Passengers may fund cleaner fuel on Malaysia flights if government approves a new fee

The head of Malaysia Aviation Group, the parent company of Malaysia Airlines, said on 19 October 2026 that he does not rule out a green tax on passengers to help cover the high cost of sustainable aviation fuel (SAF) — a charge that would further raise ticket prices. Capt. Nasaruddin A. Bakar made the remarks to The Associated Press on the sidelines of an aviation sustainability conference.

Key facts

• Comments made on 19 October 2026 by Malaysia Aviation Group chief Capt. Nasaruddin A. Bakar
• Any green tax would be a decision for the government, not the airline — no amount or start date has been announced
• Neighbouring Singapore was the first country in the world to announce a government-mandated green aviation tax, due to apply from January 2027, with charges varying by destination and cabin class
• Sustainable aviation fuel is currently under 1% of global jet fuel use, according to the International Air Transport Association
• Malaysia Airlines is ordering 40 Airbus A330neos and 55 Boeing 737 MAX jets as part of its fleet renewal

What is being considered?

Nasaruddin said his group is looking at all options when it comes to absorbing the cost of sustainable aviation fuel. He stressed that consumers must be able to afford flying and that airlines must be able to afford to buy the fuel.

He warned that passing the full cost on to consumers could make air travel less attractive, and said regulators, fuel suppliers and airlines need to work together to bring down SAF prices. He did not rule out further price increases beyond any green tax, saying he does not have a crystal ball.

Who would decide, and when?

Nasaruddin said the decision on a green tax is up to the government. No timeline, fee amount or details of how such a charge would work in Malaysia have been announced. For comparison, the source notes that Singapore has announced a government-mandated green aviation tax taking effect from January 2027, with charges varying by destination and cabin class.

Why are costs rising?

Airlines worldwide are trying to cut carbon emissions while facing the high price and limited availability of sustainable aviation fuel. SAF is generally produced from renewable feedstocks such as used cooking oil, waste fats and agricultural residues, and it can be blended with conventional aviation fuel for use in existing aircraft. It is far more expensive than conventional jet fuel, and production capacity and access to sustainable feedstocks limit its wider use.

Using SAF could cut about 65% of the industry's emissions. The International Energy Agency says aviation contributes about 2.5% of annual global carbon emissions, and the U.N.-backed International Civil Aviation Organization has set a goal of zero net carbon emissions for 2050.

Nasaruddin also said the group faces pressure from higher conventional jet fuel prices amid the Iran war, with limited scope to recover increases through ticket prices. The same principle would apply to SAF: if the cost is not that high, more of it can be passed on to passengers, but if it is too high, the airline will not be able to do so.

What this means for travellers

Nothing changes yet. No green tax has been approved in Malaysia, and no amount or start date has been set. Travellers booking Malaysia Airlines flights should note that the airline's head did not rule out further fare increases.

Malaysia Airlines is also modernising its fleet with orders for 40 fuel-efficient Airbus A330neos and 55 Boeing 737 MAX jets, part of its focus on fleet renewal and SAF use to cut emissions.

Any future decision on a Malaysian green aviation tax now rests with the government.