Sustainable Aviation Fuel Market - By Fuel Type (Biofuel, Power-to-Liquid, Gas-to-Liquid, Hydrogen Fuel), By Technology (HEFA-SPK, FT-SPK, HFS-SIP, ATJ-SPK, CHJ), By Blending Capacity, By Aircraft Type & Forecast 2024 – 2032

Sustainable Aviation Fuel Market Size

Sustainable Aviation Fuel Market was valued at USD 952.6 million in 2023 and is estimated to register a CAGR of over 45% between 2024 & 2032 owing to the escalating corporate sustainability initiatives. Many airlines and aviation companies are increasingly adopting sustainability as a core element of their corporate strategies. For instance, the aviation industry's pursuit of achieving net-zero carbon emissions by 2050 considers sustainable aviation fuel (SAF) a pivotal facilitator. GE Aerospace reported that it has conducted tests on 10 distinct engines produced by itself and its joint ventures, exclusively using 100 percent SAF since 2016. In the latest trial in November 2023, an Emirates A380 showcased the use of pure SAF in one of its four Engine Alliance GP7200 powerplants during a demonstration flight departing from Dubai. Simultaneously, the remaining three engines operated on conventional jet fuel.

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Sustainability initiatives, including the use of sustainable aviation fuels, help these companies align with growing consumer preferences for environmentally responsible practices. As more companies commit to sustainability goals and seek to achieve carbon neutrality, the demand for sustainable aviation fuel is expected to rise.
 

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Technological innovations and investments will play a key role in defining the SAF market outlook. Ongoing R&D efforts, in line with increased investments in sustainable aviation fuel production technologies, have been driving advancements in the sector. Quoting an instance, in December 2023, in a seed funding round, Metafuels, a start-up focused on sustainable aviation fuel, successfully raised $8 million. This Swiss climate tech company is dedicated to creating cleaner fuels compatible with current aircraft technology. The funding was led by Energy Impact Partners and Contrarian Ventures. Metafuels' sustainable aviation fuel, known as "aerobrew," is produced by transforming green methanol into electro-sustainable aviation fuel (eSAF).

Financial incentives, tax credits, and regulatory frameworks encouraging the aviation industry to invest in sustainable practices are expected to drive increased demand for SAF. Such measures can act as catalysts, fostering innovation and accelerating the transition towards a more sustainable and environmentally conscious aviation sector.

However, the cost disparity between SAF and conventional jet fuels could significantly impact the SAF industry. Producing SAF can be more expensive due to factors such as feedstock costs, production technology, and economies of scale. The aviation industry has been hesitant to embrace SAF on a large scale, primarily due to concerns about economic viability and the potential impact on ticket prices.

Sustainable Aviation Fuel Market Trends

Government incentives and regulations are poised to play a pivotal role in propelling the sustainable aviation fuel (SAF) market forward. With a heightened global focus on reducing carbon emissions, many governments are introducing policies supporting the production and adoption of SAF. Citing an example, in December 2023, the Biden administration revealed the blueprint for its initiative to address a challenging objective in the battle against climate changeenhancing the environmental sustainability of air travel. The plan involves offering subsidies to promote the advancement of "sustainable aviation fuels" derived from agricultural products, facilitating the use of biofuels crafted from soybeans, animal fat-derived diesel, and traditional ethanol for powering jet engines. This move aims to foster the development and adoption of eco-friendly alternatives within the aviation industry.

Innovations in feedstock sourcing, refining processes, and production scalability have contributed to making sustainable aviation fuels more economically viable. As technology continues to improve, the cost competitiveness of sustainable aviation fuels could increase, making them more attractive to the aviation industry.

Sustainable Aviation Fuel Market Analysis

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Based on fuel type, the market is divided into biofuel, power-to-liquid, gas-to-liquid, and hydrogen fuel. In 2023, the biofuel segment held a market share of over 80%. The adoption of biofuel in the aviation sector is promoted by the imperative to reduce carbon emissions and mitigate environmental impact. Biofuel, derived from organic materials like plant-based feedstocks and waste, offer a more sustainable alternative to traditional aviation fuels. Additionally, increasing regulatory pressure and global initiatives to combat climate change have incentivized airlines to integrate biofuels into their operations. As advancements in biofuel technology progress, and with growing consumer demand for eco-friendly practices, the aviation industry is increasingly motivated to embrace biofuels as a key strategy for achieving carbon reduction goals.

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Based on aircraft type, the market is categorized into commercial aviation, military aviation, business & general aviation, and unmanned aerial vehicle. In 2023, the commercial aviation segment accounted for a market share of around 74%. The popularity of Sustainable Aviation Fuel (SAF) in commercial aviation stems from the industry's commitment to mitigating climate change and achieving sustainability targets. SAF significantly reduces greenhouse gas emissions compared to traditional aviation fuels, aligning with global efforts to combat climate change. As environmental awareness grows, airlines face increasing pressure to adopt greener practices, and SAF emerges as a viable solution. Furthermore, governmental support, incentives, and the pursuit of carbon-neutral goals have accelerated the adoption of SAF, making it a key driver for environmentally responsible aviation practices.

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North America dominated the sustainable aviation fuel market with a major share of around 45% in 2023. North America sustainable aviation fuel (SAF) industry is experiencing robust growth due to several key factors. Governments and regulatory bodies are actively promoting sustainable practices, offering incentives, and creating a conducive environment for SAF development. Major airlines in the region are increasingly committing to reducing their carbon footprint, driving demand for SAF. Additionally, growing investor interest and strategic partnerships are injecting capital into SAF projects. As consumer awareness of environmental issues rises, there's a mounting pressure on the aviation sector to embrace greener alternatives, further propelling the growth of the SAF industry in North America.

Sustainable Aviation Fuel Market Share

Neste and Shell PLC hold a significant market share in the sustainable aviation fuel market.  Neste emphasizes the use of renewable feedstocks, such as waste and residues, for the production of sustainable aviation fuel. This strategy aligns with environmental goals and contributes to the circular economy.

Shell PLC adopts an integrated energy company approach, focusing on a diverse energy portfolio that includes sustainable aviation fuel. This strategy positions Shell to meet the evolving energy needs of the aviation sector.

Sustainable Aviation Fuel Market Companies

Major players operating in the sustainable aviation fuel industry are

• Aemetis, Inc.
• Alder Fuels
• Fulcrum BioEnergy Inc.
• Gevo Inc.
• LanzaJet
• Neste
• Northwest Advanced Bio-Fuels, LLC
• Preem AB
• Red Rock Biofuels
• Shell PLC
• SkyNRG BV
• World Energy

Sustainable Aviation Fuel Industry News

• In December 2023, Mangalore Refinery and Petrochemicals Ltd (MRPL) announced produce sustainable aviation fuel (SAF) within the next two years to support the government’s target of achieving one percent blending. The company is also establishing a 20-kilolitre-per-day plant to showcase indigenously developed technology.

The sustainable aviation fuel market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments

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Market, By Fuel Type

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

Market, By Technology

• HEFA-SPK
• FT-SPK
• HFS-SIP
• ATJ-SPK
• CHJ

Market, By Blending Capacity

• Below 30%
• 30% to 50%
• Above 50%

Market, By Aircraft Type

• Commercial Aviation
• Military Aviation
• Business & General Aviation
• Unmanned Aerial Vehicle

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia

• Latin America
  • Brazil
  • Mexico
  • Argentina

• MEA
  • UAE
  • South Africa
  • Saudi Arabia

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