Opening Keynote Address by Minister for Transport and Second Minister for Finance, Mr Chee Hong Tat, at the Changi Aviation Summit 2024

Honourable Ministers,

Mr Salvatore Sciacchitano, President of the Council of ICAO,

Distinguished Guests,

Ladies and Gentlemen,

1.     Good morning to all of you. Welcome to the Changi Aviation Summit. To our guests from overseas, a warm welcome to Singapore.

The outlook for aviation

2.     We had our inaugural Changi Aviation Summit two years ago in 2022, when the global aviation sector had just started its recovery from the COVID-19 pandemic. This time round, the skies above us are brighter and busier. Air travel has bounced back strongly, and global air passenger volumes continue to climb.

3.     With a growing middle class in the Asia-Pacific and other regions, the prospects for aviation remain bright, as more people aspire to fly for both work and leisure. In particular, we expect to see the fastest growth in passenger traffic in the Asia-Pacific region over the next two decades, making up more than half of global passenger demand by 2040.

4.     With opportunities abound, we must work in close partnership as a sector to support the growth, and allow our companies and people to benefit from it. The operating environment for aviation is getting more complex, with significant geopolitical shifts and technological disruptions. We must also consider our sector’s carbon footprint, and adopt a balanced approach that ensures aviation’s continued growth goes hand in hand with our efforts to reduce carbon emissions. 

5.     We want more flights and more travellers, but we cannot achieve these outcomes in a sustainable manner without lowering our carbon emissions.

6.     This morning, I would like to touch on three areas of investments that will help to prepare us for the future. First, investing in our people; second, investing in innovation; and third, investing in a sustainable aviation future.  

Investing in people 

7.     First, investing in people. In an increasingly complex and uncertain world, people remain our most valuable asset. Investing in building our workforce’s capabilities and upskilling our workers must remain a core priority, so that our workers can remain relevant as the sector transforms, and when new business models and technologies emerge.
 
8.     We cannot stop technological advancements and business transformation, or try to build walls to shield our people from these driving forces. A better response is for the government to work with employers and unions through our tripartite partnerships, to anticipate these changes ahead of time so that we can take steps to prepare our companies and workers.  
 
9.     Last night, I announced the transformation of the Singapore Aviation Academy (SAA). The SAA is the training arm of the Civil Aviation Authority of Singapore (CAAS) and offers internationally-recognised training programmes in various disciplines. Its enhancement, which includes refreshing its curriculum and facilities, will allow SAA to meet the evolving needs of the aviation sector. 

10.    I also had the honour of signing two MOUs between Singapore and ICAO with President Sciacchitano, on the Singapore-ICAO Next Generation Aviation Professionals Scholarship Programme, and a refreshed ICAO-SAA Directors-General Programme on Aviation Safety. 
11.    The first is targeted at young aviation professionals from around the world, while the second is targeted at new Director-Generals to be better equipped for their new role and to allow them to form professional networks, so that they could lead their organisations and aviation sectors to greater heights.  

12.    Singapore has been a strong supporter of ICAO’s efforts in capacity-building for the next generation of aviation professionals. As we celebrate the 80th year of the Convention on International Civil Aviation – or more widely known as the Chicago Convention – we are pleased to continue with our efforts, to work with ICAO and other global partners to support the training and development of aviation professionals globally, to strengthen our ability to manage new and emerging challenges, and to make aviation more inclusive. 

13.    Our investment in SAA and continued partnership with ICAO underscore the importance of developing the next generation of aviation professionals, to support not just the Singapore air hub, but also the growth of international aviation.

Investing in innovation 

14.    Second, investing in innovation. A future-ready aviation sector will require a strong focus on innovation. This is key for us to seize opportunities in new growth areas and overcome resource constraints, such as land, airspace, manpower and carbon. 

15.    The development and deployment of technology in aviation is costly and takes time, given our complex and safety-critical operating environment. Hence, it is even more important to forge close partnerships between the public and private sectors, to pool expertise and resources to drive innovation in a concerted manner.  

