Singapore delays “green tax” for air tickets amidst Middle East conflict

In November 2025, the Civil Aviation Authority of Singapore (CAAS) announced the rates for its sustainable aviation fuel (SAF) levy — giving Singapore the dubious distinction of being the first country in the world to adopt such a measure.

First proposed in 2024, the levy would add between S$1 and S$41.60 to tickets originating from Singapore, on top of existing taxes and fees, with collection slated to begin on 1 April 2026.

However, with the recent spike in oil prices driven by the Middle East conflict, CAAS has decided to postpone the implementation by six months. The levy will now be collected for tickets booked from 1 October 2026, with departure dates from 1 January 2027 onwards. 

Singapore remains firmly committed to aviation decarbonisation. We are taking a pragmatic pause in view of the current situation.

-Han Kok Juan, CAAS Director-General

Despite its professed benevolent intentions, I’ve always been highly skeptical of the way in which the SAF is implemented, which shifts the costs of decarbonisation from companies to consumers — and Singapore residents in particular, as transit passengers through Changi are exempt (are the miles flown by transit passengers somehow less polluting?).

Singapore postpones SAF levy by six months

The CAAS has announced that the proposed SAF levy will now be collected on air tickets booked from 1 October 2026, for flights departing Singapore from 1 January 2027. 

To be clear, the levy will not apply to tickets sold before 1 October 2026, even if your flight departs on or after 1 January 2027. Therefore, it is possible to avoid the levy by locking in your travel plans early— though airlines typically only sell tickets one year in advance, so you’ll feel the impact sooner or later.

There is no change to the levy structure, which depends on two factors: destination and cabin. Destinations will be divided into four bands, with one charge for Premium Economy and Economy Class passengers, and another for First and Business Class passengers.

For flights with multiple stops, the levy will be calculated based on the immediate next destination after departing Singapore.

This, ironically, has the effect of penalising passengers who fly non-stop routes, which are more fuel-efficient than connecting flights. For example, a passenger who flies from SIN-HKG-SFO on Cathay Pacific would pay a lower levy (S$2.80/S$11.20) than one who flies from SIN-SFO on Singapore Airlines (S$10.40/S$41.60).

Should you book flights with stopovers then?

Since the SAF is calculated based on the immediate next destination, rather than final destination, could you save money by booking stopover flights instead?

Yes and no. While you might save on the SAF, those savings could be offset by the additional airport taxes incurred from a transit.

To illustrate, here’s the taxes and surcharges on Singapore Airlines’ two USA routes with non-stop and stopover options, based on current airport taxes and the new SAF levy.

In the case of Premium Economy and Economy travel, any savings on SAF from adding a stopover are more than offset by the higher airport taxes.

In First and Business, it’s slightly more complicated. For Singapore to New York JFK, the SAF savings would be offset by the cost of a stopover in Frankfurt, but for Singapore to Los Angeles, adding Tokyo Narita as a stopover does save you S$13.90 — though you also need to consider whether the savings are worth the time lost due to transit.

No levy for transit passengers

The SAF levy will not apply to passengers transiting through Singapore, who will escape the charge altogether.

On the one hand, the decision makes sense from a business point of view. Transit passengers make up more than a third of Changi’s total traffic, and imposing additional fees could weaken Singapore’s position as a major transit hub.

On the other, it feels distinctly unfair, almost as if Singapore residents have to subsidise transit passengers. Transit passengers already pay lower airport taxes, but you could argue that they don’t make use of the immigration or public area facilities (assuming they don’t exit the secure area). It’s much harder to make a similar argument here, because the fuel uplifted in Changi is for both transit and originating passengers.

Further increases to come

While travellers have been granted a temporary reprieve, what’s clear is that it’s only a matter of time before the SAF is implemented.

What’s more, even though CAAS has stated that the levy will remain fixed as long as the SAF target stays at 1%, it has also said that when the target is raised to 3-5%, as it is expected to by 2030, the levy amount will be “relooked”.

This is particularly bad for award tickets

The introduction of a S$1 to S$41.60 SAF levy does not necessarily mean that the cost of commercial tickets will increase by S$1 to S$41.60.

Instead, airlines may tweak their base fares to keep the overall cost of tickets competitive, thereby absorbing some of the levy. In other words, the burden of the levy will end up being split between the passenger and airline, depending on the extent to which the latter believes the former will be willing to absorb it. 

In the case of award tickets, however, it’s a completely different matter. The full burden of the levy will fall on the passenger, just like any other tax or surcharge.

Other fee hikes are coming soon

Unfortunately, the SAF levy is not the only fee hike on the horizon. Changi Airport previously announced plans to hike airline and passenger fees to finance a S$3 billion airport investment, which will be progressively implemented from 1 April 2027 onwards.

In short, the current fee of S$65.20 will be increased by 21% to S$79.20 by 2030.

Together with the SAF levy, a departing passenger could have to pay as much as S$120.80 by 2030!

Conclusion

Due to the ongoing conflict in the Middle East and its impact on oil prices, CAAS has delayed the implementation of its “green tax” SAF levy by six months. The levy will now be collected from 1 October 2026, for flights departing from 1 January 2027 onwards.

Otherwise, the specifics remain unchanged. Passengers can expect to pay up to S$41.60 more, depending on their cabin and destination, while transit passengers will continue to be exempt. 

That said, the situation is far from settled. If oil prices remain high, a further delay wouldn’t be surprising.