Malaysia Airports Studies Green Levy to Fund Sustainable Aviation Fuel

Malaysia Airports Group (MAG) is considering introducing a green tax on passengers as a mechanism to absorb the premium costs associated with sustainable aviation fuel (SAF), according to the company's president and group chief executive Nasaruddin Bakar.

The proposal comes as airlines worldwide grapple with the significantly higher expense of SAF compared to conventional jet fuel, presenting a challenge to the aviation industry's decarbonization goals. MAG's exploration of a passenger levy represents one approach to sharing these costs across stakeholders.

Nasaruddin emphasized that addressing the cost differential requires collaborative action involving multiple parties. Regulators, fuel suppliers, and airlines must work together to develop solutions that make sustainable fuel economically viable without placing the entire burden on any single entity, he stated.

The initiative reflects broader industry efforts across Asia-Pacific to transition toward greener aviation practices while maintaining competitiveness. Malaysia, as a major aviation hub, has positioned itself as a proponent of sustainable practices in the sector.

The aviation industry globally has committed to achieving net-zero emissions by 2050, with SAF identified as a critical component of this transition. However, the technology's current cost premium remains a significant barrier to widespread adoption across the region's airlines.