The Civil Aviation Authority of Singapore (CAAS) will establish a S$50 million ($37m) investment fund to support new programmes or initiatives that progress the nation’s ambitions to become a sustainable air transport hub. The Aviation Sustainability Programme will provide selected applicants with funding towards delivering measures that help to reduce aviation’s carbon emissions, build sustainable operational capabilities or unite industry partners to help create a sustainable aviation ecosystem. Sector-wide projects will be subsidised by as much as 70% and company-level projects by up to 50% as part of Singapore’s development of a Sustainable Aviation Blueprint, which is due to be released later this year. The investment programme coincides with an assessment by the flag carrier of neighbouring Malaysia that South-East Asian nations will substantially expand the production of sustainable aviation fuels from 2025 to narrow the current large gap in decarbonisation capabilities between Asia-Pacific markets and both the US and Europe.  

Singapore is growing its capabilities to decarbonise aviation not only to reduce harmful emissions from the sector but also to leverage new low-or-no-emission initiatives for competitive gain as it seeks to strengthen its position as a regional aviation hub. In September last year, an International Advisory Panel (IAP) on Sustainable Air Hub submitted to the CAAS a detailed report containing 15 initiatives to help decarbonise airline, airport and air traffic management operations. The final report will list medium-term targets to 2030 and longer-term measures to 2050, along with enabling pathways.   

“Coming out of the Covid-19 pandemic, we want to build sustainability as a new competitive advantage for the Singapore Air Hub,” said Han Kok Juan, Director General of CAAS. “The new $50 million programme is a response to industry feedback and will provide a much-needed boost to our effort to decarbonise. It will help alleviate investment costs and catalyse and accelerate company-level projects. It will also facilitate sector-wide risk pooling, capability building and collaboration, which will be how we can distinguish ourselves from other air hubs.”

In 2019, said CAAS, operations at Singapore’s airports created 297.5 ktCO2, or around 0.7% of the country’s domestic carbon emissions, while air operators accounted for 17.6 MtCO2, a 2.8% share of all carbon emissions from international aviation.

Singapore’s primary gateway, Changi Airport, is already engaged with partners including Singapore Airlines and its low-cost brand Scoot, Exxon Mobil, renewable fuels producer Neste and state investment company Temasek in a trial of sustainable aviation fuels. It is also investigating other initiatives including the production and supply of hydrogen fuels for future generations of aircraft. As well, CAAS has signed aviation accords with New Zealand, the US, the UK, and Japan which include collaboration on measures that can help to decarbonise air transport between those markets and Singapore. The Singapore government has also signed an agreement with ICAO through which Singapore will provide and receive assistance, capacity building and training (ACT) as part of ICAO’s ACT-SAF programme.

There are three key conditions for participation in the new Aviation Sustainability Programme. For applicants to qualify, they must meet at least one of the criteria – reduce energy use and demonstrate a reduction of at least 10% in carbon emissions; develop and test new service offerings that enhance the ability of companies to operate more sustainably; or bring together aviation ecosystem partners for R&D, green certification or standards development, and foster knowledge transfer.

Examples cited by CAAS of eligible proposals include the adoption of novel or more energy-efficient airport systems or equipment, more efficient and sustainable airport processes such as faster aircraft turnaround times or improved airside vehicle operations, and testing cleaner energy sources such as new alternative or low carbon fuels. CAAS will conduct its first call for proposals in April, with information available to applicants by email.

In neighbouring Malaysia, a senior executive of Malaysia Aviation Group said South-East Asian nations lagged other more developed markets in SAF production “by about a decade,” but would rapidly catch up from 2025.

Philip See, the company’s Group Chief Sustainability Officer and CEO Loyalty and Travel Solutions, told GreenAir that in their second full year of a formal sustainability programme, Malaysia Airlines and its sibling companies – Malaysia Airlines Cargo and regional subsidiary Firefly –  had performed 18 international, regional and domestic flights using SAF. 

“Last year, our SAF flights were a bit ad hoc to gauge customer comfort with the concept,” he said. “We want to move away from one-off SAF flights and beyond one-year to multi-year agreements. Our goal now is to build our operational depth of experience.

“We want to progress to something more structured and to start looking at issues such as procurement and SAF supply chain. We also have to address the local feedstock challenges we have in the region, but it’s not going to be done in the immediate term of one to two years.

“My view is that we are behind the US and Europe by about a decade but if we mobilise, we can narrow that gap relatively quickly. ASEAN (Association of Southeast Asian Nations) has a lot more work to do but we are very fast adopters. Asian SAF production will begin to take root beyond 2025 in my estimation.”   

See said the pace of SAF scale-up in the ASEAN region would be driven by government policies in member nations, particularly if blending mandates were applied. He also acknowledged the establishment by renewable fuels company Neste of a major SAF production facility in Singapore and said a key benefit in Asia would be logistics. But, he added, “there must still be SAF availability.”

Malaysia Airlines has worked closely with the Malaysian global energy company Petronas to procure blended SAF, but increasingly will work with other partners to source the fuel internationally. As part of the oneworld global airline alliance, Malaysia Airlines is bound by the goal of the alliance that by 2030, 10% of the jet fuel used by its member airlines will be blended SAF. In addition to its growing commitment to SAF, Malaysia Airlines has introduced a range of operational initiatives to help reduce carbon emissions from its flight and ground operations. The airline is also preparing to introduce 20 new Airbus A330-200 neo jets and 25 Boeing 737 MAX narrowbodies, which respectively are up to 11% and 14% more fuel efficient than the older versions they will replace. 

