Sustainable Aviation Fuel Market Trends

Increasing concerns regarding environment of using non-renewable fuels is one of the key driving forces for the sustainable aviation fuel market. The aviation industry is facing increased pressure to reduce carbon emissions with growing concern regarding climate change, and the negative impacts of greenhouse gas emissions. Carbon dioxide (CO2) emitted by the aviation industry (aviation) is the primary greenhouse gas with a significant emission load. SAF is a solution that offers a good chance to limit these emissions and address environmental problems. 

Regulatory bodies and government agencies across the globe, especially in the developed economies are drafting laws and regulations to foster the acceptance of SAF. Optimistic market environment for SAF has emerged due to the adoption of sustainability targets imposed by government agencies controlling the regulations for the aviation industry. Supporting the generation and use of SAF, government policies encompass tax relief and offers finance benefits, leading to market growth.  

Higher cost of SAF in comparison to traditional jet fuel is a major constrain for the market growth in the short to medium term. Production costs of SAF is significantly high to make it economically competitive due to the lack of economy of scale. The price gap presents a challenge for general acceptance, especially for airline companies whose profit margins have traditionally been slim. 

The lack of supply of the required raw materials to produce the sustainable aviation fuel leads to slow market growth. Moreover, technology constraint of refineries reduces the utilization of these feedstocks as it decreases the efficiency of the sustainable aviation fuel production. The scarcity of fuel leads to a bottleneck in fuel blending capacity, thus reducing the overall efficiency. There is a great potential for sustainable aviation fuel, but production capacity must be developed to meet market demand.