The government is going all out on the development of sustainable aviation fuel (SAF) through agreements with a local alliance promoting the decarbonization of the aviation sector, as it looks to position the country as a hub for renewable fuel.

The Board of Investments (BOI) said in a statement that it has signed a memorandum of understanding (MOU) with Island Skies Alliance Inc. (ISA) to formulate policies that would fast-track the buildup of an inclusive SAF industry.

Under the agreement, both the BOI and ISA plan to align initiatives and resources to promote a collaborative approach to developing a SAF ecosystem that spans various areas of cooperation.

The partnership will cover industry promotion, investment facilitation, policy advocacy, capacity building, and stakeholder engagement.

Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said the MOU signals the country’s readiness to become a strategic player in the global SAF space.

"Investing in SAF is investing in the future. The Philippines has all of the elements needed to be a global hub, a world leader when it comes to SAF," he said.

Rodolfo said the Philippines is well-positioned to develop SAF due to its growing aviation sector, abundant feedstock, and favorable policies.

SAF, which serves as an alternative to conventional jet fuel, can be produced from sustainably sourced materials such as used cooking oil, biomass waste and residues, and renewable energy and carbon.

This can cut lifecycle carbon emissions by as much as 80 percent compared to regular jet fuel, according to the International Air Transport Association (IATA).

Prior to the BOI agreement, the Civil Aviation Authority of the Philippines (CAAP) also signed a separate MOU with ISA to collaborate on developing the country’s SAF ecosystem.

As a nonprofit aviation-focused organization based in the Philippines, ISA brings together airlines, investors, government agencies, technology providers, and sustainability experts to accelerate aviation decarbonization.

Under its partnership with CAAP, ISA will help the agency conduct stakeholder coordination, pilot projects, capacity-building programs, carbon market initiatives, and private sector engagement.

In addition, CAAP said it also signed an agreement with South Korea-based intergovernmental organization Global Green Growth Institute (GGGI) for SAF development.

This partnership involves cooperation on technical assistance, policy development, and access to international expertise to support SAF and broader aviation sustainability initiatives.

The government's push to position the Philippines as a hub for SAF production and investment comes as the global aviation sector works to expand the share of SAF in the aviation fuel mix to 65 percent by 2050.

Earlier, IATA said in a report that global SAF production is expected to reach around 2.4 million tons this year, equivalent to roughly 0.8 percent of jet fuel consumption.

“The path to meeting 65 percent of our needs in 2050 is growing more difficult with each year of ineffectively sequenced government policies and oil companies’ manifest lack of interest,” said IATA director general Willie Walsh.

He said the current energy crisis should have given governments around the world greater urgency to develop SAF, but this has yet to “materialize in the incentives needed to create a viable SAF market.”