Top photo: Singapore Changi Airport

Bottom photo: In December 2021, Malaysia Airlines, in partnership with Petronas and Neste, operated its first SAF flight

Singapore has commenced a study of options to enable and drive the long-term use of sustainable aviation fuel at Changi International Airport. Among the measures being considered are SAF blending mandates and government incentives to encourage SAF production and use. The Civil Aviation Authority of Singapore (CAAS) has invited tenders from consultancy services to study and develop a “structural offtake mechanism” to support the adoption of SAF at Changi and strengthen its competitiveness as a sustainable aviation hub. The Singapore government says it is committed to establishing a sustainable air transport hub by adopting a broad range of measures, in the air and on the ground, including the use of zero emission fuels, sustainable energy production and use at Changi Airport, and reform of air traffic management.

“SAF is the key pathway for the decarbonisation of the aviation sector,” commented Han Kok Juan, Director-General of CAAS. Setting up an offtake mechanism, he said, “will encourage greater SAF adoption at Changi Airport, help create a long-term, predictable demand to incentivise capital-intensive investments in SAF production and help drive down price over time.”

Last year, the government commissioned and received the report of a 20-member Independent Advisory Panel (IAP), which it established to guide the sustainable hub process. The panel members included representatives of the International Air Transport Association (IATA), Airports Council International (ACI), Civil Air Navigation Services Organisation (CANSO), World Economic Forum (WEF), Airbus and Boeing. Among its comments, the IAP report said: “As a vibrant hub, Singapore needs to take a proactive stance in adopting offtake mechanisms to promote the use of SAF.”

The consultancy assessment on SAF offtake mechanisms is expected to begin in the first quarter of this year and take about four months to complete. The terms of reference include examining and shortlisting models for SAF mechanisms, considering “sustainability goals, air hub competitiveness and level playing field”. The consultancy is expected to develop offtake mechanism scenarios including participation options, the scope of the mechanism, funding and charging. It must also develop an economic model which reflects the impacts on air traffic growth, traffic mix and costs to the air hub, airlines and passengers, based on different targets and pace of implementation. 

In its report to the CAAS, the IAP highlighted measures already being explored or implemented elsewhere, including ticket surcharges by Air France and KLM to fund their use of SAF, voluntary carbon offset programmes by airlines to help travellers compensate for their travel emissions, blending mandates by the European Union and specific nations, and financial incentives by the US government to encourage both the supply and use of SAF.

“One of the fundamental design features of a SAF offtake mechanism is whether participation is voluntary or mandatory,” stated the IAP.  

“An example of a voluntary option is to offer incentives for the use of SAF. However, such incentives are usually transitional to assist companies in tiding over the initial high-cost barriers of adopting SAF. These incentives could be expensive and challenging to sustain in the long run. On the other hand, SAF mandates could provide long-term demand certainty, since fuel suppliers would be obligated to purchase a certain amount of SAF for their sales to airlines to meet the targets. The blend ratio could be adjusted to chart out a progressive adoption of SAF over time.

“Nonetheless, mandates could distort competition with other airports with less ambitious or even no mandates, resulting in an uneven playing field. That said, these options are not binary and a combination of these could be utilised to achieve optimal benefits.”

The advisory panel concluded airline-level offtake mechanisms, such as ticket surcharges to fund SAF, or voluntary carbon offset programmes, could have limited impact in cutting emissions and compromise airline competitiveness. It also said “a route level mechanism, or green corridor”, arising from government-to-government or airline-to-airline deals, would also make little difference due to its reduced scale.

“Comparatively,” the IAP added, “an airport-level mechanism has the highest potential for reducing carbon emissions while ensuring a level playing field among all airlines operating at that airport.”

The IAP said the high cost of buying SAF, currently three-to-five times the price of conventional aviation fuel, made funding a key consideration in choosing a SAF offtake mechanism.  “Broadly, three main groups of stakeholders could contribute: passengers, through higher ticket prices or SAF offsets; airlines, in the form of higher operating costs; and the government through possible incentives or other transitional funding support. All stakeholders would likely have to co-share the cost of adopting SAF, considering the current substantive price difference between SAF and fossil jet fuel.”

As well, the IAP believes Singapore’s status as a major transit hub further complicates the economics and application of a SAF offtake mechanism, and could require different treatment of passenger groups.

“For Changi Airport, its competitiveness is closely linked to its status as a transfer hub,” said the report. “Therefore, imposing a lower share of cost on transfer passengers could help to moderate the impact on competitiveness.”

The CAAS expects to publish a Sustainable Air Hub Blueprint this year that will incorporate the recommendations from the IAP. It will provide a decarbonisation roadmap with medium-term 2030 and longer-term 2050 targets “and tangible pathways for achieving them”.

Initial steps towards the introduction of SAF in Singapore were taken last year when CAAS partnered with Singapore Airlines, the state investment company Temasek, ExxonMobil and renewable fuels producer Neste, in a pilot programme to test delivery and use of the fuel at Changi Airport. The first batch of blended SAF was delivered to the airport in July and 1,000 SAF credits offered for sale to corporations, individual travellers and freight companies to help them to compensate for the emissions of their flights, while also boosting demand for the fuel.

The Singapore government has also signed aviation cooperation agreements with New Zealand, the US and most recently Japan, which collaborate on measures including greater use of sustainable aviation fuel and studies of the viability of ‘green travel lanes’ in which travellers are encouraged to use flights powered by SAF, in return for benefits such as expedited passage through airport ‘green lanes’.

Photo: Changi Airport Group