Sustainable Aviation Fuel (SAF) Market Size, Share & Industry Analysis, By Type (Biofuel and Synthetic Fuel), By Technology (HEFA-SPK (Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene), FT-SPK (Fischer-Tropsch Synthetic Paraffinic Kerosene), ATJ-SPK (Alcohol-to-Jet Synthetic Paraffinic Kerosene), and Others), By Blending Capacity (5 to 30%, 30 to 50%, and Above 50%), By End Use (Commercial Aviation, Military Aviation, and Others), By Application (Fixed-Wing Aircraft and Rotary-Wing Aircraft), and Regional Forecast, 2025-2032

The global sustainable aviation fuel market size was valued at USD 1,845.2 million in 2024. The SAF market is projected to grow from USD 2,723.8 million in 2025 to USD 28,636.36 million by 2032, exhibiting a CAGR of 48% during the forecast period. North America dominated the sustainable aviation fuel market with a market share of .% in 2024.

Sustainable Aviation Fuel (SAF) acts as an alternative to traditional jet fuel. It is derived from non-petroleum feedstocks and plays a significant role in reducing emissions from air travel. Based on the production method and feedstock, SAF can be blended with conventional fuels at levels ranging from 10% to 50%. In 2024, the International Civil Aviation Organization (ICAO) reported that more than 360,000 commercial flights had utilized SAF across 46 airports, primarily in the U.S. and Europe.

Globally, aviation is responsible for approximately 2% of total carbon dioxide (CO2) emissions and accounts for 12% of emissions from the transportation sector. The ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) aims to limit the net aviation CO2 emissions to 2020 levels until 2035. Moreover, the international aviation sector has set an ambitious target to achieve net-zero carbon emissions by 2050.

The COVID-19 pandemic led to significant travel restrictions and lockdowns, resulting in a drastic reduction in flight operations and disrupted supply chain. As airlines began to recover from the pandemic, there was a renewed focus on sustainability and environmental responsibility, which helped the growth of the market. A comprehensive sustainable aviation fuel market analysis reveals that technological advancements and increased investments are expected to drive the growth of the market.

SUSTAINABLE AVIATION FUEL MARKET TRENDS

Corporate Sustainability Initiatives

Many airlines and aviation companies are increasingly integrating sustainability into their corporate strategies. They are investing in SAF as they have aimed for net-zero carbon emissions by 2050. This commitment will drive investment in SAF as it is a critical component of their sustainability plans. Moreover, the rise in focus on achieving these ambitious targets has encouraged partnerships between airlines and fuel producers. For instance, in November 2024, Neste and Air Canada entered a significant agreement for the supply of 60,000 tons (approximately 77.6 million liters) of Neste MY Sustainable Aviation Fuel, marking the first time that this fuel will be supplied to Canada. This initiative was made to support Air Canada's commitment to sustainability as it aims for SAF to comprise 1% of its estimated jet fuel usage by 2025. Therefore, such partnerships and agreements will foster the adoption of SAF and enhance the sustainable aviation fuel market growth.

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Sustainable Aviation Fuel (SAF) Market Growth Factors

Rising Demand for Alternative Fuels to Propel Market Growth

There is a rise in the awareness of climate change across the world and the urgent need to reduce greenhouse gas (GHG) emissions. The aviation industry contributes significantly to the global CO2 emissions. Thus, it is increasingly adopting more sustainable practices to reduce its emissions. SAF offers a cleaner alternative to conventional jet fuels, reducing emissions by up to 80% depending on the feedstock and production method used. Jet fuel consumption produces CO2 at a defined ratio (3.16 kilograms of CO2 per 1 kilogram of fuel consumed), regardless of the phase of flight. According to the IATA estimates, SAF could account for around 65% of reduction in emissions produced by the aviation industry to reach net-zero in 2050. And this transition needs a significant increase in production to meet demand. Therefore, the growing demand for sustainable aviation fuel is driven by increasing regulatory pressures and consumer preferences for greener travel options, prompting airlines to invest in SAF technologies.

Below is the table indicating the SAF required to achieve the goal of net-zero carbon dioxide (CO2) emissions by 2050. The long-term outlook of Sustainable Aviation Fuel is promising, with projections indicating substantial growth as more airlines commit to integrating this fuel.

