Why the World is Running Out of the Fuel Airlines Need Most

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0:00The future of flying may depend on used cooking

0:05oil. There's only one problem. The world can't produce enough of it.

0:10The airline industry hopes to slash emissions with sustainable aviation

0:15fuel or SAF. But the secret ingredient powering this fuel isn't rare or high tech.

0:22It's waste oil - collected from restaurant fryers

0:25and food factories. And demand for it is rising faster than the world can supply.

0:30Aviation accounts for around 2% of global CO2 emissions. And unlike cars or power grids,

0:36there is no battery solution that works for commercial flights at scale, yet.

0:42Used cooking oil is not derived from traditional fossil fuel and a supply chain is something that

0:48needs to be deliberately set up. The collections and the aggregations of used cooking oil is being

0:54done by smaller scale companies and maybe it's not so organized as well and therefore

0:59the foundation is very different in terms of how is it compared to a fossil fuel.

1:04Around 80% of all SAF today is made using a technology called HEFA, hydroprocessed

1:11esters and fatty acids, which uses hydrogen to strip away oxygen and impurities,

1:16transforming these waste fats into high performance fuel.

1:21This "fryer-to-flight" technology is no longer just a green experiment. It's now

1:26a regulatory must. As governments transition from gentle incentives to hard requirements.

1:32The UK and EU both launched mandates in 2025 that require airport suppliers

1:38to blend jet fuel with at least 2% SAF, but from there the requirements diverge.

1:45The UK's mandate jumps to 10% by 2030, nearly double the EU's 6% requirement that year.

1:52However, the EU SAF mandate accelerates in the following decades,

1:57hitting 34% by 2040 and a massive 70% by 2050,

2:03while the UK's rises to 22% in 2040 as part of its broader 'Net Zero' 2050 goal.

2:12Meanwhile, the US is using tax credits to chase a voluntary 3- billion-gallon

2:17production target by 2030, roughly equivalent to 10% of projected demand. The country's

2:24ultimate goal is to produce 35 billion gallons by 2050 to satisfy 100% of domestic demand.

2:32While SAF generally costs two to four times more than conventional jet fuel,

2:37high demand in mandated markets has pushed prices

2:40even higher with some airlines paying up to five times the price of fossil fuel.

2:46So in the short run definitely there's a limited supply of the SAF stock. So therefore the prices

2:54will be driven up. The mandate itself will not be sufficient to drive up the supply.

2:59You need more of the policy support to come into the supply side as well. For example, you

3:05need to de-risk the project so that will attract more suppliers to come in and join the market.

3:11So who is picking up the tab for this expensive fuel?

3:15We all consider three stakeholders, right, and government definitely could come in to bear

3:20some of the cost through the tax credit as well as the grants. And for airline

3:25companies usually they are operating in very thin margin and it is very difficult

3:30for them to bear this kind of cost. So passing through the prices is usually

3:35expected. I think the passengers will bear most of the cost in the competitive market.

3:39Governments are tackling the SAF challenge with different strategies.

3:43The UK has introduced a buyout price of £4.70 per liter, allowing airlines to pay a fee

3:51if they cannot source enough fuel - effectively turning the green mandate into a fossil-fuel tax.

3:57Meanwhile, Singapore is testing its own approach. Instead of a traditional mandate,

4:02it's shifting the cost directly to the traveler.

4:06Tickets sold from October for flights departing Singapore from 2027 will carry

4:11a mandatory SAF fee - that can be as low as S$1 Singapore dollar for a short

4:16hop to Bangkok or around S$10 Singapore dollars for an economy seat to New York.

4:21The fee can top $40 Singapore dollars for long-haul travelers in premium cabins.

4:27The levy is designed to meet a 1% SAF blend that scales to 3 to 5% by 2030.

4:34And to keep costs predictable and avoid the price volatility seen in European markets,

4:40a government-owned non-profit company will aggregate demand

4:44and centrally procure SAF using the levy funds.

4:48When you have the mandate, you are controlling for the volume. But when you have the levy,

4:52you are basically setting up the cost. So that means when the SAF price fluctuates,

4:58you may not know the exact quantity of the SAF that you purchase.

5:02So that is the major difference between the two types of policies. Definitely the price is going

5:07to be going upwards because there's a limited supply and then you have all this mandate,

5:12but in the medium and the long term because we want to see that there will be more policy

5:16support for the suppliers as well. So therefore we wish that the suppliers will also be able to

5:22come in and to expand the production capacity, so this will relieve the pressure for the prices.

5:29The bigger bet however is what comes after the cooking oil.

5:33In the United States, LanzaJet's ethanol-to-jet plant is now fully operating - a world first.

5:40DG Fuels' planned $4 billion facility is taking a different

5:44route - converting waste biomass into jet fuel using Fischer-Tropsch

5:49technology. It has already secured deals with Delta and Air France-KM.

5:54In Singapore, Aster is pursuing a similar shift.

5:58We are advancing our SAF via the two projects. The first one is

6:02with Aether fuels which we are using waste gas to convert into SAF. And in parallel,

6:08we have another project with Keppel when we are studying the viability of building

6:14an ethanol-to-jet plant on Jurong Island. So for both of the project we are taking

6:19a different approach on the feedstock, the other part of the difference is the technology

6:24pathway. So both project if materialized it will be the first of the kind in Asia.

6:30The mandates are tightening, the investment is moving,

6:33and the first plants are running. The only question is whether the

6:37world can scale sustainable fuels fast enough to make a difference.