IATA Urges Govt To Introduce Incentives Or Tax Credits In Budget 2025 To Support SAF

By Kisho Kumari Sucedaram

KUALA LUMPUR, Sept 24 (Bernama) -- The International Air Transport Association (IATA) urges the government to consider introducing incentives or tax credits in the upcoming Budget 2025 to support Malaysia’s emerging sustainable aviation fuel (SAF) industry.

IATA’s regional vice-president for North Asia and Asia Pacific (ad interim), Dr Xie Xingquan, said long-term government support and stable policies for research and development in energy transformation, especially for SAF in Malaysia, would also be crucial.

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“This is regarding the recovery of Malaysia’s aviation sector, which is progressing well, with full recovery expected in 2025,” he told Bernama recently.

Xie also mentioned that the recent launch of the Malaysia Aviation Decarbonisation Blueprint (MADB) was seen as encouraging.

Under MADB, the decarbonisation targets for aviation technology are to achieve 18 per cent by 2050, operational improvements (five per cent), use of SAF (46.20 per cent), and carbon offsetting (30.80 per cent).

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Besides that, he emphasised that the government should continue to commit funds in the budget to support infrastructure developments for the aviation industry.

Xie said the infrastructure support could be either through upgrades or new investments, including maximising the use of technology, such as biometric immigration systems.

“The upgrades of Kuala Lumpur International Airport’s automated people mover system (aerotrain) and the baggage handling system are positive. Key to this is having robust consultation with the airline customers,” he pointed out.

Another key focus, he said, is having the skilled workforce to support the industry’s development, including funding to enhance training capabilities further to ensure Malaysia has adequate and qualified human capital to support the industry’s needs.

“We also urge the government to exempt non-Malaysian airline crew from the tourism tax if they operate in Malaysia only,” he said.

Xie added that this will help reduce the cost of airlines’ operations in Malaysia and potentially encourage them to grow their services and enhance Malaysia’s air connectivity.

Echoing IATA’s suggestion for support towards SAF, Berjaya Land Bhd group chief executive officer Syed Ali Shahul Hameed is hopeful that Budget 2025 will introduce targeted incentives, such as tax relief and financial support, to encourage airlines to adopt green technologies such as SAF and fuel-efficient aircraft.

He stated that support in the form of regulatory guidance and capacity-building programs will help airlines like Berjaya Air navigate the complexities of sustainability while continuing to prioritise passenger safety and comfort.

“A collaborative approach that includes training and development programs for airline personnel will also be vital, ensuring that the workforce is equipped to manage new technologies and practices with the highest level of professionalism,” he pointed out.

National Aerospace Industry Corporation Malaysia (Naico Malaysia) chief executive officer Shamsul Kamar Abu Samah opined that there should be a certification system for airlines demonstrating a commitment to sustainability.

Besides that, he added that the government should implement stricter environmental standards for airlines, such as carbon emissions caps and fuel efficiency requirements, to encourage airlines to develop and implement their sustainability blueprint or action plans.

-- BERNAMA