Malaysia Airlines’ parent company is considering implementing a passenger levy to help offset the high costs of sustainable aviation fuel (SAF), the firm’s head said Monday. Capt. Nasaruddin A. Bakar, CEO of Malaysia Aviation Group, acknowledged that such a green tax could lead to increased ticket prices, reflecting the broader financial challenges airlines face in adopting environmentally friendly fuels.

Speaking at an aviation sustainability conference, Nasaruddin emphasized the need to balance affordability for consumers with the airline’s ability to procure SAF, which remains more expensive and less widely available than conventional jet fuel. “We are looking at all options,” he said, highlighting the financial pressures linked to the transition toward lower-carbon aviation.

The aviation sector is under growing pressure to reduce its environmental impact. According to the International Energy Agency, aviation accounts for approximately 2.5% of global carbon emissions annually. Meanwhile, the International Civil Aviation Organization (ICAO), a United Nations agency, has set an ambitious target for the sector to achieve net-zero carbon emissions by 2050.

Singapore became the first country to introduce a government-mandated green aviation tax, scheduled to take effect in January 2027. Under this scheme, fees will vary depending on flight destination and cabin class, setting a precedent for other regional carriers and governments looking to finance the transition to sustainable fuels.

As airlines worldwide seek routes to meet emissions goals, the limited supply and high price of SAF pose significant hurdles. Malaysia Airlines’ approach to potentially passing some of these costs to passengers mirrors a broader industry debate on how best to balance environmental commitments with economic sustainability.