SINGAPORE - Rules mandating the use of sustainable aviation fuel (SAF) for flights departing from Singapore could be on the cards, as a blueprint that will set carbon emission reduction goals for the aviation sector here takes shape.

Transport Minister S. Iswaran said on Monday that the Civil Aviation Authority of Singapore (CAAS) is studying whether to introduce policies such as SAF mandates and incentives as part of the Singapore Sustainable Air Hub Blueprint, which is due to be published in 2023.

These policies, which have been implemented in Europe and the United States, are aimed at providing more certainty about the long-term demand for SAF and improving the business case for it, Mr Iswaran added.

SAF, which is made from waste materials such as used cooking oil, animal fats and other residues, has been touted as the most promising near-term solution to reduce carbon emissions generated by the aviation sector, but it costs three to five times that of regular jet fuel.

Speaking at the inaugural Sustainable Aviation Fuels Investment Summit in Detroit, the minister warned against “feedstock nationalism”, referring to countries restricting the export of raw materials that are used to produce SAF to protect domestic industries.

This comes as countries around the world are developing their own SAF targets and plans to scale up its use.

He said: “If the flow of biomass is restricted by countries, the supply of SAF will be further constrained.”

Mr Iswaran joined the SAF summit as part of an official visit to the US.

The minister was in Detroit to attend the three-day 11th Asia-Pacific Economic Cooperation Transportation Ministerial Meeting that began Monday.

There, he met his counterparts from various countries, including US transportation secretary Pete Buttigieg and China’s vice-minister of transport Wang Gang.

At the SAF summit, Mr Iswaran highlighted developing supply chains and strengthening international and industry collaboration as key ways to scale up the adoption of green jet fuel.

He said Singapore is working closely with international and regional organisations to study how Asean can tap potential SAF feedstock within the region.

While he did not directly mention the use of palm oil in the production of SAF – a practice that has drawn criticism from environmental groups – Mr Iswaran said that there are some abundant SAF feedstock in Asia-Pacific region that may not be as widely accepted in certain parts of the world due to perceived higher environmental risks.

“We think it is most important to establish a scientifically driven process to validate the sustainability of feedstock,” he added.

Mr Iswaran also highlighted the importance of supporting research and development into more nascent SAF production technologies, such as power-to-liquid technology. This process uses renewable energy to combine hydrogen molecules with carbon extracted from the atmosphere or industrial waste gas to produce synthetic jet fuel.

In addition, the minister called for policies on SAF use and accounting to be harmonised and for a mutually recognised set of common standards, citing the “aviation green lanes” that Singapore is seeking to develop with the United States, Japan, and New Zealand as an example.

“If we do not have that, then we really will have a patchwork of solutions around the world... For airlines and industry players, I think this is going to be a challenge,” Mr Iswaran said.

The minister also pointed out the need to work closely with the industry, given that SAF production is still a relatively new field.

In this respect, he gave the example of Finnish energy giant Neste and its expanded refinery in Singapore, which has the capacity to produce up to a million tonnes of SAF per year.

“This is a significant move – by no means sufficient, but definitely necessary,” Mr Iswaran said.

Mr Sami Jauhiainen, Neste’s acting executive vice-president for renewable aviation, told The Straits Times that Singapore is now the company’s biggest SAF production hub.

While scaling up production has benefits in terms of efficiency, Mr Jauhiainen said it is hard to see the price of SAF falling to the same level as conventional fossil fuels.

“The technology we use is not really new. We have already been working on it for quite a long time, and our engineers have been exploring how to get the most out of it for a while, so I don’t think the cost difference is likely to disappear,” he told ST.

This means that the increased costs of SAF will need to be passed on to passengers, but this is where government regulations can play a key role, he added.

Mr Jauhiainen said mandates on SAF use will create a level playing field for all airlines, while incentives will be able to help push passengers and companies to voluntarily pay for the additional costs in the early stages of adoption.

He noted that the current targets for SAF use set by the European Union, as well as countries like Japan, Britain and the US, are modest – between 6 and 10 per cent by 2030.

“If you take those percentages into account, and you take into account that jet fuel is 20 to 30 per cent of an airline’s cost, if we start ramping up SAF use in this decade, the reality is that on a ticket-level, it is still not going to be more than a coffee or sandwich for the passenger,” Mr Jauhiainen said.

A PwC analysis in 2022 estimated that the adoption of SAF from 2025 to 2050 is likely to lead to around a US$10 to US$17 (S$13 to S$23) increase in economy-class fares for typical long-haul flights such as those between Munich and New York.

“No one is suggesting the aviation industry transition to be fully sustainable overnight. The reality is that planes will not be flying with 100 per cent or 50 per cent SAF immediately. This will need to be a gradual pathway,” Mr Jauhiainen added.

Mr Marcel Fujike, global head of products and development for air logistics at Swiss transport and logistics giant Kuehne + Nagel, noted that there are currently limited subsidies or support packages available to aid airlines in the transition towards SAF in Asia.

The company was among the early adopters of SAF, having procured about 7 per cent of global SAF production in 2022.

Mr Fujike said Singapore and Asia are behind Europe and North America when it comes to the availability and production of SAF, but there are encouraging signs, including the Neste’s expansion in Singapore.

The main challenges to mass adoption of SAF in the logistics and shipping sector are the lack of knowledge about the subject, a lack of clear standards, the cost and limited supply, he said.

But he added: “There is an interest in SAF at most airports and airlines in South-east Asia, and we are encountering more requests for advice and partnerships.”