Global Sustainable Aviation Fuel Market Research Report: Forecast (2023-2028)

Market Definition

Sustainable Aviation Fuels, often produced from renewable resources like biologically originated waste oil, agricultural residues, & biomass, among others, are considered a clean alternative to fossil fuels. The operating efficiency of these fuels is comparable to conventional fuels but with fractional environmental impact.

Market Insights & Analysis: Global Sustainable Aviation Fuel Market (2023-28)

The Global Sustainable Aviation Fuel Market size was valued at USD 610 billion in 2022 and is projected to grow at a CAGR of around 56.32% during the forecast period, i.e., 2023-28. The growth of the market would be driven primarily by the escalating concerns over the accumulative carbon & Green House Gas (GHG) emissions worldwide, which has compelled numerous sectors to come up with more sustainable solutions. Since the aviation industry is one of the prominent contributors to the increasing global burden of such emissions, the emergence of sustainable aviation fuels seems promising, i.e., instigating the demand for fuel alternatives like hydrogen fuel, biofuel, & power-to-liquid fuel, etc.

These fuel alternatives are anticipated to come as a feasible solution with several socio-economic benefits & contribute significantly to mitigating the hazardous environmental effects of the aviation sector. The market is further characterized by the latest technological advancements in the production pathways of SAF that have proven more effective in reaching the scale required to support ambitious climate goals. For example:

• In MAY 2023, Honeywell announced the launch of a new processing solution, named UOP refining technology, that seeks to facilitate the production of sustainable aviation fuel (SAF) from captured CO2 at scale. The solution is all set to be deployed at the anticipated world's largest eFuels SAF facility, with HIF Global as its first customer.

With an exponential rise in passenger traffic, numerous airline companies worldwide are swiftly expanding their commercial aircraft fleet, which requires them to turn to such latest technologies to mitigate their massive carbon footprints. Given this, these airlines are formulating GHG reduction targets and offtake agreements for sustainable aviation fuel. For example,

• Delta Airlines has come forward with sustainable aviation fuel goals that include achieving 10% SAF usage by the end of 2030, 35% by 2035, and at least 95% by 2050.

It is primarily because of the remarkable properties of renewable fuels in reducing lifecycle GHG emissions by 85% as compared to conventional fuels. Thus, the increasing inclination of airlines towards adopting SAF as a part of their strategies to curb carbon emissions is expected to bode well for industry growth.

Furthermore, several initiatives by the government to decarbonize the aviation sector, including the mandates regarding SAF use, have further influenced the market dynamics, paving the way for extensive utilization and, subsequently, the production of SAF. For instance:

• European Parliament and EU Council announced an agreement on new rules demanding a minimum SAF share of fuel at EU airports, rising to 70% by 2050.

Backed by the continuous government support in terms of mandates & incentives, the Global Sustainable Aviation Fuel Market is set to flourish during the forecast years.

Global Sustainable Aviation Fuel Market Driver

A Sudden Surge in The Number of Agreements among Airlines & SAF Producers: As the airlines continue prioritizing their climate goals, there has been a significant inclination towards renewable fuels. It is because these companies have recognized the potential of SAF in delivering the performance of petroleum-based jet fuel while leaving minimal carbon footprints, enabling the aviation industry to embrace decarbonization on a much larger scale. Given this, there has been massive investment in non-bio-oil technologies and feedstock, such as biomass and ethanol-to-jet fuel, resulting in the emergence of more producers, in turn, positively influencing the market dynamics.

Global Sustainable Aviation Fuel Market Opportunity

Burgeoning Production of Biomass Crops: The rising inclination toward producing fuel alternatives like sustainable aviation fuels has enabled farmers to grow biomass crops as an extra source of income during off-seasons & provide feedstock to the market. Additionally, this increased production benefits the soil by reducing the loss of nutrients & enhancing its quality. Hence, the leading players may witness profitable opportunities from the growth, procurement, and production of sustainable aviation fuels in the coming years.

Global Sustainable Aviation Fuel Market Growth Restraint

Easy Availability of Conventional Fuel at a Relatively Cheaper Cost: The need for massive investments in the approval & certification of sustainable aviation fuels, coupled with the inadequate availability of feedstock to produce these fuels, might restrain the growth of the Global Sustainable Aviation Fuel Market in the coming years. Additionally, sustainable aviation fuel is more expensive than conventional fuels, which challenges the planning & budgeting for operational efficiencies in the aviation sector and might hinder the global market growth during 2023-28.

