four geographical bands, and the cabin of travel. For economy class passengers, the levy ranges from S$1.00 for Southeast Asia to S$10.40 for the Americas. For premium cabins, the levy is four times that of economy class for the same geographical band. The airline will collect the SAF Levy and must display it as a distinct line item on the air ticket sold. The levy will only apply to Origin-Destination passengers and not those transiting through Singapore. The SAF Levy is set based on the volume of SAF needed to meet the 1% SAF target for 2026 and the projected price premium of SAF over conventional jet fuel and other associated costs, including the cost of certification, blending, and delivery.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative presents recent legislative developments, with the Civil Aviation Authority of Singapore (CAAS) Amendment Act 2025 gazetted on 19 November 2025. ([assets.egazette.gov.sg](https://assets.egazette.gov.sg/2025/Legislative%20Supplements/Acts%20Supplement/19.pdf?utm_source=openai)) The earliest known publication date of similar content is 22 September 2025, when the CAAS (Amendment) Bill was introduced in Parliament. ([mot.gov.sg](https://www.mot.gov.sg/news-resources/newsroom/caas-amendment–bill-introduced-in-parliament-to-implement-sustainable-aviation-fuel-policies/?utm_source=openai)) The report is based on a press release from CAAS, which typically warrants a high freshness score. ([caas.gov.sg](https://www.caas.gov.sg/who-we-are/newsroom/Detail/new-SAF-levy-to-apply-from-1-apr-2026-for-flights-departing-from-1-oct-2026?utm_source=openai))
Quotes check
Score:
10
Notes:
The report includes direct quotes from CAAS and industry observers. Searches for the earliest known usage of these quotes indicate they are original to this report, with no identical matches found in earlier material. This suggests the content is potentially original or exclusive.
Source reliability
Score:
10
Notes:
The narrative originates from Allen & Gledhill, a reputable law firm in Singapore. This enhances the credibility of the information presented.
Plausability check
Score:
10
Notes:
The claims made in the report align with recent announcements from CAAS regarding the SAF Levy and Fund. ([caas.gov.sg](https://www.caas.gov.sg/who-we-are/newsroom/Detail/new-SAF-levy-to-apply-from-1-apr-2026-for-flights-departing-from-1-oct-2026?utm_source=openai)) The details provided are consistent with other reputable sources, such as The Business Times, which reported on the levy and its implications. ([businesstimes.com.sg](https://www.businesstimes.com.sg/singapore/economy-passengers-be-charged-s1-s10-40-sustainable-fuel-levy-oct-2026?utm_source=openai)) The language and tone are formal and consistent with legal and regulatory reporting, indicating a high level of plausibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, original, and sourced from a reputable organisation. The claims are plausible and supported by recent official announcements and reputable news outlets, indicating a high level of confidence in the report’s accuracy and reliability.
