The Civil Aviation Authority of Singapore (CAAS) established SAFCo on 30 October 2025 to support Singapore’s objective of using sustainable aviation fuel in flights. The company was created following the passage of the Civil Aviation Authority of Singapore (Amendment) Bill, which granted CAAS authority to collect a sustainable aviation fuel levy and appoint a central procurement entity. Initial startup costs for SAFCo are fully funded by CAAS. The organisation is currently in the process of securing office premises. The establishment of SAFCo is part of a broader strategy to ensure a stable and affordable supply of sustainable aviation fuel for the national aviation sector.
SAFCo’s primary function includes managing the procurement of sustainable aviation fuel, with a focus on mitigating financial exposure due to market volatility. The approach to fuel procurement is designed to adapt to fluctuating prices, avoiding fixed commitments that could strain the aviation ecosystem. CAAS will implement a levy system to collect funds from passengers, which will support the procurement process. The target for sustainable aviation fuel usage is set at one per cent, though the actual proportion will be determined by prevailing fuel prices at the time of procurement.
The structure of SAFCo’s operations reflects a deliberate effort to manage risk in a nascent market. By not committing to a fixed volume of fuel regardless of price, the system aims to prevent financial overextension. The central procurement role assigned to SAFCo allows for coordinated action across the aviation sector. The system is intended to balance environmental goals with economic stability, ensuring that fuel procurement remains sustainable over time.