Singapore's sustainable aviation fuel opportunity
A recent announcement means that flights from Singapore will need to adopt a blend of sustainable aviation fuels at increasing amounts, reaching up to 5% by 2030. Given the demand for sustainable aviation fuel, how can energy companies capitalise?
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 clean hydrogen, used 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:
Our experience in exploring SAF pathways
Arup has experience with these SAF pathways, and our team understands the market, technical and regulatory challenges organisations face.
Working with Elyse Energy, as part of a due diligence for investors, we reviewed how the Fischer-Tropsch with gasification pathway could be used in the organisation’s BioTJet projects. Similarly, we investigated the Fischer-Tropsch (power-to-liquids) pathway when reviewing the technical and market opportunities for a European fund considering investing in a Nordic SAF producer.
For an organisation in Western Europe, we investigated the costs, land area and market implications of implementing a HEFA production plant.
Through our involvement in due diligence and expert witness roles in the waste management sector, our technical and commercial specialists are familiar with the risks of and opportunities for the gasification of municipal solid waste and sustainable biomass plants – a process used in multiple SAF pathways.
We have also compared the pros and cons of the various pathways for airlines, project developers, investors, and NGOs around the world to help them identify investment opportunities in their markets.
Get in touch with us
For Singapore and other countries committed to sustainable aviation and exploring SAF production opportunities, our team is equipped and available to help organisations evaluate the right pathways to develop projects and invest in this growing market opportunity.
