Sustainable Aviation Fuel: The Green Future of Flying

7 min readNov 18, 2024

Market Regional Analysis for Sustainable aviation fuel (SAF)

During the forecast period, North America is anticipated to play a key role in the global market growth, with a contribution of 39%. Technavio’s analysts have delved into the regional trends and drivers that will impact the market during this time.

The North American Aviation industry is thriving, thanks to its strong foundation, and the global demand for new aircraft is driving significant investments in the development of more efficient aircraft systems. This trend is expected to have a notable impact on the Sustainable aviation fuel (SAF) market, particularly in the United States. In fact, the US is projected to become the world leader in integrated biorefinery manufacturing, capable of producing bio-based jet fuel and marine distillates, further bolstering the use of biofuels in aviation.

To further enhance the economic viability of the Sustainable aviation fuel (SAF) market and promote research and development, various incentives such as special category loans, grants, and funds have been implemented. This support has not only expanded research in the biofuels in aviation sector but has also improved the quality of biodiesel, thereby increasing the viability of the SAF market. Moreover, recognizing the high market demand for biodiesel, the government offers subsidies and other incentives to encourage its usage. Considering all these factors, it is highly likely that the Sustainable aviation fuel (SAF) market will experience significant growth during the forecast period.

**Source:** Sustainable Aviation Fuel Market Size, Share & Trends [2023 Report] (technavio.com)

Biofuel: The Largest Segment in Sustainable aviation fuel (SAF)

Considerable growth is anticipated in the biofuels in aviation segment throughout the forecast period. Regulatory bodies have placed emphasis on evaluating aircraft based on carbon emissions and pollution, with the aim of reducing emissions within the Aviation industry. As a result, aircraft manufacturers and suppliers of aircraft components have increasingly prioritized the reduction of aircraft emissions, which is expected to drive the expansion of the SAF Market. Key stakeholders, including the International Civil Aviation Organization (ICAO) and the Commercial Aviation Alternative Fuels Initiative (CAAFI), are actively collaborating to enhance the commercial viability of sustainable aviation biofuel, thereby contributing to the Aviation industry’s sustainable energy requirements.

Despite their potential as an alternative to conventional fuels, biofuels in aviation encounter limitations such as restricted availability and challenges like resistance from the conventional fossil fuels market. Nonetheless, the global Aviation biofuel market is projected to experience growth in the foreseeable future, thanks to increased government emphasis on targets and incentives.

Advantages of Sustainable Fuel Aviation (SAF)

Emission Reduction: SAF significantly reduces carbon emissions compared to traditional jet fuels, contributing to the Aviation industry’s efforts to combat climate change.
Diversification of Feedstocks: The use of various feedstocks for SAF production promotes diversity, reducing reliance on a single source and addressing concerns related to food crops.
Global Environmental Impact: The adoption of SAF on a global scale can have a substantial positive impact on the environment, making air travel more sustainable.
Technological Advancements: Ongoing research and development are driving technological advancements in SAF production, leading to more efficient and cost-effective processes.
Renewable Energy Integration: SAF production aligns with the broader goal of integrating renewable energy sources into various industries, contributing to a cleaner and more sustainable energy landscape.

Disadvantages of Sustainable Fuel Aviation (SAF)

Limited Availability: The current production capacity for SAF is limited, hindering its widespread adoption across the Aviation industry.
Cost Challenges: SAF production costs are higher than those of conventional jet fuels, making it less economically viable for some airlines, especially those operating on thin profit margins.
Infrastructure Requirements: The infrastructure for producing, transporting, and storing SAF needs significant development to meet the demands of a global Aviation industry.
Competition with Food Production: Some SAF feedstocks, such as certain biofuels, may compete with food production, raising ethical concerns about resource allocation.
Regulatory Hurdles: While regulatory support is growing, there are still challenges in establishing consistent and globally accepted standards for the production and use of SAF.

SAF is at a critical juncture, poised to play a pivotal role in the Aviation industry’s quest for environmental sustainability. With ongoing technological advancements, increased collaboration, and regulatory support, the future looks promising for SAF.

However, challenges related to production costs, infrastructure, and regulatory frameworks must be addressed to facilitate a seamless transition to widespread adoption. As we navigate the skies of the future, SAF stands as a beacon of hope for a more equitable and eco-friendly Aviation sector.

