Airline Sector Falling Behind On Clean Fuel Switch

The airline industry’s green transition is stalling as high costs and limited output choke the rollout of cleaner jet fuel, the head of the industry’s trade association said on Monday.

“Unfortunately, we’re not making sufficient progress on sustainable aviation fuel,” International Air Transport Association (IATA) director-general Willie Walsh told the Changi Aviation Summit in Singapore.

Sustainable aviation fuel (SAF) is billed as a key tool to curb carbon emissions from planes and took centre stage at the conference ahead of the Singapore Airshow.

“SAF output reached 1.9 million tonnes in 2025, representing just 0.6 per cent of total jet fuel consumption, and this is a downward revision from our earlier estimates,” Walsh said.

Mandatory rules requiring airlines to include a certain percentage of SAF in their fuel mix “have pushed prices higher” and “discouraged voluntary demand,” he added.

European Union rules, for example, require carriers to include two per cent of SAF in their fuel mix starting this year, rising to six per cent in 2030 and 20 per cent in 2035, before soaring to 70 per cent from 2050.

Walsh said that SAF prices exceeded fossil-based jet fuel “by a factor of more than two, while the evidence shows that in markets with mandates, that factor can increase to four times.”

To bolster take-up, Singapore’s civil aviation authority signed an agreement on Monday with nine companies for a “voluntary trial” to buy SAF through a central procurement firm set up by the regulator.

The trial, which includes Google, state investment firm Temasek, and Singapore Airlines, will support Singapore’s aim to increasingly favour green jet fuel.

From October 1, Singapore will require all flights departing from the city-state to use one per cent of the more expensive SAF in their fuel mix and will collect a levy to finance that, likely raising ticket prices.

Singapore said it will increase the ratio of SAF in the blend to three to five per cent by 2030 in line with targets set by the International Civil Aviation Organization (ICAO).

AFP

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