Singapore delays SAF levy for air cargo

Singapore's aviation regulator has postponed a new environmental charge for air cargo shipments. The Civil Aviation Authority of Singapore announced a one-year delay, meaning the sustainable aviation fuel levy will apply to services sold from 1 October 2027 for flights departing Singapore from 1 January 2028.

CAAS Director-General Han Kok Juan stated the authority has worked with airlines and global partners to establish systems for levy collection and management. He said the goal is to lay a foundation for Singapore to serve as a trusted hub for SAF-related economic activities in the region.

Reason for the deferral

CAAS explained that cargo services involve a broader and more complex range of stakeholders than passenger operations. The sector includes carriers, express operators, forwarders, and shippers operating under varying commercial arrangements. Following talks with the industry, the authority concluded that implementing the levy as originally planned would be problematic.

It has agreed to work with the industry to develop and implement a strong collection mechanism. The original plan was for the levy to start next month for flights departing 1 January 2027.

Industry reaction

Airfreight stakeholders have welcomed the decision. Gabriel Lam, chair of the Singaporean air cargo agents association SAAA@Singapore, told The Loadstar that a 'one size fits all' approach for passenger and cargo did not make sense. He argued that applying the passenger system to the more diffuse airfreight sector would cause inconsistencies and unsustainable cost spikes.

Lam said the extra time will let companies plan for the levy's implementation and clearly communicate upcoming costs to their customers. He described this as a more measured and sustainable transition.

Broader support for SAF mandates

A spokesperson for logistics firm Kuehne+Nagel expressed support for mandates that drive greater adoption of sustainable aviation fuel and give producers confidence to invest. While not commenting directly on Singapore's delay, the spokesperson noted such mandates are being introduced at different speeds and through different mechanisms globally.

Another industry source told The Loadstar the issue of SAF and levies is somewhat contentious but should be supported. The source declined to comment publicly, noting a reluctance from others to do so as well. Meanwhile, CAAS confirmed it is still rolling out its planned SAF levy for passenger services as scheduled.