Phl eyes SAF hub, 1% mandate by 2030

The Philippines is seeking to become a sustainable aviation fuel (SAF) production hub while considering a 1-percent blending mandate by 2030 to create a domestic market and attract investment.

Energy Secretary Sharon S. Garin said during the ASEAN Energy Business Forum on Tuesday that the government is developing the policy and regulatory framework for local SAF production, supported by a national feasibility study and the inclusion of SAF as a strategic industry under the 2026 Strategic Investment Priority Plan.

“The Philippines is putting this ambition into national action. We are building the policy and regulatory foundations, supported by a national feasibility study and by SAF’s place as a strategic industry in the Philippines 2026 Strategic Investment Priority Plan,” Garin said.

“With industry and international partners, we will draw on our agricultural and biomass resources to attract investment, build sustainable supply chains, and advance aviation decarbonization, energy security, and economic growth,” she added.

SAF, a sustainable alternative to fossil fuel-based aviation fuel, can be produced from plant-based feedstock such as forestry and agricultural waste, as well as used vegetable oils.

Energy Undersecretary Alessandro Sales said the National Biofuels Board is discussing a SAF mandate to provide producers with a guaranteed market and encourage investment in local production.

“The recommendation is to have a 1 percent SAF mix or mandate by 2030. This allows enough time before the mandate takes effect to develop local supply over the next three to four years,” Sales said.

The proposed mandate would address two major hurdles to SAF development: its high cost and insufficient demand to support investment in production facilities.

“If I set up a facility and cannot sell the product because the price is high, why would I do it? The workaround is to set a 1% or 2% mandate and guarantee a market,” Sales said.

“The facility can then be established. Eventually, costs will decline to a more competitive level. That is the roadmap we want to follow,” he added.

The initial target will depend on feedstock availability and investor interest. The SAF committee under the National Biofuels Board is led by the Civil Aviation Authority of the Philippines.

The government has yet to estimate the investment required to establish local SAF production as it would depend partly on plant location and feedstock transportation expenses.

Sales, however, admitted that SAF adoption could also increase airline costs. He noted that SAF currently costs an estimated three to four times more than conventional aviation fuel, although starting with a 1-percent blend would limit the initial impact.

“It depends on the blend. SAF remains more expensive, and that is the reality. Estimates show it costs three to four times more than fossil fuel. However, starting with only a 1-percent blend would minimize the impact,” Sales said when asked about the potential effect on airfares.

He said increasing production could eventually lower SAF prices as producers achieve greater economies of scale.

“The main priority is to increase production so prices can come down,” Sales said.

Garin said ASEAN has the potential to become a SAF production center because of its feedstock resources, manufacturing capabilities, and location along major international aviation routes.

The government is also considering SAF as an energy security measure, particularly because the Philippines depends heavily on imported fossil fuels.

“It is not only about price. Energy security is also a factor,” Sales said.