Airfares expected to rise as Singapore introduces levy on sustainable aviation fuel

  • Singapore plans to introduce a levy on airfares to cover purchases of sustainable aviation fuel
  • All flights departing from Singapore will need to use at least 1% sustainable aviation fuel starting from 2026
  • The aim is to increase the use of sustainable aviation fuel to between 3% and 5% by 2030
  • The procurement of sustainable aviation fuel will be centralized, using levies collected to aggregate demand and reap economies of scale
  • Businesses and organizations will be invited to make voluntary purchases of sustainable aviation fuel
  • The size of the levy will depend on factors like distance travelled and passenger class
  • The use of sustainable aviation fuel is expected to contribute around 65% of the carbon emission reduction needed to achieve net zero by 2050
  • More details about the levy will be released in 2025

Singapore plans to introduce a levy on airfares to cover purchases of sustainable aviation fuel, in a bid to decarbonize the industry. Starting from 2026, all flights departing from Singapore will need to use at least 1% sustainable aviation fuel, with the aim of increasing it to between 3% and 5% by 2030. The procurement of sustainable aviation fuel will be centralized, using levies collected to aggregate demand and reap economies of scale. Businesses and organizations will also be invited to make voluntary purchases of sustainable aviation fuel. The size of the levy will depend on factors like distance travelled and passenger class. The use of sustainable aviation fuel is expected to contribute around 65% of the carbon emission reduction needed to achieve net zero by 2050. More details about the levy will be released in 2025.

Factuality Level: 9
Factuality Justification: The article provides factual information about Singapore’s plan to introduce a levy on airfares to cover purchases of sustainable aviation fuel. It includes details about the percentage of sustainable aviation fuel required, the management of additional costs, the impact on ticket prices, and the expected contribution to carbon emission reduction. The information is presented objectively without bias or sensationalism.
Noise Level: 3
Noise Justification: The article provides relevant information about Singapore’s plan to introduce a levy on airfares to cover purchases of sustainable aviation fuel. It includes details on the percentage targets for sustainable aviation fuel, how the levy will be managed, and the expected impact on ticket prices. The article stays on topic and supports its claims with information from the Civil Aviation Authority of Singapore. Overall, the article is focused, informative, and provides insights into efforts to decarbonize the aviation industry.
Financial Relevance: Yes
Financial Markets Impacted: The introduction of a levy on airfares to cover purchases of sustainable aviation fuel will impact airlines operating in Singapore and potentially other airlines that fly to and from Singapore. Companies involved in the production and supply chain of sustainable aviation fuel may also be affected.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses a financial initiative by Singapore to introduce a levy on airfares for sustainable aviation fuel, which will have direct financial implications for airlines and related companies. There is no mention of any extreme event in the article.
Key People: Kimberley Kao (Author)

Reported publicly: www.marketwatch.com