16.    Singapore is committed to working with the international aviation community to tackle our common global challenges. In this regard, CAAS has recently set up the International Centre for Aviation Innovation (ICAI) to facilitate the development of aviation technologies and to accelerate their adoption. 

17.    The scope of the ICAI is global, extending beyond Singapore.  We envision the Centre to partner with governments, international organisations, industry and research institutes around the world to co-develop solutions for the aviation sector. The ICAI will focus on translating research to deployment, as well as building capabilities in key aviation domains, to meet rising demand for air travel in a sustainable manner. 

18.    Singapore would like to extend an invitation to all like-minded countries, as well as our industry and research partners from around the world, to come onboard and co-create these innovative solutions with the ICAI. This includes having your staff serve on the ICAI’s advisory and technical panels, or undertake joint projects with the Centre. In the process, we can actively cross-pollinate ideas and leverage one another’s strengths to turn these ideas into actionable solutions; solutions that can benefit the wider aviation community.

19.    We look forward to working with more partners to build a dynamic and vibrant aviation system serving the region and beyond. 

Investing in sustainability

20.    Third, investing in a sustainable aviation future. Sustainability will be central to the future of aviation. ICAO has adopted a long-term aspirational goal of achieving net zero carbon emissions for international aviation by 2050. At the Third ICAO Conference on Aviation and Alternative Fuels last year, ICAO and its Member States agreed to a collective global aspirational vision to reduce international aviation emissions by 5 per cent by 2030, through the use of cleaner fuels. This sets a clear pathway for the aviation sector. 

21.    Recognising the importance of advancing our collective sustainability efforts, Singapore has been collaborating with other States, particularly in our region. During Singapore’s two-year chairmanship of the ASEAN Air Transport Working Group in 2022 and 2023, we worked with our ASEAN partners to develop an ASEAN Sustainable Aviation Action Plan (ASAAP) – a 10-year action plan to drive sustainable aviation growth in ASEAN. Many of our ASEAN partners are here today. We look forward to continue working closely with all of you to deliver the outcomes of the ASAAP and explore further areas of cooperation. 

22.    Singapore is also committed to realising our net-zero emissions target by 2050. Our approach is to enable the aviation sector to grow and achieve environmental sustainability concurrently – not choosing one or the other but we want both – so that future generations can continue to enjoy the benefits of flying. We do not see growth and sustainability as mutually exclusive goals; we believe we can achieve both via sustainable growth.  

23.    Aviation is a key enabler for the global economy, connecting businesses and people – it brings the world closer together. Hence, the future of aviation must continue to be a story of growth, balanced with sustainability. Good for people, good for businesses, good for the environment.   

Launch of Singapore Sustainable Air Hub Blueprint

24.    I am therefore pleased to launch the Singapore Sustainable Air Hub Blueprint today. The Blueprint outlines Singapore’s medium- and long-term goals for both international and domestic aviation sector emissions. It lays out concrete steps that Singapore will take, in close partnership with our stakeholders, to develop a sustainable aviation future across three domains: airport, airline and air traffic management.

25.    The Blueprint incorporates the recommendations of the International Advisory Panel (IAP) on Sustainable Air Hub that were published in September 2022. I had the opportunity to meet with our IAP members yesterday to express my appreciation for their valuable contributions and insights that helped shape our approach. 

26.    We have also consulted extensively with domestic and international stakeholders on the targets and initiatives in the Blueprint, to ensure that we take a balanced and practical approach with industry support. 

27.    CAAS will release more details on our targets and initiatives in the full publication of the Blueprint. Let me share some key highlights.

28.    On the domestic front, our target by 2030 is to reduce 20% of emissions that arise from operations within our airports compared to 2019 levels. And to achieve net zero domestic emissions by 2050. We will achieve these goals by reducing energy use and deploying renewable energy in our airports. The new Terminal 5 at Changi Airport, which will be ready in the mid-2030s, will be designed to be a Super Low Energy Building. 

