The transition of Asia-Pacific markets to sustainable aviation fuel has just been boosted in five nations, with fresh developments in Australia, Singapore, Japan, Malaysia and Thailand. The Australian government, in its 2024 budget, has announced plans to fast-track support for a low-carbon liquid fuel sector, with a specific initial focus on SAF, while Singapore Airlines and its low-cost sibling Scoot have announced their first purchase of the fuel at Changi International Airport from the newly activated Neste Singapore refinery, currently the world’s largest single SAF production plant.  Two major collaborations have also been announced between Japanese and Malaysian partners, in which SAF produced in Malaysia will be supplied to Japan, to help meet that country’s 2030 mandate of 10% SAF usage. Another regional collaboration will see used cooking oil sourced from another Japanese company used to help produce SAF at a new refinery due to open in Thailand in the first half of 2025.

Following strong lobbying from the aviation and energy sectors, the Australian government has committed to supporting the production of low-carbon liquid fuels, including SAF, in the Net Zero strategy of the nation’s Future Made in Australia Plan.

Over the next decade, the government will invest A$1.7 billion ($1.14bn) to support the Australian Renewable Energy Agency in commercialising net zero innovations including low-carbon fuels. 

Additionally, over four years starting in 2024-25, the government will commit A$18.5 million ($12.4m) to develop a certification scheme for low-carbon fuels including SAF and renewable diesel by expanding the national Guarantee of Origin scheme, which is already being developed to track and verify emissions linked to the production in Australia of hydrogen and renewable electricity.

A further A$1.5 million ($1m) will be spent over two years to investigate costs and benefits of introducing mandates or other demand-side measures to drive up the use of low carbon liquid fuels. The government will also undertake a “targeted” consultation on production incentives to support local production of new fuels. 

“Two years ago in Australia, SAF was an acronym with barely a skerrick of interest,” said Andrew Parker, Chief Sustainability Officer of the Qantas Group, one of the strongest advocates of developing a local SAF sector and mandates to drive up demand.

“The commencement of this funding and related policy measures are significant first steps on our path to decarbonise aviation here,” said Parker. “A progressive universal SAF mandate remains the most essential policy lever we have to secure capital and technology and ensure consistency and maintain competitiveness with our major trading partners.”   

Airbus, another strong advocate of and investor in Australian SAF, welcomed the government’s initiatives. “They will help move SAF from plans today into planes tomorrow,” said Stephen Forshaw, the airframer’s chief representative in Australia, New Zealand and the Pacific. “The world is moving to scale up production of SAF with supply-side support by governments helping to derisk early projects. Australia’s announcements recognise this.”

At Singapore’s Changi International Airport, the first SAF produced locally by global refiner Neste will be supplied to SIA Group‘s two carriers, Singapore Airlines and its low-cost sibling Scoot.

The carriers’ parent company, Singapore Airlines Group, has agreed to buy 1,000 tonnes of neat SAF, which Neste will then blend and transfer into the airport’s fuel system, one batch in the second quarter of 2024, the other in the fourth. The SAF will be produced from recycled waste and residue raw materials.

“This supply of locally produced SAF to Changi Airport is a milestone in our journey of supporting the aviation industry and governments in the region to achieve their emissions reduction goals,” said Alexander Kueper, Neste’s VP, Renewable Aviation. “We are looking forward to expanding our cooperation with Singapore Airlines as well as supplying visiting carriers at Changi Airport.”

The airline’s Chief Sustainability Officer, Lee Wen Fen, said the deal was an important step towards a target of including 5% SAF in its total 2030 fuel use. As well, from this month, SIA will offer 1,000 SAF book-and-claim units (BCUs) for purchase by corporate travellers, shippers and freight forwarders to help compensate for their flight emissions. Each BCU will equate to 1 tonne of neat SAF and its associated carbon dioxide reduction benefit.

Three Japanese corporations have also entered new SAF deals, with two in Malaysia and one in Thailand.

Tokyo-based biotechnology company Euglena, which produces renewable fuels from used cooking oils and microalgae, has formed a new partnership with Malaysia’s national oil company Petronas to build and operate a commercial biofuels production plant in Malaysia. Euglena has also signed a Memorandum of Understanding with Japan Airport Terminal (JAT), which operates Tokyo’s Haneda Airport, to jointly develop a SAF supply chain to the airport, with the two also looking to commercialising and providing the fuel to airlines.

If the Japanese government’s mandate of 10% SAF usage by 2030 was applied to Haneda Airport’s total jet fuel consumption in 2022, the companies estimate the airport would require 220 million litres of SAF per year. Eugena and JAT claim they would be able to supply 50 million litres of SAF per year, or 23% of the total required.

Marubeni Corporation, another major Japanese industrialist, has just announced an MoU with InvestSarawak, a government agency in the Malaysian state of Sarawak, to study the feasibility of producing SAF from biomass resources in the region. No details of fuel volumes or production timeframes were disclosed.

Meanwhile, a third Japanese company, Sumitomo Corporation, has agreed to provide used cooking oil to Thailand’s Bangchak Group, which is developing a new SAF plant with capacity to produce 1 million litres of fuel per day, commencing in the second quarter of 2025. The UCO will supplement supplies collected by Bangchak through its 162 service stations in Thailand. In a separate deal, Sumitomo and Japan’s Cosmo Oil will buy SAF produced by Bangchak.

