Singapore recently announced that all flights from Singapore will need to blend one per cent sustainable aviation fuel (SAF) from 2026, increasing to three to five per cent by 2030. Currently, SAF is the only credible solution for decarbonising international aviation, and the global demand for it will outstrip supply for the next few years. Considering the huge volumes of SAF that will be required, there is a significant opportunity for energy infrastructure companies to capitalise on this rapidly expanding market.
Singapore’s SAF mandate is one of the first steps in its aim to achieve net zero aviation emissions by 2050 – a commitment shared by Singapore Airlines Group, which in 2022-2023 consumed more than five Olympic-sized swimming pools worth of kerosene each day. In its Sustainable Air Hub Blueprint, the Singapore Aviation Authority estimates that 65 per cent of the aviation sector’s greenhouse gas emission reductions will be achieved with SAF by 2050. The city state is not alone in setting policy to increase SAF uptake. Across the world, governments have established investment incentives and blending mandates to increase the use of SAF. Although SAF costs more than conventional jet fuel, demand will be driven by these policies, supported by voluntary decarbonisation commitments from airlines. These trends mean that the global demand for SAF in 2030 is expected to be about twenty times higher than it is now.
There is clearly an opportunity for companies (and not just the oil majors) that know how to develop energy supply projects to capitalise on this growing market. Supported by abundant sustainable resources, Southeast Asia is ideally placed to establish SAF production plants.
What is sustainable aviation fuel?
Whereas traditional jet fuel is derived from crude oil, SAF can be made from a variety of sustainable feedstocks such as cooking oil, animal fat, agricultural waste and algae. Today only a small amount of SAF is produced globally; it must be blended with traditional jet fuels and make up 50 per cent or less of the fuel mixture. In the future, to transition to a net zero world, we will need to produce vast quantities.
What is the SAF opportunity in Singapore?
To produce SAF in large quantities in the future, it will take multiple technologies, sustainable resources, expertise, and ambitious targets. Singapore is uniquely positioned to invest in this rapidly emerging market. A recently expanded biorefinery in Singapore is one of the largest SAF production facilities in the world. But even with this plant operating at full capacity, it can only supply less than a quarter of Singapore Airlines Group’s fuel needs.
By investing in the right projects and leveraging its expertise in the renewable energy and process engineering sectors, Singapore has a significant opportunity to capitalise on this market.
Pathways to produce SAF
There are multiple ways to make SAF. The International Civil Aviation Organisation (ICAO) has set sustainability criteria for production methods to qualify as SAF, having approved 11 pathways and is investigating 11 more.
Arup’s projects have focussed on the five pathways which have the most impact on decarbonisation – those that can be blended with traditional fuels up to 50 per cent now and some with the potential for higher proportions in the future. The figure below summarises these five pathways: