Temasek-owned decarbonisation platform GenZero, alongside the World Economic Forum (WEF), has launched a new regional coalition to overcome sluggish demand for sustainable aviation fuel (SAF), in a bid to accelerate the decarbonisation of Asia’s rapidly growing aviation sector.
Announced on Monday at the GenZero Climate Summit 2025 held in Singapore, the Green Fuel Forward initiative brings together airlines, logistics providers and corporates to support the offtake of green jet fuel through the use of SAF credits, which each represent one metric tonne of SAF.
These credits can be purchased by entities outside of the aviation industry to offset their Scope 3 emissions, stemming from indirect value chain activities such as business travel and air freight, without having to directly procure the underlying green fuel product. This relatively novel asset class, which is traded and recorded using a “book and claim” system, is meant to open up a new revenue stream to bring down the costs of SAF and further scale its production.
“[SAF credits] can be very powerful in capitalising more demand,” GenZero’s chief executive Frederick Teo told Eco-Business. “If we make it cheaper, there will be more demand… With that kind of expanded demand, you give a signal to producers to invest in supply because they know there will be that kind of demand. That is the theory of change.”
“If corporates are prepared to offset some of their air travel emissions by buying and using SAF credits instead of just purchasing other kinds of credits, then the money we’re using to offset our Scope 3 is directly going into subsidising airlines and airports in purchasing SAF,” said Teo.
Aviation accounted for 2.5 per cent of global energy-related carbon emissions in 2023. While SAF is key towards decarbonising the sector, short of reducing air travel, one of the most significant barriers to its widespread production has been the substantial green premium airlines have to pay to make the switch from conventional jet fuel. In 2025, International Air Transport Association (IATA) estimates that SAF – which currently only accounts for 0.3 per cent of global jet fuel production – will cost about US$2,500 per tonne, or about 3.8 times the cost of traditional fuel.
The absence of uniform policies and mandates across the region has also resulted in fragmented demand among airlines, which have been more focused on ramping up flights post-pandemic. Unlike Europe, which mandates 2 per cent SAF usage for flights departing from the European Union and United Kingdom airports as of this year, the first compulsory use of SAF in Asia will only begin in 2026, when Singapore and Thailand enforce a 1 per cent mandate.
Teo praised Singapore’s SAF mandate model – which will be implemented through a levy on air tickets rather than a strict fuel blending mandate – as an innovative way of boosting demand for green jet fuel while shielding airlines and passengers from the price volatility associated with it.
Corporates who are willing to pay hundreds of dollars per tonne of carbon dioxide to offset their business travel emissions can therefore receive credits in return for subsidising SAF procured to reduce the Scope 1, or direct, emissions of airlines.
In 2022, GenZero, together with national carrier Singapore Airlines and the Civil Aviation Authority of Singapore (CAAS), piloted the sale of 1,000 SAF credits from a trial to procure SAF for the city-state’s airport. About two-thirds of the credits generated were sold to corporates and air cargo companies – which was less successful than expected.
“Demand wasn’t as strong, people were not too familiar with the product, and ultimately, because it was a more expensive product, there was no willingness [to invest in SAF],” said CAAS’ chief sustainability officer Daniel Ng at a conference last year.
16 organisations have joined GenZero’s new initiative, including Air New Zealand, Boeing, Climate Impact X, DBS Bank, DHL, International Energy Agency, Mizuho, Nete, Qantas Group, Singapore Airlines, Temasek and UOB. They will have the opportunity to undertake a test purchase of SAF and SAF credits by next year, GenZero stated in its joint press release with WEF.
There are currently no methodologies to generate SAF carbon credits, though Gold Standard has plans to develop one for fuel switching in aviation. The industry body Roundtable on Sustainable Biomaterials, which is also part of the new coalition, has also developed a book and claim system to ensure there is no double counting of credits.
Supply outpacing demand
While Southeast Asia is home to abundant feedstock resources, including used cooking oil, palm oil residues and municipal waste, the region’s biggest challenge lies in turning production capacity into actual consumption.
At least five new SAF facilities are set to come online in the Asia Pacific region within the next two years, threatening to outpace regional demand.
Air New Zealand, for instance, halved its SAF target for 2030 from to 10 per cent last year due to affordability concerns. SAF currently makes up only 1.6 per cent of its total fuel supply. Meanwhile, airline operators that are part of the Association of Asia Pacific Airlines, such as Singapore Airlines and Thai Airways, are cautiously pursuing a voluntary SAF usage goal of 5 per cent by the end of this decade.
This gap between where SAF is produced and where demand is located has led Asia to export over 370,000 tonnes of SAF in 2024, according to ship tracking data from Kpler – mostly from Finnish producer Neste’s Singapore refinery, the world’s largest production facility.
“The Asia-Pacific region has a unique opportunity to lead in sustainable aviation fuels, but unlocking this potential requires stronger demand signals,” said Teo. “By mobilising corporates and airlines, we can create the certainty needed to spur innovation, scale production, and make lower-emission flights a reality.”