Therefore, the demand for SAF is increasing to help airlines fulfill their commitment to achieving net zero emissions by 2050. Moreover, in late 2022, ICAO member states adopted a long-term global aspirational goal (LTAG) to achieve net zero carbon emissions from international aviation by 2050. The agreement aims to reduce emissions within the sector itself. Thus, the rise in demand for alternative fuels, such as SAF driven by environmental imperatives and corporate responsibility commitments will create a favorable environment for the growth of the SAF market in the aviation industry. Therefore, Sustainable Aviation Fuel market trends indicate a significant shift toward increased production capabilities and technological innovations.

SAF Mandates and Regulatory Initiatives to Accelerate Market Growth

Government policies play an essential role in the deployment of SAF. There has been a rise in the formulation of policies and incentives to accelerate SAF deployment. As SAF is in the early stages of development, mandates are adopted as a means to increase the production of this fuel and are complemented with incentive programs that facilitate innovation, expansion in production capacity, and unit cost reduction. Various countries across the globe are implementing SAF mandates to regulate the usage of this fuel in the aviation industry. For instance, in December 2024, the U.K. finalized a Sustainable Aviation Fuel mandate, which is set to take effect on January 1, 2025. This initiative aims to significantly reduce greenhouse gas emissions from the aviation sector and promote the use of greener fuels. According to this mandate, 2% of all jet fuel used in the U.K. will be sourced from sustainable aviation fuels starting in 2025. By setting clear targets for SAF usage, these mandates create a predictable demand for sustainable fuels, incentivizing producers to invest in SAF production facilities and technologies. This demand is essential for scaling up the production capabilities and reducing costs associated with SAF.

Moreover, subsidies for Sustainable Aviation Fuel (SAF) play a crucial role in promoting the development and use of lower-emission fuels in the aviation sector. Governments aim to make the production of SAF more economically viable, thereby encouraging more producers to enter the market. For instance, in May 2024, the Biden administration of the U.S. released a guidance on its Sustainable Aviation Fuel (SAF) subsidy program which allows corn-based ethanol to qualify for SAF subsidies, provided it is sourced from farms employing climate-friendly agricultural practices. Such subsidies are expected to stimulate the market’s growth during the forecast period.

In addition, regulatory bodies are increasingly implementing SAF mandates and regulatory initiatives that require airlines and fuel suppliers to incorporate a certain percentage of SAF into their fuel mix. For instance, the EU's ReFuelEU Aviation Regulation mandates a gradual increase in SAF usage, starting with 2% in 2025 and reaching 70% by 2050. Such mandates by various countries and regions will create a conducive environment for the development and adoption of sustainable aviation fuels, boosting the growth of the sustainable aviation fuel industry.

New Technologies for Making SAF to Act as Catalyst For Market Growth

New technologies for the production of Sustainable Aviation Fuel are acting as a catalyst for the market’s growth as they enhance production efficiency and reduce costs. The production of SAF is evolving beyond the widely used Hydroprocessed Esters and Fatty Acids (HEFA) technology, with several emerging technologies. For instance, in April 2024, Honeywell introduced innovative technologies aimed at enhancing the production of SAF with biomass. The company’s hydrocracking technology allows the conversion of biomass into SAF, producing fuel that is 90% less carbon-intensive than traditional fossil-based jet fuels. This technology increases SAF yield by 3-5% while enabling a cost reduction of up to 20% compared to conventional hydroprocessing methods.

Moreover, technologies, such as Alcohol-to-Jet and Fischer-Tropsch (FT) synthesis are expected to gain traction in the coming years. Companies are increasingly dedicating resources and establishing facilities to produce Sustainable Aviation Fuel (SAF) using alternative technologies, reflecting a significant shift in the aviation fuel landscape. For instance, in January 2024, LanzaJet officially opened the Freedom Pines Fuels facility in Soperton, Georgia, marking a significant milestone as the world’s first commercial production plant for ethanol-based alcohol-to-jet sustainable aviation fuel. The emergence of these diverse production technologies is essential for fueling the SAF market and meeting the increasing global demand driven by regulatory mandates and environmental concerns.

RESTRAINING FACTORS

High Cost of SAF and Limited Feedstock Availability to Stifle Market Growth

The high cost of Sustainable Aviation Fuel (SAF) and limited feedstock availability are significant restraints that are expected to hamper the growth of the sustainable aviation fuel market. According to the IATA, SAF can cost between two to seven times more than the traditional jet fuel, with prices around USD 2,500 per ton in 2023. This is approximately 2.8 times higher than the conventional aviation fuel prices. Such a substantial price difference creates a barrier for airlines that are highly sensitive to fuel costs. Aviation fuel expenses account for about 30-31% of their operating costs. Therefore, many airlines may feel hesitant to switch to SAF due to its high cost.

Moreover, SAF production facilities require significant capital investment, often running into hundreds of millions or even billions of dollars depending on the technology and scale. The complexity of the manufacturing process necessitates the use of advanced infrastructure and technology, which further drives up costs. SkyNRG estimates that the global Sustainable Aviation Fuel (SAF) capacity could reach approximately 250 million tons by 2050, provided that new pathways utilizing biomass feedstocks and green hydrogen are effectively developed and de-risked. To achieve this production level, 500 to 800 SAF facilities would be necessary, requiring a cumulative investment of around USD 1 trillion, with each facility costing about USD 2 billion. This translates to an average annual capital expenditure of USD 40 billion from 2025 to 2050, which is roughly 8% of the global annual upstream oil & gas capital expenditure incurred in 2019. The high costs associated with establishing these production facilities pose a significant challenge to the rapid growth of the market.

A significant portion of the SAF currently produced is derived from feedstocks, such as used cooking oils and animal fats, which have limited availability and are often diverted for biodiesel production. This competition for feedstocks can drive up prices and limit the quantity available for SAF production. Therefore, high cost of SAF combined with limited feedstock availability presents significant challenges that could stifle the sustainable aviation fuel market's growth.

Sustainable Aviation Fuel (SAF) Market Segmentation Analysis

By Type Analysis

Biofuel Held Largest Market Share in 2024 Due to Strong Push Toward Sustainability and Reduced Carbon Emissions

On the basis of type, the market is classified into biofuel and synthetic fuel.

The biofuel segment held the largest share of the Sustainable Aviation Fuel (SAF) market driven by its compatibility with the existing aircraft and infrastructure, which allows for easier integration compared to other fuel types, such as hydrogen or synthetic fuels. There is a strong global push to reduce greenhouse gas emissions and combat climate change which is encouraging airlines to adopt SAF to achieve these environmental goals. For instance, in September 2024, TotalEnergies and Air France-KLM signed a key agreement for the supply of up to 1.5 million tons of sustainable aviation fuel over the next decade, extending till 2035. This contract is one of the largest SAF purchase agreements for Air France-KLM to date and builds upon a previous memorandum of understanding signed in 2022, which initially covered 800,000 tons of SAF.

The synthetic fuel segment is expected to grow faster during the forecast period. The development of innovative production technologies, particularly the Fischer-Tropsch (FT) process, has made it possible to convert a wide range of feedstocks - including natural gas, coal, biomass, and municipal solid waste — into synthetic aviation fuels. Moreover, airlines are increasingly committing to sustainability goals by producing synthetic SAF to meet the growing demand for cleaner aviation fuels. For instance, in September 2024, Gevo, Inc. announced a definitive agreement to acquire the ethanol production plant and Carbon Capture and Sequestration (CCS) assets of Red Trail Energy, LLC for USD 210 million. This strategic acquisition is expected to significantly enhance Gevo's capabilities in producing Sustainable Aviation Fuel and further its commitment to carbon abatement.

By Technology Analysis

HEFA-SPK Segment to Hold Largest Market Share Due to Its Established Production Processes and Flexibility in Feedstock Use

On the basis of technology, the sustainable aviation fuel market is classified into HEFA-SPK (Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene), FT-SPK (Fischer-Tropsch Synthetic Paraffinic Kerosene), ATJ-SPK (Alcohol-to-Jet Synthetic Paraffinic Kerosene), and others. Others include HFS-SIP (Hydroprocessed Fermented Sugars to Synthetic Isoparaffins), Co-processing, Electro-fueled sustainable aviation fuel, and other technologies used to develop SAF.

The HEFA-SPK (Hydroprocessed Esters and Fatty Acids Synthetic Paraffinic Kerosene) segment is projected to remain dominant in the global sustainable aviation fuel (SAF) market due to the availability of diverse feedstocks, such as waste fats and oils and regulatory support promoting renewable fuels. There is also a rise in the development of low-carbon intensity feedstocks from waste oils which will drive the growth of the segment. For instance, in March 2024, Jet Zero Australia signed an agreement with AgroCommodities, a significant player in used cooking oil collection in Asia, to create a joint venture aimed at producing sustainable aviation fuel in Australia. This collaboration is designed to develop low-carbon intensity feedstocks to meet the increasing demand for renewable fuels. The agreement aims to source waste oils and cultivate non-edible crops for Hydrotreated Esters and Fatty Acids (HEFA) production.

ATJ-SPK (Alcohol-to-Jet Synthetic Paraffinic Kerosene) segment is estimated to record the highest CAGR during the forecast period. The development of advanced technologies, such as the PureSAFSM technology has expanded the range of alcohols that can be used as feedstocks for ATJ-SPK production. This technology allows the use of various alcohols (ethanol, propanol, butanol, and pentanol) either individually or in mixtures, enhancing flexibility and cost-effectiveness in SAF production. In addition, the ATJ method is being actively employed in both commercial production and experimental settings. For instance, in December 2023, a test flight was conducted demonstrating the conversion of methanol to SAF. This event took place in Dubai during the COP28 climate conference and involved collaboration among several key players, including Masdar, TotalEnergies, the UAE General Civil Aviation Authority, Airbus, Falcon Aviation Services, and technology licensor Axens.

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By Blending Capacity

30 to 50% Segment Held Largest Market Share in 2024 Due to Rapid Transition Toward Higher Use of SAF to Achieve Net Zero Targets

On the basis of blending capacity, the market is classified into 5% to 30%, 30% to 50%, and above 50%.

The 30% to 50% segment dominated the global Sustainable Aviation Fuel (SAF) market share in 2024. The segment’s dominance is attributed to the net-zero commitment taken by various airlines and airports. Many airlines are adopting sustainability as a core element of their business strategies, which includes increasing the use of SAF. For instance, in April 2023, Ryanair, Europe’s prominent airline, announced a significant expansion of its partnership with Neste, a leading supplier of sustainable aviation fuel. Starting April 1, 2023, Ryanair committed to powering 100% of its flights from Amsterdam Airport Schiphol (AMS) with a 40% SAF blend. The segment with a blending capacity of 30% to 50% is particularly attractive as it allows airlines to transition gradually toward higher SAF usage while maintaining operational reliability.

The above 50% segment is estimated to be the fastest-growing segment owing to regulatory support and government initiatives. Many governments are implementing stringent regulations aimed at reducing carbon emissions in the aviation sector. These regulations often encourage or mandate the use of higher blends of SAF, pushing airlines to adopt fuels that exceed 50% SAF content to comply with future emissions targets.

By End Use Analysis

Commercial Aviation Segment Held Largest Market Share in 2024 Due to Rising Awareness Of Sustainability and Environmental Effects of Traditional Jet Fuel

On the basis of end use, the market is classified into commercial aviation, military aviation, and others. Others include business and general aviation.

The commercial aviation segment dominated the global market in 2024 due to increasing awareness about sustainability and the environmental impact of traditional jet aviation fuel. There is a rise in the recognition of the aviation sector's impact on climate change, prompting both consumers and airlines to pursue more sustainable alternatives to traditional jet fuels. As passengers become more environmentally conscious, airlines are responding by integrating SAF into their operations.

The military aviation segment is estimated to be the fastest-growing segment owing to the rise in defense budget and increase in investment in sustainable technologies. Many countries are ramping up their defense spending, which includes investments in sustainable technologies. Moreover, military and commercial aviation companies are collaborating, which is expected to drive the development of SAF. For instance, in October 2024, Norwegian Airlines and the Norwegian Armed Forces participated in a significant initiative to promote the use of SAF at Ålesund Airport Vigra. This event marked a pivotal step in developing the SAF market in Norway, showcasing a collaborative effort to reduce carbon emissions in aviation. In addition, there is growing recognition of the importance of sustainability in defense operations. For instance, in August 2024, the Royal Air Force (RAF) made significant strides in integrating SAF into its operations, particularly with its Typhoon fighter jets and P-8A Poseidon submarine hunters. Such developments are expected to drive the growth of the sustainable aviation fuel market.

By Application Analysis

Fixed-Wing Aircraft Segment Held Largest Market Share Due to Supportive Governments Incentives and Subsidies

On the basis of application, the market is classified into fixed-wing aircraft and rotary-wing aircraft.

The fixed-wing aircraft segment dominated the global market in 2024. Various governments are providing incentives and subsidies for the development and use of SAF, encouraging airlines operating fixed-wing aircraft to adopt these fuels. Various fixed wing aircraft manufacturers are focused on developing and testing aircraft for the use of SAF to make a clear pathway for fixed-wing aircraft to operate on 100% SAF. For instance, in November 2024, Deutsche Aircraft and Pratt & Whitney Canada conducted test flights using a fully synthetic Fischer-Tropsch fuel in the D328® UpLift research aircraft. The synthetic Fischer-Tropsch fuel used in these flights can potentially reduce carbon emissions by up to 95% compared to conventional jet fuels.

The rotary-wing aircraft segment is estimated to be the fastest-growing segment during the forecast period. The use of helicopters in emergency services creates a stable demand for aviation fuel. Transitioning these operations to SAF can significantly reduce emissions generated from critical services. Moreover, the rise in partnerships between helicopter manufacturers, fuel suppliers, and regulatory bodies is fostering innovation and investment in SAF production tailored for rotary-wing aircraft. For instance, in February 2023, Air bp announced an ongoing supply of sustainable aviation fuel to the Austrian rescue helicopter operator, Christophorus Flugrettungsverein (CFV). The initial delivery of SAF was made in October 2022 at CFV's heliport in Innsbruck.

REGIONAL INSIGHTS

The global market is segmented on the basis of region into North America, Europe, Asia Pacific, the Middle East, Africa, and Latin America.

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North America accounted for largest market share in 2024, and is likely to remain dominant throughout the forecast period due to the stringent emission regulations and supportive government initiatives and incentives. The U.S. government has implemented various policies, including tax incentives and the Sustainable Aviation Fuel Grand Challenge, aiming to produce at least 3 billion gallons of SAF annually by 2030. Moreover, the presence of prominent SAF suppliers, such as Neste and Shell is expected to promote the adoption of SAF in the region. The Sustainable Skies Act, introduced in May 2021 by U.S. Congressman Brad Schneider, aims to significantly enhance the use of SAF in the aviation sector. This legislation is part of a broader effort to reduce greenhouse gas (GHG) emissions from air travel, which currently accounts for approximately 2.5% of global carbon emissions. Therefore, fuel producers are incentivized to invest in SAF technologies and infrastructure, which drives the growth of the market in North America during the forecast period.

Europe is increasingly progressing in the adoption of SAF which is supported by stringent regulations aimed at reducing carbon emissions. The European Union has set ambitious targets for SAF usage in aviation, including the requirement for a minimum share of e-kerosene by 2030. The ReFuelEU Aviation Regulation, enacted in 2023, highlights a significant step taken by the EU toward decarbonizing the aviation sector. This regulation establishes mandatory targets for the use of Sustainable Aviation Fuel as a blend with conventional jet fuel, aiming to reduce CO2 emissions from air travel. Such commitments to reduce carbon emissions in the aviation industry are expected to act as a booster for the Sustainable Aviation Fuel (SAF) market growth.

Asia Pacific is witnessing significant growth potential due to increasing air traffic and environmental concerns. Countries, such as Japan and Australia are beginning to invest in SAF production technologies. For instance, in 2023, the Airbus H125 helicopter operated by State Grid Space Technology Co., Ltd (SGST) completed the first helicopter flight using Sustainable Aviation Fuel (SAF) in China. This flight demonstration took place at the Hefei Shiwan Airport and utilized a blend of 40% SAF provided by China National Aviation Fuel (CNAF). Various countries are increasingly implementing eco-friendlier practices which encourages more developments in the use of sustainable fuels in aviation.

Furthermore, research into alternative fuels is gaining traction in Latin America and Africa, where there is potential for using agricultural residues and waste oils for SAF production. Various countries in Latin America are implementing mandates to encourage and regulate the adoption of sustainable aviation fuel. For instance, in October 2024, the Brazilian government approved the “Fuel of the Future” law, which promotes the production and use of sustainable aviation fuels, positioning Brazil as a leader in global aviation decarbonization. In addition, the International Air Transport Association (IATA) has urged South Africa to prioritize the development of SAF, highlighting the country's potential to produce between 3.2 and 4.5 billion liters annually from abundant feedstocks, such as sugarcane by-products and biomass waste. Such push toward the use of SAF through several strategic initiatives and advocacy efforts is anticipated to fuel the growth of the market.

KEY INDUSTRY PLAYERS

Key Players Focus On Development of Technologically Advanced Products and Acquisition Strategies to Drive Growth

Prominent market players are prioritizing the advancement of their product offerings. The development of a diverse range of solutions and heightened investment in research & development are key factors contributing to the market dominance of these players. The market is led by several players operating in this industry. Major players are aiming to invest heavily in SAF production technologies and facilities to increase their sustainable aviation fuel (SAF) market share. They are working on innovative projects that capture CO2 and convert it into usable materials, thereby aligning with their sustainability goals.

LIST OF TOP SUSTAINABLE AVIATION FUEL (SAF) COMPANIES:

• Neste (Finland)


• World Energy (U.S.)


• Gevo, Inc. (U.S.)


• Alder Fuels (U.S.)


• SkyNRG (Netherlands)


• Air BP (U.K.)


• Shell Aviation (Netherlands)


• TotalEnergies (France)


• Vitol Aviation (Switzerland)


• LanzaTech (U.S.)


• Fulcrum Bioenergy (U.S.)

KEY INDUSTRY DEVELOPMENTS:

September 2024- TotalEnergies and Air France-KLM signed a key agreement for TotalEnergies to supply up to 1.5 million tons of Sustainable Aviation Fuel (SAF) over a 10-year period until 2035. This contract represents one of the largest SAF purchase agreements for Air France-KLM to date, reinforcing the airline's leadership in SAF usage, accounting for 17% and 16% of global SAF production in 2022 and 2023, respectively.

August 2024- SkyNRG, a prominent developer of sustainable aviation fuel, partnered with Skellefteå Kraft, one of Sweden's largest renewable energy producers, to establish Project SkyKraft. This initiative aims to develop a plant near the Skellefteå Harbor that will produce electro Sustainable Aviation Fuel (eSAF) using renewable energy sources and biogenic CO2.

May 2024- Singapore Airlines Group entered a significant agreement with Neste to purchase 1,000 tons of neat sustainable aviation fuel. Neste will blend the neat SAF with conventional jet fuel and deliver it to Changi Airport's fuel hydrant system in two batches—one in the second quarter of 2024 and another in the fourth quarter of the same year.

April 2024- Boeing announced a contract with Neste to purchase 7.5 million gallons (over 22,700 tons) of blended Neste MY Sustainable Aviation Fuel (SAF) in 2024. This purchase is part of a larger agreement for 9.4 million gallons of blended SAF.

April 2023- Neste and Viva Aerobus, a Mexican ultra-low-cost airline, signed a purchase agreement for one million liters (approximately 264,000 gallons) of Neste MY Sustainable Aviation Fuel™ (SAF). This agreement was part of Viva Aerobus' commitment to reducing its carbon emissions and enhancing sustainability in its operations.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on important aspects, such as key players, types, technologies, and applications depending on various regions. Moreover, it offers deep insights into the market trends, competitive landscape, market competition, product pricing, and market status and highlights key industry developments. Also, it encompasses several direct and indirect factors that have contributed to the growth of the global market in recent years.

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