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Response Speech by Senior Minister of State for Transport and National Development Ms Sun Xueling, at the Second Reading of the Civil Aviation Authority of Singapore (Amendment) Bill
14 Oct 2025In Parliament
1. Mr Speaker, I thank Honourable Members for their support of the Bill, as well as their comments and suggestions.
Singapore’s balanced and pragmatic approach
2. Ms Lee Hui Ying, Ms Gho Sze Kee, Mr Sharael Taha and Mr Yip Hon Weng asked about the impact of the SAF Levy on Singapore’s hub competitiveness.
a. Singapore has chosen a pragmatic and balanced approach. We are a council member of the International Civil Aviation Organization and are committed to working towards the ICAO’s Long-term aspirational goal of net zero carbon emissions for international aviation by 2050. Airlines and passengers fly through Changi Airport for various reasons, including safety, network, and connectivity. We will continue to keep a close watch on our charges and costs to ensure our air hub’s competitiveness.
b. With regards to SAF adoption, we have calibrated our approach to our circumstances, with safeguards to maintain the air hub’s competitiveness.
c. As international aviation moves towards decarbonisation, our modest 1% SAF target sends a firm demand signal to spur production and ecosystem development in Singapore. As a leading air hub, this lays the groundwork for Singapore’s broader SAF adoption in the future.
d. At the same time, with a fixed cost envelope approach, we can decide how much costs we want to bear and provide cost certainty for airlines and passengers. This ensures that our competitiveness is not adversely impacted.
e. We have also adopted a differentiated approach for transit and transfer passengers. I will elaborate on this later.
3. Mr Tan and Ms Poh Li San asked about adjustments to the SAF target and levy in the future if airlines voluntarily decarbonise or if SAF prices remain volatile. We will review Singapore's national SAF target and the SAF Levy periodically, taking into account global developments in SAF supply, prices, and the policies of other countries. To echo Mr Foo, Ms Goh, and Ms Poh, we will ensure Singapore remains aligned with international progress, while safeguarding our hub’s competitiveness.
SAF Levy
Differentiation of levy amounts across different user groups
4. Ms Lee, Ms Gho, Mr Taha, Mr Tan and Mr Yip have asked about further details on the design of the SAF Levy.
5. Should this Bill pass, CAAS will share more details on the SAF Levy and the implementation date by the end of this year.
a. The SAF Levy is designed to allocate the cost of meeting Singapore’s SAF target across different user groups – including passenger, cargo, and general or business aviation flights – based on their relative fuel consumption.
b. This approach ensures that the costs of SAF adoption are shared across all air transport users.
c. For passenger flights, we have earlier estimated the SAF Levy amounts for passengers on an economy class direct flight to be about $3, $6 and $16 for short-, medium- and long-haul flights respectively.
7. I would like to assure the House that the levy to be announced later this year is within what we have communicated earlier and is determined based on factors such as distance flown and cabin class. Stakeholders will be given sufficient lead time to prepare ahead of the implementation date.
Transit and transfer passengers
8. As Mr Yip has highlighted, transit and transfer passengers are a critical part of air traffic through Changi Airport.
a. Although they do not start or end their journeys in Singapore, transit and transfer passengers enhance Singapore’s connectivity by supporting a broader network of destinations and higher flight frequencies.
b. This strengthens Singapore’s position as a global aviation hub, which in turn benefits origin-destination passengers, particularly Singapore residents, by making flights more convenient and affordable.
c. As passengers may choose to transit or transfer through different hubs, we need to ensure that Changi remains competitive, so that they will continue to choose to transit or transfer through Changi. As such, there are currently no plans for passengers transiting or transferring through Changi Airport to incur the SAF Levy.
Providing cost certainty to users
9. Mr Dennis Tan had also asked about potential carbon leakage arising from the levy, and if airline operators may choose to operate elsewhere. Airlines choose where to operate based on a variety of factors, including safety, network, connectivity, and experience at various airports. In addition, other jurisdictions in the region are exploring and developing SAF policies and targets. Our differentiated approach towards transit and transfer passengers will avoid situations where such passengers choose to fly via other air hubs or airlines where there are no SAF policies in place.