29.    We also aim to achieve net zero international emissions by 2050. We will undertake air traffic management initiatives and work with other Air Navigation Service Providers in the region to increase air traffic efficiency and reduce aircraft fuel burn over the next five years, such as through advanced demand-capacity balancing and performance-based navigation enhancements. These are win-win solutions for the environment, airlines and passengers.

30.    To achieve net zero by 2050, the use of sustainable aviation fuel (SAF) will be critical. SAF is expected to contribute around two-thirds of the carbon emission reduction needed to achieve net zero by 2050. But the current price of SAF is about 3 to 5 times more expensive than conventional jet fuel. It will hurt our air hub and our economy, and raise the cost of travel for passengers, if we are overly ambitious with our sustainability goals. We need to balance sustainability and competitiveness to support the long-term growth of our air hub in the coming decades, while reducing carbon emissions and creating the conditions for our journey towards net-zero by 2050.

31.    To kickstart SAF adoption in Singapore, we will require flights departing Singapore to use SAF from 2026. We will target a 1% SAF uplift in 2026. We have consulted key stakeholders and assess that the cost impact of the 1% target is manageable. This will provide an important demand signal to fuel producers and give them the incentive to invest in new SAF production facilities. Without an increase in supply, we will not be able to scale up the adoption of SAF in the years ahead.  
 
32.    Our goal is to gradually raise the SAF target from 1% in 2026, to between 3% and 5% by 2030. We will monitor global developments and the wider availability and adoption of SAF in the next few years, before deciding on the SAF target beyond 2026. In making the decision, we will aim to strike a balance between economic competitiveness and environmental sustainability, to achieve our objective of having sustainable growth.

33.    As the current SAF supply is limited and the price of SAF is volatile, Singapore will introduce a SAF levy to provide cost certainty to airlines and travellers. The levy will be set at a fixed quantum, based on the SAF target and projected SAF price at that time. For example, the quantum of the SAF levy in 2026 will be set based on the volume of SAF needed to achieve a 1% SAF target and the projected SAF price in 2026. The amount collected through the SAF levy will be used to purchase SAF, based on the actual price of SAF at the time of purchase. 

34.    What this means is whether we are able to meet, or exceed, our SAF target will be based on how much SAF can be purchased with the SAF levy at the prevailing SAF price. If the supply increases and prices come down, which I hope so, we could go beyond our set target. Conversely, if SAF prices shoot up and exceed projected levels, we would purchase less than our set target. But in both scenarios, the cost impact on travellers will be the same as the SAF levy remains unchanged.   

35.    The SAF levy for different travellers will vary based on factors such as distance travelled and class of travel. To illustrate, we estimate that the levy to support a 1% SAF uplift in 2026 could increase ticket price for an economy class passenger on a direct flight from Singapore to Bangkok by around S$3, and by around S$16 from Singapore to London. Passengers in premium classes will pay higher levies.  
 
36.    CAAS will continue to review the implementation of the SAF levy further in close consultation with stakeholders, before announcing more details in 2025. We will provide sufficient lead-time for industry and travellers before the SAF levy takes effect in 2026.

Conclusion

37.    As we emerge from the crisis of a generation, the aviation community must prepare ourselves for the future. To capitalise on the opportunities ahead, we must come together to invest in people, innovation, and sustainability initiatives, so that global aviation can continue to soar.  

38.    I am happy to share that Singapore will be deepening our collaboration with other States and the industry through eight agreements that will be signed this week. These will cover various avenues of cooperation, including air services, aviation safety, training and advanced air mobility. As an international air hub, Singapore is committed to working with different partners and aviation organisations to build an aviation system for the future.    

39.    Thank you for joining us on this journey. I wish all of you a fruitful Changi Aviation Summit, and to our guests from overseas, please enjoy your stay in Singapore.