The Japanese government plans to subsidize purchases of sustainable aviation fuel (SAF) by domestic airlines. This would involve adding a surcharge of several tens of yen for all passengers, while requiring oil refiners and distributors to blend SAF into aviation fuel. The initiative draws on European examples to promote decarbonization in aviation.
The Japanese government is planning to support the adoption of sustainable aviation fuel (SAF) by subsidizing purchases made by domestic airlines. SAF, produced from feedstocks like used cooking oil, can cut carbon dioxide emissions by up to 80% compared to conventional crude oil-derived jet fuel. However, its procurement costs are two to three times higher, presenting a significant barrier to wider use.
Officials aim to outline a basic policy at an upcoming public-private council meeting, with revisions to the Airport Law in mind, targeting final details by fiscal 2026. The scheme would impose a surcharge of several tens of yen on all airline passengers to fund the subsidies, while mandating oil refiners and distributors to incorporate SAF into aviation fuel. This approach seeks to boost domestically produced SAF from both supply and demand sides.
Japan intends to draw lessons from international precedents. The European Union mandates SAF blending in airport fuels bloc-wide, with targets of 6% by 2030 and 70% by 2050. In Italy and the United Kingdom, subsidies come from airport user fees. The policy will also include strong support for capital investments by suppliers and collaboration with municipalities and collection firms to increase recovery of household used cooking oil.
As global regulations on aviation CO2 emissions tighten, SAF is viewed as essential for the industry's decarbonization. Projections indicate worldwide demand will reach 88 million kiloliters in 2030 and 650 million kiloliters in 2050.