Global Sustainable Aviation Fuel Market (2023-28): Segmentation Analysis

The Global Sustainable Aviation Fuel Market study from MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the global, regional, and national levels. Based on the analysis, the market has been further classified:

Based on Fuel Type:

• Hydrogen Fuel
• Biofuel
• Power to Liquid Fuel
• Gas to Liquid Fuel

Of them all, Biofuel is anticipated to continue dominating the Global Sustainable Aviation Fuel Market with the largest share during the forecast period. It owes to the growing focus of governments of different countries worldwide to address the alarming levels of carbon emissions generated by the aviation sector and the increasing demand for sustainable aviation fuel by prominent airlines, soaring the need for Biofuel to produce sustainable aviation fuels. This, in turn, is expected to contribute significantly to the conservation of the environment. Recently, prominent companies have actively participated in the market, for instance:

On the other hand, Hydrogen-based aviation fuel has immense potential to substitute conventional aviation fuels, i.e., due to the exceptional qualities of hydrogen, such as lightweight, minimum pollution, extensive availability, & safety. However, the current & big price difference between hydrogen fuels & conventional jet fuels, coupled with issues related to hydrogen storage & passenger perceptions of its safety, are the primary aspects challenging its commercialization globally.

Nevertheless, the aviation industry is actively working on developing the world's first zero-emission commercial aircraft by 2035. Green hydrogen, one of the most recent developments in aviation fuel and a prominent aspect of net-zero climate strategies, is projected to play a significant role in the world of sustainable aircraft, owing to which aviation authorities worldwide are increasingly investing in it.

Based on the Blending Capacity:

• Below 30%
• 30% to 50%
• Above 50%

Here, the demand for sustainable aviation fuels with 30% to 50% blending capacity is anticipated to grow fastest during the forecast period. The maximum blending limit mandated by ASTM International for SAF is 50% with conventional jet fuel. It means that up to 50% bio-jet fuel, produced either by the Hydro-generated Esters & Fatty Acids (HEFA) process or Synthesized Iso-Paraffins (SIP) and blended with conventional petroleum, can be used as aviation fuel.

HEFA is nearly 40% costlier than petro jet, while SAFs produced using other methods are around 60-70% more expensive than conventional jet fuels. As a result, biofuels produced using HEFA are more cost-effective than other methods, and their demand (30 - 50% blending capacity) is rapidly growing worldwide. However, leading OEMs like Boeing and Airbus are all actively working on developing new engines that can support 100% blending. For instance:

• In March 2023, Airbus announced that its A321neo aircraft recently took off from the headquarters in Toulouse, with both of its engines powered by 100% unblended SAF.

Global Sustainable Aviation Fuel Market (2023-28) Regional Projection:

Geographically, the Global Sustainable Aviation Fuel Market expands across:

• North America
• South America
• Europe
• Middle East & Africa
• Asia-Pacific

Of them all, North America is anticipated to display the fastest market growth during the forecast period. The region has the most significant aircraft fleet & passenger traffic worldwide, owing to which it contributes substantially to carbon emission generation. It, in turn, is compelling governments of different countries like the US & Canada to seek ways to reduce these emissions through various initiatives for the adoption & utilization of sustainable aviation fuels.

Besides, the region has a massive aviation industry & is prevalent in generating sustainable aviation fuels, where prominent energy-producing companies like Diamond Green Diesel & AltAir are using waste feedstock for fuel production and fueling the regional market growth. Moreover, with favorable policies & initiatives like Midwest Aviation Sustainable Biofuels Initiative (MASBI), Commercial Aviation Alternative Fuel Initiative (CAAFI), & Canada’s Biojet Supply Chain Initiative, etc., across the region, North America would witness a strong foothold of sustainable aviation fuels in the coming years.

Across the US, the Department of Energy is collaborating with the Department of Transportation, the Department of Agriculture, and other federal government agencies to devise advanced technologies for producing sustainable aviation fuels on commercial scales.

• According to United States Environmental Agency, approximate 5 million gallons of SAF were consumed in 2021 and over 14 million gallons in 2022.

Global Sustainable Aviation Fuel Industry Recent Developments:

• In December 2022, Fulcrum BioEnergy successfully completed the manufacturing of first ever low-carbon fuel from landfill waste at its Sierra biofuels plant.
• In March 2022, Avfuel Corporation disclosed its plan to consistently supply Neste MY Sustainable Aviation FuelTM to Del Monte Aviation (KMRY).
• In October 2021, Neste Oyj planned to produce 515 million gallons of sustainable aviation fuel by the end of 2023, collaborating with Delta & JetBlue. The leader, using agricultural waste & animal fats as a step toward reducing Green House Gas (GHG) emissions, developed its blended fuel.

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