Policy initiatives for adoption of SAF

At the 41st International Civil Aviation Organization (ICAO) Assembly held in South Korea (2022), an important milestone was reached with the adoption of the Long Term Global Aspirational Goal (LTAG). This goal commits the international Aviation sector to achieve net-zero carbon emissions by 2050, in line with the objectives of the UNFCCC Paris Agreement

The technical analysis carried out by the ICAO highlights SAF as having the greatest potential to lower CO2 emissions in the international Aviation market. Consequently, the ICAO is committed to facilitating the development and implementation of SAF by introducing globally accepted environmental standards, including CORSIA, which provides methodologies for aircraft operators to decrease carbon offsetting requirements through the utilization of SAF and LCAF
In a significant move towards reducing carbon emissions in the Aviation industry, the European Union (EU) has introduced the ReFuelEU Aviation initiative. By 2023, the EU has committed to decarbonizing air travel by implementing the world’s longest green fuel mandate.
This initiative requires Aviation fuel suppliers at EU airports to provide a minimum share of SAF, starting at 2% of the total fuel supply by 2025. Over the course of the decade, this percentage will gradually increase to 6% and eventually reach an impressive 70% by 2050.
Furthermore, the new regulations also mandate that aircraft operators departing from EU airports only refuel with the necessary amount of fuel for their flights, thereby avoiding excess weight and emissions. To support these efforts, airports must ensure that their infrastructure is capable of effectively distributing SAF.
The U.S. Inflation Reduction Act of 2022 initiated the Fueling Aviation’s Sustainable Transition (FAST) Grant Program under the Department of Transportation. This program is designed to allocate $244.5 million in grants for SAF-related activities such as production, transportation, blending, and storage, while also promoting the adoption of green hydrogen technology.

Initiatives to boost SAF adoption

Sustainable Aviation Fuel Users Group (SAFUG) was founded in September 2008, consisting of the world’s 25 major airlines representing 33% of commercial Aviation fuel demand. The group also includes aerospace manufacturers like Boeing, Airbus, and Embraer, fuel service providers such as Honeywell UOP, and environmental NGOs like the Natural Resources Defense Council (NRDC) and World Wildlife Fund (WWF). SAFUG is dedicated to expediting the progress and implementation of SAF within the Aviation sector.
The World Economic Forum’s Clean Skies for Tomorrow Coalition has made remarkable progress in its mission to promote SAF. In 2021, a notable achievement was reached as 60 organizations from the airlines, transport, and cargo industries signed the 2030 Ambition Statement. This statement signifies their commitment to working together towards the common objective of achieving net-zero emissions by 2050. By striving to fuel global Aviation with 10% SAF by 2030, these organizations are actively contributing to a greener and more sustainable future.
United Airlines, in conjunction with Air Canada, Boeing, GE Aerospace, JP Morgan Chase, and Honeywell, launched the “United Airlines Ventures Sustainable Flight Fund” in February 2023. This $100 million venture capital fund is designed to invest in startup companies and technologies that are dedicated to enhancing the accessibility of SAF.

Conclusion

To pave the way for a low carbon economic model and a sustainable, climate-resilient future, it is imperative to prioritize the decarbonization of the Aviation sector.

Consequently, the initial switch to SAF would primarily rely on bio-based Aviation fuels, but it is projected that these fuels will eventually be replaced by more sophisticated power-to-liquid fuels or e-fuels.

In the foreseeable future, there may emerge a sustainable and optimized method for harnessing energy, but during the transitional phase, the most efficient approach is to rapidly increase the adoption of the SAF.

How Acuity Knowledge Partners can help

We are the preferred partner for sustainable finance solutions. We offer our expertise in carbon trading mechanisms and clean-energy markets, sustainable aviation fuel strategy building along with in-depth market research capabilities across the energy value chain, helping some of the biggest companies in the world transition to sustainability and carbon-neutral operations. Our large pool of experts is experienced in the power and energy sectors and support companies active in investing, developing, and promoting clean energy and cleantech solutions across geographies.

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**Author:** Rupal Pujara, Senior Associate

Rupal Pujara have 5.2 years of experience in ESG, Sustainability and Climate Change and has completed 1.8 years with Acuity knowledge Partners. Her expertise is in consultancy with experience in climate change, sustainability strategy, emissions & risk assessment. ESG analysis, rating & benchmarking of the companies as part of the global team involved in the production of the prestigious Dow Jones Sustainability Index (DJSI). At Acuity Knowledge Partners she is part of ESG teams and is specialized in ESG analysis, rating & benchmarking of the companies as part of the team involved in the providing client solutions and consultancy services. Rupal Pujara is MBA from Guru Gobind Singh Indraprastha University.