Singapore’s chance to become a global leader in sustainable aviation fuel

Asia’s aviation sector has experienced rapid growth in recent years, becoming one of the world’s largest markets.

Even on modest forecasts, passenger numbers across Asia are set to double, with the International Air Transport Association forecasting more than four billion passengers in the Asia-Pacific by 2040.

In Singapore itself, passenger numbers are already returning to their non-stop growth trajectory. With this growth comes an opportunity for Singapore to demonstrate true regional leadership.

Singapore’s recent publication of its Sustainable Air Hub Blueprint, and its announcement of a sustainable aviation fuel levy, are a recognition of the importance of sustainability to Singapore’s aviation future.

Sustainable aviation fuels are produced by converting plant oils or agri-waste materials, and can deliver up to an 80 per cent reduction in life cycle carbon dioxide emissions. These are currently the only viable alternative to traditional kerosene-based fuels for medium and long-haul flights.
 

As a result, global demand for sustainable aviation fuels is forecast to outstrip supply in the next few years. And countries that accelerate domestic production will win out in this global dash.

So while Singapore’s announcement of a passenger sustainable aviation fuel levy may initially seem difficult to swallow, it will pay dividends for the country’s economic progress and its green ambitions down the road.

The industry and government should work together to raise public awareness of how a domestic sustainable aviation fuel industry will benefit the people calling this island home.
 

Opportunities at home

With fuel production located in a corner of Singapore – out of sight on Jurong Island – and automation being an increasing part of manufacturing, the opportunities arising from sustainable aviation fuel production may seem distant and limited. Yet, they should not be underestimated.

Alongside the levy, the government has mandated that airlines use one per cent sustainable aviation fuel on departing flights by 2026.

Together with the levy, this will create an initial demand for sustainable aviation fuel that will attract the essential investment Singapore needs to scale up production.

This, in turn, has the potential to unlock tens of thousands of high-quality jobs and provide a multibillion-dollar boost to the economy.

The chances for skills development and new career pathways need to be communicated to the climate-conscious younger generation, who will benefit not just from well-paid career opportunities but also from an industry that directly supports a sustainable future.
 

Workforce Singapore and institutes of higher learning can play a vital role. Several training options already exist, yet many focus on sustainability or supply chain management, and few cover sustainable aviation fuel.

A homegrown sustainable aviation fuel industry will also increase fuel supply security in a volatile and highly competitive global market. As international demand for such fuel grows, so does the potential for a thriving export market. A homegrown sustainable aviation fuel industry will also increase fuel supply security in a volatile and highly competitive global market. As international demand for such fuel grows, so does the potential for a thriving export market.

There could be other benefits, too, such as boosting the competitiveness of Singapore’s already well-regarded aircraft maintenance industry by building a niche in sustainable aviation fuel-related engine maintenance.

A virtuous cycle could be established as Singapore further becomes a magnet for sustainable industries – tapping its existing strengths in innovation, technology, and infrastructure – which could lead to job opportunities across sectors.

However, the government must demonstrate strong leadership to ensure feedstocks for sustainable aviation fuel come from genuinely sustainable sources.

Existing partnerships such as the Singapore Alliance for Sustainable Palm Oil could be leveraged to establish governance mechanisms, build consensus, and improve transparency regarding how waste from the palm industry could be used by aviation.

It is essential that Singapore looks towards feedstocks that are not only abundant in the region but cultivated in a sustainable and traceable manner to ensure that it can achieve its environmental objective, maintain public support, and secure foreign investment.

Singapore’s commitment to strong governance lends itself to a leadership role in this space.
 

Keeping up with competition

Singapore’s sustainable aviation fuel mandate demonstrates alignment with other regional aviation centres, such as India and Japan, but global competitors further afield are acting faster or doing more.

The UK is rolling out a more ambitious sustainable aviation fuel mandate, requiring at least 10 per cent of jet fuel to be made from sustainable feedstocks by 2030.

The European Union’s (EU) mandate requires its airports to use at least two per cent sustainable aviation fuel by next year and six per cent by 2030. The EU and US are also providing tax credits to stimulate sustainable aviation fuel investment.

Despite being a country that does not produce a drop of crude oil, Singapore managed to develop into one of the world’s top oil-refining centres during the 1980s and 1990s, spawning downstream economic activities.

This was thanks to the country’s economic foresight, strategic location, and a desire to get a headstart, and the industry has been a key part of Singapore’s economic development.

To replicate its earlier success, Singapore will not only need to continue supporting the nascent sustainable aviation fuel production industry, but go further and faster to increase investor confidence and strengthen its position in the global arena.

Singapore is part of a global dash for sustainable aviation fuel – and like any race, those fastest out of the blocks are most likely to win.
 

The writer is the founder of aviation consultancy Propelo Aviation. He was formerly lead of research translation at the Aviation Studies Institute at the Singapore University of Technology and Design.
 

This article was first published in The Business Times on 1 May 2024, and is reproduced with the writer's permission.