Singapore's Engagements with US Trade Representative to Prevent Retaliatory Tariffs on Singapore-produced Sustainable Aviation Fuel
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the assessment of testimony by the Clean Fuel Alliance America to the US Trade Representative regarding alleged structural excess capacity in Singapore’s biofuels industry. Mr Dennis Tan Lip Fong asked about the potential impact of these allegations and the specific trade engagements undertaken to prevent retaliatory tariffs on Singapore-produced sustainable aviation fuel. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong responded that Singapore’s biofuel production is unsubsidised and demand-driven, with pricing based on global commodity markets and feedstock costs. He highlighted that Singapore has constructively engaged the US Trade Representative to emphasize that its economic policies are designed not to distort market forces. The Minister further noted that as a small and open economy, Singapore must serve global demand and advised against speculating on the ongoing investigation.
Transcript
38 Mr Dennis Tan Lip Fong asked the Deputy Prime Minister and Minister for Trade and Industry (a) what is the Ministry's assessment of the impact of the Clean Fuels Alliance America's testimony to the US Trade Representative (USTR) on 8 May 2026 characterising Singapore's renewable fuel production as having structural excess capacity; and (b) what specific diplomatic and trade engagements is the Ministry undertaking with the USTR to prevent retaliatory tariffs on Singapore-produced sustainable aviation fuel.
Mr Gan Kim Yong: On 8 May 2026, Clean Fuel Alliance America (CFAA), a United States (US) trade association, alleged that overcapacity in the biofuels industries of Finland, Singapore and the Netherlands threatened US producers. This allegation was made at a public hearing as part of the US Trade Representative's (USTR's) investigation under Section 301 of the Trade Act of 1974 into the acts, policies and practices of 16 economies, including Singapore, relating to structural excess capacity and production in manufacturing sectors.
Singapore’s energy and chemicals industry, including biofuels, operates in a competitive global market. Singapore does not subsidise the cost of biofuel production. Singapore's production capacity and exports of biofuels are demand driven and producers price their products based on global commodity prices, feedstock costs and prevailing market conditions. As a small and open economy, our manufacturing output cannot depend solely on domestic demand and would also need to serve the needs of overseas markets.
We should not speculate on the potential impact of the CFAA's testimony on the USTR's investigation, which is still ongoing. Singapore has constructively engaged the USTR throughout this process and highlighted that our economic policies are carefully designed not to distort market forces. We will continue to engage the USTR on this matter as necessary.