Mega airports in Dubai, Singapore set to increase jet fuel demand: IATA

The march to build “mega” airports in Dubai and Singapore to serve more than 100 million passengers per year will no doubt increase jet fuel demand, but the outlook for sustainable aviation fuel is more mixed, according to the chief economist of the International Air Transport Association.

Dubai’s plans to build the new Al Maktoum Airport and have a capacity of up to 260 million passengers a year within about a decade, five times bigger than current capacity, “confirms that this will be a boost to jet fuel demand in Dubai,” Marie Owens Thomsen said via email Sept. 10 in response to questions. Emirates National Oil, she noted, has announced a new jet fuel pipeline to Dubai Airports which will extend to Al Maktoum International Airport.

Tumbling crude oil prices have taken their toll on jet fuel. Platts, part of S&P Global Commodity Insights, assessed jet fuel FOB Singapore at $83.37/b on Sept. 10, the lowest since December 2021. The Persian Gulf jet fuel FOB assessment dropped to $80.49/b on Sept. 10, also the lowest since December 2021. Dated Brent dropped to $70.56/b on Sept. 10, also the lowest since December 2021.

Singapore’s plans to expand its Changi Airport to serve an additional 50 million passengers a year from 90 million currently will increase both jet fuel and SAF demand, she said. Construction on Terminal 5 is expected to begin in the first half of next year, Singapore’s Prime Minister Lawrence Wong said Sept. 6.

An increase in traditional jet fuel demand is expected in Singapore assuming current technologies and no technological breakthrough to allow 100% SAF when Singapore's Terminal 5 comes online, currently expected in mid 2030s, according to Thomsen, who also serves as IATA’s SVP of sustainability.

More demand for SAF is also expected from Singapore “because of the way the Singapore government has planned the SAF targets” that are supposed to be progressive, starting from 1% in 2026 to 3%-5% in 2030, she said.

Voluntary target

As for the UAE, “there are no specific news on how the production and use of SAF will grow alongside with the plans of the new airport,” Thomsen said. The UAE’s SAF roadmap announced in December 2023 includes a voluntary target of 1% of SAF fuel supplied to national airlines at UAE airports using locally produced SAF by 2031, she noted.

“By blending conventional aviation fuel with SAF, the UAE positions SAF as a crucial component of the fuel mix for the medium and long term and expects significant reduction in emissions from the aviation sector,” she said. The UAE is also focused on lower carbon aviation fuels as a “stop gap” to reduce carbon emissions as SAF production increases while new technologies may also start to take a bigger share of the carbon abatement landscape, she said.

“The UAE remains committed to carbon reduction goals and has taken a proactive role at the global stage,” she said, noting Dubai hosted in November last year both the third International Civil Aviation Organization conference on aviation and alternative fuels and COP28.