Sustainable Aviation Fuel Market Size to Surge USD 9788.87 million, at a 60.8% CAGR | Continuous Focus on Reducing Carbon Footprints Presents Opportunities

Growing concern about weather change is driving up demand for environmentally friendly aviation fuel

PUNE, India, April 10, 2023 /PRNewswire/ -- Exactitude Consultancy, the market research and consulting wing of Ameliorate Digital Consultancy Private Limited has completed and published the final copy of the detailed research report on the Sustainable Aviation Fuel Market.

The global Sustainable Aviation Fuel Market was valued at USD 84.70 million in 2022, and is projected to reach USD 9788.87 million by 2029, registering a CAGR of 60.8% from 2023 to 2029.

Sustainable Aviation Fuel (SAF) is a fuel made from renewable resources or waste that satisfies environmental standards. The fuel can be made from a variety of renewable materials, including cooking oil, carbon dioxide captured from the air, and forestry and agricultural waste. To cut emissions, it can be blended with any fossil aircraft fuel. Sustainable aviation fuel can be introduced with no modifications to the aircraft or infrastructure, making it a drop-in fuel. Using sustainable, high-quality aviation fuel can significantly cut carbon dioxide pollution. Emission levels from the production, dissemination, transportation, and combustion of sustainable jet fuels are roughly 75% lower than those from fossil jet fuels. The potential for oil & gas refineries to integrate SAF technologies is manifold. The adoption of renewable aviation fuel helps reduce the emission of harmful particulates and sulfur by 90% and 100%, respectively.

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Recent Developments

• February 2023- Frederic Combes, vice president of Airbus India and South Asia, stated that Airbus is willing to establish an ecosystem that promotes Sustainable Aviation Fuel (SAF) to decarbonize the aviation industry.
• February 2023- Boeing agreed to purchase 5.6 million gallons (21.2 million liters) of blended sustainable aviation fuel (SAF) from Neste, the world's largest SAF producer, to support its U.S. commercial operations through 2023. These contracts significantly increase the company's sustainable aviation fuel acquisitions over the prior year.

Market Dynamics

Global Sustainable Aviation Fuel Market Drivers:

• Growing Government and Organizational Efforts to Reduce Carbon Emissions

Around the globe, numerous governments and business associations are working to reduce carbon emissions. Over the following few years, these entities established goals to achieve lower or zero emissions. In the 2015 Paris Agreement, 156 nations decided to alter their growth trajectories in favour of sustainability. These countries intended to keep temperatures to less than 2°C above pre-industrial levels. Global carbon dioxide emissions must decrease by 45 percent from 2010 levels by 2030 and attain zero emissions by 2050 in order to meet these goals.

Furthermore, to reduce world emissions in half by 2030, more than 70 countries, 1,200 companies, 1,000 towns, 1,000 schools, and 400 financial institutions have vowed to take strict, immediate action. One important component in achieving these objectives is sustainable aircraft fuel. SAF has a lifetime emission reduction of up to 80%. Over the anticipated time, these factors will fuel market expansion.

• Increasing Number of Passengers Using Air Transportation

The number of people using aeroplanes has been steadily rising. The number of passengers on scheduled flights increased from 4.2 billion in 2018 to over 4.5 billion in 2019—a 3.6 percent increase—according to the International Civil Aviation Organization and World Air Transport Statistics. In comparison, there were 38.3 million departures in 2019, a 1.7 percent increase. Additionally, compared to the prior year, the passenger traffic grew by 4.9 percent, totaling 8,686 billion revenue passenger kilometres.

Additionally, more flights are operated each year as a result of the rise in aviation travel. As more people use aeroplanes to travel, airlines are growing their business by increasing the fleet of aircraft and the number of flights on particular routes. The demand for aviation fuel is increased by the increased capability of airlines. Furthermore, because sustainable aircraft fuel is more effective than conventional aviation fuel, it can meet the rising demand from airlines. As a result, market development is aided by the rising passenger volume and high efficiency of sustainable aviation fuel.

Global Sustainable Aviation Fuel Market Restraint:

• Higher Costs Associated

The cost of sustainable aviation fuels is one of the major concerns for the market. Currently, the cost of sustainable jet fuel is four to five times that of regular jet gasoline. As a result, a number of carriers favour purchasing sustainable aviation fuel in smaller quantities. Because of this, only a very small amount of sustainable aviation fuel is created globally. To scale it, the cost of sustainable aircraft fuel must be decreased. In addition, the cost of feedstock, yields, and plant capital recovery are important elements that raise the price of sustainable aviation fuel altogether.

In addition, fats, oils, and greases are used as the raw material for sustainable aviation fuel, which is presently insufficient in volume to meet demand. As a result, the cost of sustainable aircraft fuel is rising. Additionally, by passing on the relative expense of blending sustainable aviation fuel with jet fuel to customers, airlines are able to increase ticket prices. According to the EU plan, blending 63% sustainable aviation fuel with A1 Jet Fuel would result in an increase in ticket costs of about USD 120 for a trip from Amsterdam to New York. This hinders the market's expansion by discouraging airlines from using sustainable aviation fuel for their planes.

Global Sustainable Aviation Fuel Market Opportunities:

• Government Initiatives to Promote the Adoption of Sustainable Aviation Fuel 

Several governments worldwide are formulating new regulations to promote the use of sustainable aviation fuel to reduce greenhouse gas emissions and achieve emission targets. For instance, the United States government passed the Sustainable aircraft Fuel Act, which promotes the creation, use, and distribution of sustainable aircraft fuel. For projects in the United States to create, transport, blend, and store sustainable aviation fuel, the measure allots USD 1 billion over five years.

