SUSTAINABLE AVIATION FUEL (BIOFUEL) MARKET INTRODUCTION

SAF market is an essential substitute for conventional jet fuel that is designed to significantly decrease the carbon footprint of the aviation industry. It often utilized in existing aircraft and infrastructure without requiring modifications as it is produced from non-petroleum feedstocks and possesses chemical similarities with conventional Jet A fuel.

MARKET OVERVIEW

The sustainable aviation fuel (biofuel) market is valued at approximately USD 1.61 billion in 2024 and is projected to reach USD 410.77 billion by 2035 exhibiting a compound annual growth rate (CAGR) of 65.5% during the forecast period of 2025-2035. As global climate goals rise and regulatory requirements become more stringent, SAF is considered as the most practical short-term way to lower aviation emissions without requiring the replacement of current infrastructure or aircraft.

GROWTH DRIVERS

The market is expanding primarily due to the rigorous environmental regulations and encouraging government policies. Regions such as the United Kingdom and the European Union have implemented ambitious frameworks that set progressive targets for SAF blending in aviation fuel, such as the UK's SAF Mandate and the EU's Renewable Energy Directive III (RED III) and ReFuelEU Aviation Regulation. For example, the ReFuelEU Aviation program requires SAF blending to increase gradually, with a target of 70% by 2050 and a starting at 2% in 2025. Similar to this, the U.S. government offers tax credits and subsidies to encourage the manufacture and use of SAF through programs like the Sustainable Skies Act and the Inflation Reduction Act. The commercialization and investment in SAF refineries globally are accelerating due to the mandates and incentives.

The aviation industry's major contribution to global CO2 emissions has led to a substantial commitment to decarbonization (2.5% of global CO2 and 12% of transport emissions). According to the International Air Transport Association (IATA), Liquid fuels, such as SAFs, have the potential to decrease CO2 emissions by up to 80% using sustainable sources, which is likely to be responsible for 65% of aviation's net-zero emissions by 2050. The rise in environmental awareness, consumer demand for sustainable travel options, and global CO2 reduction programs like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) are driving this commitment. The development and adoption of SAFs is facilitated by the growing focus on reducing greenhouse gas emissions.

MARKET SEGMENTATION:

By Biofuel Conversion Pathway -

·         Fischer Tropsch (FT)

o   Fischer-Tropsch Synthetic Paraffinic Kerosene (Ft-SPK)

o   Fischer-Tropsch Synthetic Paraffinic Kerosene with Aromatics (FT-SPK/A)

·         Hydroprocessed Esters Fatty Acids- Synthetic Paraffinic Kerosene (HEFA)

o   Hydroprocessed Esters And Fatty Acids - Synthetic Paraffinic Kerosene (HEFA-SPK)

o   High-Hydrogen Content Synthetic Paraffinic Kerosene (HHC-SPK)

o   Hydroprocessed Fermented Sugars to Synthesized Iso-Paraffins (HES-SIP)

·         Alcohol to Jet (ATJ)

o   Alcohol-To-Jet Synthetic Paraffinic Kerosene (ATJ-SPK)

o   Alcohol-To-Jet Synthetic Kerosene with Aromatics (ATJ-SKA)

·         Catalytic Hydrothermolysis Jet (CHJ)

·         Co-Processing Technologies

By Biofuel Blending Capacity –

·         Below 30%

·         30-50%

·         Above 50%

By Aircraft Type –

·         Commercial Aviation

o   Narrow-Body Aircraft

o   Wide-Body Aircraft

o   Regional Transport Aircraft

·         Business And General Aviation

o   Business Jet

o   Light Aircraft

o   Commercial Helicopter

·         Military Aviation

o   Fighter Aircraft

o   Transport Aircraft

o   Special Mission Aircraft

o   Military Helicopter

·         Unmanned Aerial Vehicle (UAV)

By End User –

·         Airliner

o   Large Airliner

o   Medium Airliner

o   Small Airliner

·         Non-Scheduled Operator

·         Government & Military

By Region -

·         North America

·         Europe

·         Asia Pacific

·         Latin America

·         Middle East & Africa

Sustainable Aviation Fuel (Biofuel) Market By Biofuel Conversion Pathway Segment Review:

 The FT pathway is adaptable, capable of turning a variety of carbon-rich feedstocks into liquid hydrocarbons. The wide feedstock base has a substantial edge over other pathways like HEFA, which are constrained by the scarcity of waste lipids. The scalability of FT is enhanced by its ability to use abundant resources like woody biomass and agricultural residues.

Sustainable Aviation Fuel (Biofuel) Market By Biofuel Blending Capacity Segment Review:

The primary advantage of blending below 30% is its compatibility with current aircraft engines and fuel infrastructure, meeting current regulations without necessitating major changes or re-certification. It is the preferred initial step for airlines transitioning to SAF due to the ease of integration.

Sustainable Aviation Fuel (Biofuel) Market By Aircraft Type Segment Review:

In 2025, commercial aviation segment is anticipated to hold the largest share of the market due to the increasing global demand for air travel and growing environmental concerns.

Sustainable Aviation Fuel (Biofuel) Market By End User Segment Review:

In 2025, airliner’ segment is anticipated to hold the largest share of the market due to regulatory pressures, corporate sustainability goals, and the sheer volume of fuel required for commercial passenger and cargo flights.

Sustainable Aviation Fuel (Biofuel) Market By Region Segment Review:

The sustainable aviation fuel (biofuel) market exhibits significant regional variations, with NA leading the market in 2024 due to its robust regulatory support, technological advancements, and increasing commitments from airlines to decarbonize the aviation sector.

Sustainable Aviation Fuel (Biofuel) Market Regional Synopsis:

The North America market is anticipated to dominate the global market due to the robust regulatory support, technological advancements, and increasing commitments from airlines to decarbonize the aviation sector.

The Europe market is expected to witness significant growth, driven by the stringent environmental regulations and ambitious decarbonization targets set by the European Union.

The market in APAC is growing rapidly due to their environmental policies, abundant feedstock availability, and a rapidly expanding aviation sector.

The Latin American market is experiencing substantial growth, driven by a combination of international commitments, local policies, abundant feedstock potential, and increasing investments.

The market expansion in the MEA region is driven by the strong government initiatives, abundant renewable energy resources, increasing airline commitments, and strategic geographical positioning.

Key Challenges:

The market growth is substantially hampered by its high manufacturing cost, which can be two to eight times more expensive than conventional jet fuel. The price premium has a significant financial impact on airlines, particularly for long-haul international routes. Many airlines are likely remains unable to afford SAF in the absence of subsidies, tax breaks, or carbon pricing schemes.

Competitive Landscape:

The global sustainable aviation fuel (biofuel) market is highly competitive, characterized by mix of established players, each striving to enhance their market presence through various strategies such as partnerships, collaborations, and investments aimed at scaling production, developing new technologies, and securing feedstock supply.

Companies are increasingly prioritizing technological advancements and diversification of production pathways in this market. Businesses are making significant investment in research and development to improve feedstock processing and refining technologies, and to explore new conversion pathways.

Key Players:

·         Neste

·         OMV Aktiengesellschaft

·         TotalEnergies

·         Eni

·         World Energy, LLC

·         Shell Global

·         LanzaTech

·         Gevo

·         Northwest Advanced Bio-Fuels, LLC

·         SkyNRG B.V.

·         Topsoe A/S

·         AEMETIS, INC. 

·         Other Key & Niche Players