10. Mr Taha and Mr Yip asked about how Singapore will manage the volatility of SAF prices to minimise disruption to airlines and consumers. Mr Cai Yinzhou also asked about the methodology used to calculate the SAF premium.
a. SAF Levy rates will be calculated based on the current 1% SAF target. However, within a fixed period, should the actual SAF premium fluctuate, the SAF Levy rates will remain fixed. This provides certainty to passengers and airlines. What then changes is the actual SAF uplift.
b. As the SAF market remains nascent, we will closely monitor SAF premiums and global developments, and review if adjustments to the SAF Levy are required in the longer run.
c. We will continue to prioritise providing cost certainty to passengers and businesses.
11. Ms Poh and Mr Cai asked about the decision to impose the levy on passengers instead of airlines.
a. To clarify, the SAF Levy is payable by persons that will be specified in the order, such as aircraft operators.
b. The levy payable is calculated based on, among other things, the ultimate user of the air transport service, such as the passengers or shippers.
c. Aircraft operators will be allowed to pass on the levy to the end users, such as passengers and shippers. To assure Mr Yip, if the levy is passed on to end users, the amount of the SAF Levy that each end user is paying must be reflected transparently.
Levy exemptions
12. Mr Yip asked about the exemption criteria for the SAF Levy.
a. The SAF Levy will apply to all flights departing from Singapore.
b. We nonetheless recognise that there are flights where the levy should not be payable, such as aircraft used for flight training and flights for charitable and humanitarian purposes. The types of flights that are excluded from the payment of SAF Levy will be specified in the order, similar to the approach taken for the Aviation Levy and Airport Development Levy.
Public consultations
13. Ms Poh asked for details on the public consultations done. CAAS has been engaging airlines and other industry partners closely on the SAF Levy framework since last year. Feedback has been constructive. CAAS will continue to do so as it firms up details for implementation.
Central procurement approach
14. Mr Cai, Mr Chia, Ms Lee, Ms Poh, Mr Taha, Mr Tan and Mr Yip asked for more details on the procurement of SAF, and our plans to strengthen production capabilities.
a. To support long-term supply resilience, Singapore’s 1% SAF uplift target is designed to send a clear and credible demand signal to the market. This will give producers the certainty to invest in production capacity and supply chains in Singapore and the region.
b. As a member of the international civil aviation community, Singapore is committed to ensure that the SAF procured complies with the requirements under ICAO’s Carbon Offsetting and Reduction for International Aviation, or CORSIA.
c. In line with Singapore’s Sustainable Jurong Island vision to manufacture sustainable products to help sectors decarbonise, EDB has been in discussions with existing energy majors on retrofitting existing refinery units, and new entrants for greenfield SAF production.
d. A*STAR and research institutes are also pre-investing in technologies that could be of use to advance biofuels production.
e. These are part of our efforts to build a sustainable and reliable SAF ecosystem, which should also result in more good jobs for Singaporeans
15. Should this Bill pass, CAAS will share more details on the central procurement of SAF and SAF environmental attributes subsequently.
Governance and reporting
16. To Mr Yip, Mr Tan and Mr Cai’s questions on governance and reporting requirements, the SAF Fund will be administered and managed by CAAS, with robust governance mechanisms in place to ensure transparency and accountability in the use of the Fund. These include regular reporting, independent audits, and outcome tracking against the national SAF target. CAAS will provide updates on the SAF Fund and SAF target in its annual financial statements and sustainability reports.
Alignment with international frameworks
17. Mr Chia and Mr Yip asked about how the Bill would work in tandem with international frameworks, such as CORSIA.
a. CORSIA is the world’s only global market-based measure for international aviation. The international aviation community reaffirmed its commitment to CORSIA at the recent ICAO Assembly last month.
b. Singapore is already complying with the monitoring, reporting and verification requirements under CORSIA.
c. When implemented, the SAF framework will further enable aircraft operators to comply with the requirements under CORSIA, such as by procuring SAF that is CORSIA-eligible.
d. Legislation such as this Bill, alongside others such as the Air Navigation (Carbon Emissions and Reporting) Regulations, will continue to support our sustainability plans.
Conclusion
18. Mr Speaker Sir, this Bill enables Singapore to take a meaningful step towards decarbonising aviation. It balances our environmental responsibility with pragmatism, providing the foundation for Singapore to grow as a sustainable air hub.
19. I thank Members for supporting this Bill, and I look forward to working closely with all stakeholders to implement this Bill effectively.
20. Mr Speaker Sir, I beg to move.