Similarly, the European Commission adopted the Sustainable and Smart Mobility Strategy in December 2020 to boost the acceptance of sustainable aviation fuels the increased EU climate target for 2030 and the EU's EU's goal of climate neutrality can both be accomplished with the aid of sustainable aviation fuels. In order to promote the use of sustainable aircraft fuel, the E.U. also updated the Energy Taxation Directive. The participants in the market for sustainable aviation fuel are likely to benefit from growth possibilities provided by such government initiatives.

Report coverage & details:

Sustainable Aviation Fuel Market: Key Players

• Northwest Advanced Bio-Fuels, LLC.
• Fulcrum BioEnergy, Inc.
• Red Rock Biofuels
• Aemetis, Inc.
• OMV Aktiengesellschaft
• TotalEnergies SE

Key Market Segments: Sustainable Aviation Fuel Market

Sustainable Aviation Fuel Market By Fuel Type, 2023-2029, (Usd Million) (Thousand Liter)

• Biofuel
• Hydrogen Fuel
• Power To Liquid Fuel
• Gas To Liquid Fuel

Sustainable Aviation Fuel Market By Biofuel Manufacturing Technology Size, 2023-2029, (Usd Million) (Thousand Liter)

• Ft-Spk
• Hefa-Spk
• Atj-Spk
• Hfs-Sip
• Chj

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Regional Dominance:

North America is expected to expand at a CAGR of 60.94% during the forecast period, making it the largest shareholder in the global market for sustainable aviation fuel. The market for sustainable aviation fuel in North America is driven by demand from industrialised nations like the United States and Canada. Some of the world's largest aviation businesses are found in these nations. Some of the top airlines in the globe are based in North America. Airlines with North American headquarters and significant area presences include American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines. Additionally, the existence of these businesses in North America increases the demand for sustainable aviation fuel in the area.

Europe is expected to grow at a CAGR of 59.88%. The increased passenger traffic flying to and from Europe is what is causing the market for sustainable aviation fuel in Europe to expand. Additionally, a large number of tourists travel to Europe each year as it is one of the world's top tourist locations. According to the World Air Transport Statistics published by the International Air Transport Association, in 2021, scheduled passenger and cargo travel in Europe made for about 23.7% of the global total. Furthermore, Europe is responsible for 2.3% of internal scheduled passenger traffic and over 21% of all scheduled passenger traffic worldwide. Due to the increased passenger volume, there are also more flights to and from Europe. This contributes to the expansion of the European market. Europe is also home to some of the leading tourist destinations in the world. Countries such as France, Italy, Spain, Austria, and many others have some of the most popular tourist spots in the world. In addition, many tourists visiting Europe travel by air, driving the aviation industry in the region. This further augments the demand for sustainable aviation fuel in Europe.

Asia-Pacific is anticipated to experience substantial growth. The Asia-Pacific market for sustainable aviation fuel is mainly driven by the demand for air cargo transport throughout the region. A number of nations, including China, Taiwan, Thailand, and Vietnam, export a substantial amount of goods to other countries. In the Asia-Pacific region, top passenger and cargo airlines can be located. China Southern Airlines, China Eastern Airlines, Air China, Korean Air, and Cathay Pacific Airways are among the airlines with a sizable regional footprint in the Asia Pacific. Additionally, the existence of these businesses in the Asia-Pacific region increases the region's desire for environmentally friendly aviation fuel. The use of sustainable aviation fuel is growing among major carriers in the Asia-Pacific region. For instance, All Nippon Airways agreed with Neste to procure sustainable aviation fuel. Similarly, using biofuels, Cathay Pacific implemented the Carbon Offsetting and Reduction Scheme for International Aviation. Such efforts by airlines are anticipated to boost the growth of the sustainable aviation fuel market in the Asia-Pacific.

Latin America, the Middle East, and Africa make up RoW. The market for sustainable aircraft fuel in RoW is primarily driven by demand from Middle Eastern nations. Some of the biggest aviation industries are found in nations like Qatar and the UAE. The International Air Transport Association's World Air Transport Statistics show that in 2021, the Middle East accounted for roughly 10% of all scheduled passenger and cargo travel worldwide. Comparatively, in 2021, Latin America's share of global scheduled passenger and cargo travel was 4.3%. The Middle East is a hub for some of the leading airlines in the world. In addition, aviation companies such as Emirates, Qatar Airways, and Turkish Airlines are all headquartered in the Middle East and have a solid regional presence. The presence of these companies in the Middle East augments the region's demand for sustainable aviation fuel.

Segment landscape in the Sustainable Aviation Fuel Market

The surge in the Adoption of Biofuels

The worldwide market for sustainable aviation fuel has been divided into three fuel categories: biofuel, power-to-liquid, and gas-to-liquid. In 2021, the biofuel industry had a 95.7% market share, which was the largest share. It is anticipated that the market will continue to rule during the forecast era. Biomass, which includes plant and animal waste, is used to create biofuels in both direct and indirect ways. The majority of the basic materials used to make biofuels come from traditional natural biomass, like fuelwood, charcoal, and animal dung. They may come from crops, such as common sustenance plants or unique energy crops. Additionally, forestry, farming, fishery, and municipal waste items can be used to make biofuels. These fuels can potentially deliver the performance of petroleum-based jet fuels but with a fraction of their carbon footprint.

A rise in Demand for HEFA-SPK Technology

The market has been divided into four categories based on technology: HEFA-SPK, FT-SPK, HFS-SIP, ATJ-SPK, and power-to-liquid. In 2021, the HEFA-SPK segment held a 95.3% share of the worldwide market. The HEFA-SPK pathway utilises a fatty feedstock, such as vegetable oils or waste fats, which first goes through an oxygenation process and then is added to so that the fatty compounds can be broken down into hydrocarbons. Further processing transforms these fatty compounds into a blend of different liquid fuels that can be mixed up to 50%.

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