Photo: Neste’s Singapore refinery

Tony Harrington

Correspondent

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Renewable fuels producer Neste has officially opened its expanded refinery in Singapore, increasing annual production capacity to 2.6 million tons, of which up to 1 million will be sustainable aviation fuel. The company has also established an integrated SAF supply chain to enable blended fuel to be delivered to airlines at Singapore’s Changi International Airport. It has also conditionally agreed to acquire a minority shareholding in Changi Airport Fuel Hydrant Installation Company (CAFHI), the airport’s fuel storage and infrastructure joint venture. The Singapore government, which is developing the city state as a sustainable aviation hub, welcomed the Neste development as “a significant move”, but said it was insufficient to meet soaring demand for SAF. Transport Minister S Iswaran told an APAC Transport Minsters’ Meeting in Detroit on May 15 that Singapore was considering both incentives and mandates to increase demand and lower the cost of SAF, but warned ‘feedstock nationalism’, through which countries limited the supply of SAF ingredients, threatened to further constrain availability of the fuel.

Neste’s CEO and President, Matti Lehmus, said the €1.6 billion ($1.7bn) upgrade of the Singapore plant, completed in April and officially commissioned this week, was an important milestone in the company’s strategy to increase production of renewable fuels. “It’s a remarkable achievement given the complexity of the project, and that it was carried out during a global pandemic,” he said.

The development initially will increase Neste’s SAF production capacity up to 10-fold per year from 100,000 tons to as much as 1 million, with further expansion to 1.5 million tons by the end of this year when the company completes modifications of another refinery in Rotterdam, and 2.2 million tons in the first half of 2026 when further development of that plant is completed.

Sami Jauhiainen, acting EVP for Neste’s Renewable Aviation division, said neat SAF was produced at the refinery in Singapore’s Tuas region, then sent to a blending facility to be combined with conventional fuel and certified to meet jet fuel standards, before final delivery to airlines at Changi Airport. The company predominantly uses waste oils, fats and other residues to produce its SAF, but is exploring other feedstocks. As well as increasing production capability in Singapore, the upgrade will increase the Tuas plant’s raw material pre-treatment capacity, enabling it to process a broader range of waste and residue raw materials for conversion to sustainable fuels.

“Singapore is a leading aviation hub in the Asia-Pacific region,” said Jauhiainen. “In addition to being a global hub for Neste’s SAF production, we have established an integrated SAF supply chain to Changi Airport to make our product available to an increasing number of regional and international airlines.”

Subject to “fulfilment of customary closing conditions”, the supply chain expansion will include a minority shareholding by Neste in the CAFHI fuel storage and infrastructure joint venture in the airport.

Changi Airport is the latest in a global network through which Neste supplies blended product direct to airlines. Other locations include San Francisco and Los Angeles on the US west coast, and the European cities of Amsterdam and Neste’s corporate base, Helsinki. As well, to broaden distribution, Neste is supplying SAF to a range of fuel marketing companies outside its airports network, including in Japan and New Zealand, as it builds presence in the Asia-Pacific region.  

“Singapore has world-class logistics connectivity enabling efficient transportation of the renewable raw materials as well as final products globally,” added Lehmus. “Also, its world-class education supports the availability of future talents to be part of our production and commercial operations, as well as to enhance research and development in our recently-established Innovation Centre.”

The formal launch of Neste’s Singapore development project coincided with a speech by the country’s Transport Minister, S Iswaran, at the SAF Investment Summit, held as part of the APEC Transport Ministers’ Meeting in Detroit (see article). “There is generally a consensus that this is one of the areas which is going to yield maximum outcomes for us in the near term, in terms of reducing the carbon footprint of aviation,” he said. “The real question is the ‘how’.”

He highlighted supply chain initiatives, strengthening demand-side signals and stronger global collaboration as key areas of focus, adding: “It is quite clear that initiating things on a pilot scale is not a problem. Scaling, because of the cost, is the issue, and we need to deal with this.”

The Minister said Singapore considered it highly important to establish a scientifically-based process to validate the sustainability of feedstock, and alluded to the high availability but low global acceptance of palm oil in Asia. “Presently, the type of available feedstock differs across regions, and despite being recognised by ICAO’s CORSIA regime, some abundant feedstock in the Asia-Pacific region may not be as widely accepted in certain parts of the world, due to perceived higher environmental risks. This variation is understandable, but what we think is important is to establish a process that can validate this consistently.”

Iswaran said Singapore was working closely with Boeing, the Roundtable on Sustainable Biomaterials (RSB) and other stakeholders to assess how member countries of the Association of South East Asian Nations (ASEAN) could leverage potential feedstock supplies across the region to help produce SAF.

“To reduce logistical challenges and stabilise the cost of SAF, we must guard against feedstock nationalism,” he warned.  “Currently the Hydroprocessed Esters and Fatty Acids (HEFA) pathway is the most widely commercialised and viable SAF production option.” Without detailing specific examples, he added: “If the flow of biomass is restricted by countries, the supply of SAF will be further constrained.”

He urged governments to “catalyse investment into more nascent SAF production pathways and technologies” by supporting research and development of processes including alcohol-to-jet and power-to-liquid. “Establishing regional or global green financing networks can also enable us to tap into the growing green financing and carbon trading markets to drive R&D into SAF,” he said.

He reported the Civil Aviation Authority of Singapore was considering both incentives and mandates to drive up the use of SAF, as well as a ‘corporate buyers’ club’, designed to encourage early adopters of more sustainable air travel to act collectively, “thereby aggregating the demand, creating the scale and sending the signals that the industry needs.”  

Strong international collaboration was also essential to support SAF supply and demand initiatives, he said, adding: “One area is harmonising polices and mutually recognising a common set of standards and frameworks on SAF accounting and use. If we do not have that, then we really will have a patchwork of solutions around the world, and for airlines and industry players I think this is going to be a challenge.”

Top and below photos: Neste’s newly expanded refinery in Singapore

Below: Channel News Asia (CNA) report on the opening of the expanded refinery: