2025 Sustainable Aviation Fuel (SAF) Market Outlook
SkyNRG and ICF have jointly released the "2025 Sustainable Aviation Fuel (SAF) Market Outlook". This report aims to analyze the current state and future trajectory of the SAF industry. It highlights SAF's critical role in decarbonizing aviation, examines regional supply and demand trends, and identifies key challenges and opportunities for scaling production. Building on previous editions, this report extends its analysis to 2050, emphasizing the need for diversified production pathways and robust policy frameworks to achieve long-term sustainability goals.
1. Current Market Status
Production Scale: Driven by mandated policies effective in 2025 in the EU and UK, SAF production doubled from 2023 to reach 1 million tonnes (Mt) in 2024.
Industry Commitment: Over 60 airlines have committed to using 10% SAF by 2030, representing demand of approximately 13 Mt, demonstrating strong industry momentum.
Challenges: Policy uncertainty (e.g., US 45Z tax credit duration), trade dynamics, and short-term market volatility have led to project delays or cancellations. Hydroprocessed Esters and Fatty Acids (HEFA) technology accounts for 82% of announced capacity, but reliance on limited feedstocks like used cooking oil (UCO) risks a supply gap post-2030.
2. Demand Forecast
2030: Global SAF demand is projected at 15.5 Mt under the "Current Trends" scenario, with 4.4 Mt driven by mandates (e.g., EU, UK) and 11.1 Mt by voluntary targets and incentives.
2050: Under current trends, demand could reach 196 Mt (45% blend rate). With accelerated policy implementation, demand could increase to 282 Mt (64% blend rate), corresponding to a 51% reduction in aviation CO₂ emissions.
Regional Highlights:
EU/UK: Policies drive demand to 0.9 Mt in 2025. EU demand could reach 36 Mt by 2050, with synthetic SAF sub-targets gradually increasing.
US: Policy ambiguity (e.g., SAF Grand Challenge, state-level policies) may result in 2030 demand ranging between 5 Mt to 9.1 Mt, with federal policy continuity uncertain.
Asia: 2030 demand estimated at 3.7 Mt. China accounts for 45% of regional capacity and has the potential to become an export hub due to low-cost feedstock advantages.
3. Supply and Capacity
Announced Capacity: Global planned capacity reaches 18.1 Mt by 2030, but project delays in the EU, US, and elsewhere due to cost pressures create uncertainty about actual deployment.
HEFA Dominance Risk: 82% of capacity relies on HEFA technology. Global availability of its feedstocks (e.g., waste oils) may be insufficient to meet demand post-2030, creating a "tipping point".
Future Gap: A supply gap of 26 Mt is anticipated between 2030-2035, requiring advanced technologies like Power-to-Liquid (e-SAF) and Fischer-Tropsch (FT) to fill it.
Regional Insights:
EU/UK: Potential supply surplus in 2025 due to concentrated capacity ramp-up. e-SAF capacity (needing 0.6 Mt by 2030) lags policy requirements.
US: 61% of capacity is HEFA-based, 24% relies on corn ethanol. Imported feedstocks (e.g., Chinese UCO) are threatened by trade friction.
Asia: Capacity reaches 5 Mt by 2030 (China 45%), but 95% still uses HEFA technology, with slow deployment of advanced pathways.
4. Beyond HEFA: Pathways to Scale
The report models post-2030 supply under four scenarios:
Non-Waste Growth: Reliance on crop-based feedstocks (e.g., soybean oil) risks food market distortion, achieving only 54% average emissions reduction by 2050.
Supply Stagnation: Policy inaction prevents advanced technology commercialization, limiting SAF scale and forcing reliance on carbon offsets for emission reductions.
Expected Growth: Synergy between waste, biomass, and e-SAF could abate 432 Mt CO₂ by 2050, requiring policies setting HEFA feedstock limits.
Full Potential: 100% fossil fuel replacement (abating 1.1 Gt CO₂) requires global cooperation to scale green hydrogen and carbon capture technologies.
Research Conclusions
SAF is central to aviation decarbonization, but over-reliance on HEFA risks a supply crisis post-2030. Long-term success requires focus on:
Policy Coordination: Strengthen mandates (e.g., EU's 2.8% SAF blend by 2030), set sub-targets for advanced SAF (e.g., UK's 0.5% e-SAF by 2030), and reduce investment risk via revenue certainty mechanisms (e.g., UK's RCM).
Technology Diversification: Accelerate commercialization of pathways like e-SAF and FT. e-SAF capacity planning (e.g., EU projects FID by 2026) is critical before 2030.
Global Collaboration: Align regional strategies (e.g., UCO collection in Asia, vegetable oil supply from Latin America) to unlock feedstock potential and avoid market fragmentation.
The 2025 SAF Market Outlook calls on industry, governments, and investors to accelerate action, driving the SAF market towards a sustainable and resilient transformation to ensure aviation achieves its 2050 net-zero target.