AIR travellers could face higher fares if Malaysia introduces a green levy to help fund the use of sustainable aviation fuel (SAF), with Malaysia Aviation Group (MAG) chief executive Captain Nasaruddin A. Bakar saying the option has not been ruled out.
Nasaruddin told the Associated Press (AP) that MAG was examining possible measures to manage SAF costs as airlines worldwide seek to cut carbon emissions amid limited supplies and prices significantly higher than conventional jet fuel.
“We are looking at all options. Consumers must be able to afford it, while airlines must also be able to afford it,” he said on the sidelines of an aviation sustainability conference today.
He said any decision to introduce a green levy rested with the government, while regulators, fuel suppliers and airlines needed to work together to make SAF more affordable.
Passing the full additional cost to passengers could make air travel less attractive, he warned, adding that airlines had limited room to absorb rising fuel expenses or increase fares.
Singapore is set to introduce the world's first mandatory government-imposed green levy on air travel in January 2027, with rates varying according to destination and cabin class.
The push for cleaner aviation fuel comes as the International Energy Agency estimates that aviation accounts for about 2.5 per cent of global carbon emissions annually.
The United Nations-backed International Civil Aviation Organisation has set a target of net-zero carbon emissions by 2050, with SAF identified as a key means of reducing the industry's environmental impact.
SAF can potentially cut aviation emissions by about 65 per cent, according to ICAO. Produced from renewable materials such as used cooking oil, waste fats and agricultural residues, it can be blended with conventional jet fuel and used in existing aircraft.
However, high production costs, limited manufacturing capacity and constraints on sustainable feedstock have slowed wider adoption. The International Air Transport Association estimates that SAF currently accounts for less than one per cent of global jet fuel consumption.
Nasaruddin said MAG would focus on fleet modernisation and SAF use as part of its emissions-reduction efforts. Malaysia Airlines has orders for 40 Airbus A330neo aircraft and 55 Boeing 737 MAX aircraft.
The group is also contending with higher conventional jet fuel prices amid the Iran war, limiting its ability to pass increased operating costs on to passengers.
He said the same principle applied to SAF, with the extent of any cost passed on to travellers depending on how expensive the fuel became.
“If the cost is not too high, perhaps some of it can be passed on to passengers. If the cost is too high, we will not be able to do so,” he said.
Nasaruddin also did not rule out further increases in airfares. - October 20, 2026
