Sustainable aviation fuel (SAF) is a renewable jet fuel produced from sustainable resources such as non-edible plants, municipal waste, and other biofeedstock. SAFs offer considerable environmental benefits as they emit less carbon and particulate matter than conventional jet fuel when combusted. The increasing focus on eco-friendly fuels and reduction of greenhouse gas emissions from airplanes is driving the demand for SAF globally.

The Global Sustainable Aviation Fuel Market is estimated to be valued at US$ 2.37 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024 To 2031.

Key Takeaways

Key players operating in the Sustainable Aviation Fuel market are Eisai Co., Ltd.,,Novartis AG,,AbbVie Inc. (Allergan Plc.),,Adamas Pharmaceuticals, Inc.,,H. Lundbeck A/S,,Biogen,,AC Immune,,F. Hoffmann La Roche Ltd.,,Daiichi Sankyo Company, Limited,,Johnson & Johnson Services, Inc.,,TauRx Pharmaceuticals Ltd. The growing environmental awareness among airlines and passengers is fueling the adoption of SAF globally. Major airlines such as KLM and Lufthansa have already started using SAF for commercial flights. Technological advancements to reduce production costs and improve the efficiency of SAF production processes are further expected to support market growth over the forecast period.

Market Trends

Small modular technology enables flexible production of Sustainable Aviation Fuel Market Size at various sites close to feedstock sources. This reduces transportation and logistics costs. Similarly, the development of advanced catalyst systems for hydroprocessing is significantly reducing production times and costs.

Market Opportunities

Increasing investments by governments and major oil producers in SAF production presents huge opportunities for market players. Stable policies and incentives promoting SAF usage can further stimulate demand. Growing emphasis on decarbonization of aviation and climate change mitigation programs also opens up new avenues.

Sustainable Aviation Fuel Market

The COVID-19 pandemic has significantly impacted the growth of the sustainable aviation fuel market. The travel restrictions and lockdowns imposed by various governments worldwide led to a steep decline in air travel demand. This negatively affected the consumption of conventional jet fuel as well as sustainable aviation fuel. However, with economies gradually reopening and vaccination drives underway, air passenger traffic is expected to recover gradually. This is likely to drive the demand for sustainable aviation fuel going forward. Airlines and fuel suppliers are also focusing on collaborating to scale up the production and distribution of sustainable aviation fuel to cater to the recovering demand and lower carbon emissions from the aviation sector post-COVID. Various initiatives by global bodies such as ICAO are also aimed at promoting the use of sustainable fuels by aircraft operators.

In terms of value, North America holds the major share of the sustainable aviation fuel market currently owing to supportive government policies and initiatives in countries like the US and Canada to commercialize the production and off-take of sustainable fuels. Major sustainable fuel producers are based in the US while several partnerships have been formed between fuel suppliers, airlines, and airports in the region for testing and deployment of sustainable fuel. Europe is another key regional market and continues to remain one of the fastest growing markets for sustainable aviation fuel. Countries like Sweden and Germany are at the forefront of developing domestic production capacities for sustainable aviation fuels through waste and residue-based pathways. Stringent climate change targets of the European Union also promote investments in lower carbon alternatives like sustainable aviation fuels to cut emissions from the aviation industry. Asia Pacific is expected to emerge as a high growth market for sustainable aviation fuel over the coming years. Countries such as India, China, Japan and South Korea are increasingly focusing on establishing domestic production facilities for sustainable aviation fuels, especially through municipal solid waste and used cooking oil-based pathways.

Sustainable Aviation Fuel Market

The North American region holds the largest share of the global sustainable aviation fuel market currently. This can be primarily attributed to the strong government policies and initiatives in the US and Canada promoting the commercialization of sustainable aviation fuels. Major sustainable fuel producers such as Neste, AltAir Fuels, and World Energy are headquartered in the US. In addition, several partnerships have been formed between airlines, airports, and fuel suppliers in the region for testing and deployment of sustainable aviation fuels. For instance, in 2019, Alaska Airlines flew the first commercial passenger flight using sustainable aviation fuel produced by World Energy at the Los Angeles International Airport. Similarly, American Airlines and jetBlue Airways have collaborated with fuel suppliers to use sustainable fuel blends on selected flights departing from multiple US airports.

Apart from supportive regulations, the presence of major aircraft fleets and airports in the region also contribute to the high demand for sustainable aviation fuels in North America currently. However, with stringent climate targets and initiatives by the European Union to decarbonize the aviation industry, Europe has emerged as one of the fastest growing regional markets. Countries like Sweden and Germany are investing heavily in developing domestic production facilities for sustainable aviation fuels using waste and residue-based feedstocks. The region also offers a conducive policy environment through incentives and mandates on airlines and fuel suppliers to increase the blending and usage of sustainable fuel for aviation applications.

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