Singapore pushes back against US biofuel scrutiny

The government maintained local output followed market demand as the US trade probe continues.

Singapore defended its biofuels industry as the United States continues an investigation into alleged manufacturing overcapacity that could affect Singapore-produced sustainable aviation fuel (SAF).

In a written parliamentary reply, Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said Singapore's energy and chemicals industry, including biofuels, operates in a competitive global market and does not subsidise biofuel production.

The comments came in response to a parliamentary question on the government's assessment of testimony by Clean Fuels Alliance America, which alleged that biofuel production in Finland, Singapore and the Netherlands has structural excess capacity that threatens US producers.

The testimony was submitted on 8 May as part of an ongoing Office of the United States Trade Representative investigation under Section 301 of the Trade Act of 1974 into the manufacturing sectors of 16 economies, including Singapore.

Gan said Singapore's biofuel production capacity and exports are driven by market demand, with producers pricing 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," he said.

Gan added that it would be premature to speculate on the potential impact of the trade association's testimony whilst the USTR investigation remains ongoing.

He said Singapore has been engaging the USTR throughout the process and has highlighted that its economic policies are designed not to distort market forces.

The government will continue engaging the USTR on the matter as necessary, Gan said.