Report: SAF Industry to Reach $16.8 Billion by 2030

Bird's eye view of airplane parked at its gate

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by | Jan 10, 2024

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A new report expects the global sustainable aviation fuel market to grow from $1.1 billion in 2023 to $16.8 billion in 2030, spurred by government incentives and airline sustainability targets, with a compound annual growth rate of 47.7%.

Sustainable aviation fuel (SAF) is used as a low-emissions alternative to jet fuel, made from materials such as bio-based feedstocks, oils, and agricultural waste. It has also been considered the most viable pathway to decarbonizing aviation in the near term as it may act as an additive to conventional fuels and does not require additional infrastructure.

The report analyzed key players in the SAF industry, including Neste, World Energy, Total Energies, LanzaTech, and Fulcrum BioEnergy, to identify key trends within the sector. Growth of the SAF market, according to the report, has been driven mainly by increased awareness of climate change and the accompanying need to reduce emissions along with various regulatory initiatives and mandates.

Commercial Segment, Hydrogen Fuel Cells Identified as Industry Leaders

The report found that the commercial aviation segment leads the market for SAF as airlines, aircraft manufacturers, and biofuel producers form partnerships in order to adopt the low-emissions fuel. In 2023 alone, a number of major airlines committed to offtake agreements to purchase SAF once it reaches large-scale production. Virgin Airlines also became the first commercial airline to complete a flight run on 100% SAF last year, attempting to promote the fuel’s ability to successfully reduce emissions without compromising on flight quality.

In terms of fuel type, hydrogen fuel cells reportedly lead the industry because of their high energy density and compatibility with existing airline infrastructure.

Regionally, North America is reportedly at the forefront of the SAF market, largely due to progressive regulatory frameworks and emissions reduction targets made for the aviation sector.

Rising Air Passenger Traffic Meets SAF Feedstock Shortages

A major issue identified by the report is the combination of rising demand for air travel combined with the lack of currently available SAF. Since SAF is still a comparatively new technology and feedstocks are not produced on a wide scale, the industry is expected to experience shortages that may hinder its growth.

Improving feedstock yields is therefore paramount for the industry’s success, according to the report. SAF companies are working to increase their supply of key crops, such as camelina oilseeds, used for the fuel.

SAF currently accounts for an extremely small share of overall jet fuel used by airlines, and it has not yet been commercialized at scale. Prices compared to conventional jet fuel also remain high, further limiting the sector’s growth at present. Nonetheless, the report cites immense opportunity for the industry, provided government initiatives continue to support its development and airlines maintain their net-zero commitments.

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