Singapore sets up SAFCo to centralize sustainable aviation fuel purchases
Singapore’s Civil Aviation Authority has created a new entity, the Singapore Sustainable Aviation Fuel Company, or SAFCo, to centralize procurement of sustainable aviation fuel and secure a more stable supply for the country and the region. The announcement, made on Oct. 30, 2025, marks a formal step in Singapore’s effort to build a market for cleaner aviation fuel.
The evidence packet says SAFCo will support Singapore’s target of making sustainable aviation fuel account for 1% of all jet fuel used at Changi and Seletar airports in 2026, rising to 3% to 5% by 2030. That gives the new company a clear policy role: it is not a symbolic body, but an operational tool for carrying out the national fuel plan.
CAAS said SAFCo will aggregate demand from airlines, fuel producers and carbon-market platforms. The point of that approach is scale. By buying more fuel through a central mechanism, the authority hopes to send a stronger demand signal to producers and reduce the price gap that has kept sustainable aviation fuel far more expensive than conventional jet fuel.
The packet says CAAS estimated last year that sustainable aviation fuel costs around three to five times more than conventional jet fuel. That cost gap explains why procurement design matters. SAFCo is intended to help manage volatility, negotiate larger contracts and create a more predictable route to supply than individual airlines could achieve on their own.
The new company will be led by Tan Seow Hui, formerly global head of marketing and sustainability at Shell Low Carbon Solutions. CAAS director-general Han Kok Juan, who will chair SAFCo, said the company would operate through a transparent, competitive tender process involving suppliers that meet international sustainability standards.
The financing model is also important. The packet says initial startup costs will be fully funded by CAAS, while a future levy on passengers will feed a fund used to buy sustainable aviation fuel. Preliminary CAAS estimates suggested that economy passengers could pay an additional S$3 on short-haul flights, S$6 on medium-haul flights and S$16 on long-haul flights, although the final levy structure is still being finalized.
That levy mechanism turns the policy into something broader than a procurement exercise. It links passenger travel directly to the funding of lower-carbon fuel and gives the government a way to spread costs across the aviation system rather than leaving them entirely to individual carriers.
The evidence packet also says SAFCo expects to hire about 10 staff in its first year, with headcount to be reviewed later, and that it has begun engaging airlines and businesses interested in the mechanism. Those details suggest the company is still in an early build-out phase, but already moving from policy design into implementation.
The central takeaway is that Singapore has converted its sustainable fuel ambition into a dedicated buying vehicle. SAFCo is meant to make the target easier to reach, not by pretending sustainable aviation fuel is cheap, but by creating the scale and structure needed to buy it at all.
*Event date: 2025-10-31.*
