Global SAF Market Outlook 2028

Global SAF Market Overview

• The Sustainable Aviation Fuel (SAF) market is valued at approximately USD 1169.8 million, driven by growing pressure to reduce carbon emissions and the aviation industry's commitment to reaching net-zero targets. Key factors propelling market growth include supportive government policies, technological advancements in fuel production, and increasing airline adoption of SAF as a critical strategy for meeting emissions reduction goals. The rising demand for renewable energy solutions also contributes to market expansion, as the industry seeks sustainable alternatives to fossil fuels in aviation.

• Countries like the United States, the United Kingdom, and France dominate the SAF market due to their established aviation industries and favorable regulatory frameworks. These regions benefit from strong governmental support, including financial incentives and mandates for airlines to increase SAF usage. Moreover, their robust infrastructure and ongoing investments in research and development have positioned them as leaders in the global SAF market. These nations' initiatives toward achieving decarbonization goals also play a crucial role in their market dominance.
• The U.S. Inflation Reduction Act, passed in 2022, allocates $300 million in tax credits specifically for SAF production facilities. Under the act, producers of SAF can claim a credit of $1.25 per gallon, with an additional $0.01 per gallon available for each percentage point of emission reduction achieved. This financial support has accelerated SAF production across the U.S., with over 10 new bio-refineries expected to open by 2025. As a result, the U.S. aims to increase SAF production to 3 billion gallons annually.

Global SAF Market Segmentation

By Feedstock Type: The SAF market is segmented by feedstock type into bio-based feedstocks, synthetic fuel, and hydroprocessed esters and fatty acids (HEFA). Bio-based feedstocks, including used cooking oil and agricultural waste, hold a dominant share in the market due to their sustainability and lower carbon emissions. Bio-based feedstocks are favored by both airlines and regulators, as they offer a practical solution to reduce aviations environmental impact. Furthermore, advancements in the production technology of bio-based fuels have made them increasingly cost-effective, further driving their adoption.

By Region: The SAF market is regionally segmented into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. North America is the dominant region in the SAF market, primarily driven by strong government policies and significant investments in renewable energy. The region's commitment to reducing carbon emissions, coupled with its advanced technological capabilities, supports the widespread adoption of SAF. North American airlines are also leading the charge in SAF adoption as they seek to align with government-mandated carbon reduction targets.

Global SAF Market Competitive Landscape

The global SAF market is dominated by a few key players who play a significant role in shaping market dynamics through technological innovations, strategic partnerships, and government collaborations. These companies have extensive production capabilities and continue to invest in scaling up SAF manufacturing to meet the growing demand.

Global SAF Market Analysis

Market Growth Drivers

• Global Agreements on Climate Change: Global agreements such as the Kyoto Protocol and the ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) are critical in driving the SAF market. Under CORSIA, airlines are required to stabilize carbon emissions, leading to increased SAF adoption. The global aviation industry contributes around 915 million metric tons of CO2 annually, which reinforces the need for SAF as a decarbonization strategy. These agreements create a demand for alternative fuels like SAF, pushing the market forward.
• Expanding Renewable Energy Resources: The expansion of renewable energy resources is enhancing the feasibility of SAF production. According to the International Renewable Energy Agency (IRENA), global renewable energy capacity reached 3,372 gigawatts in 2023, enabling more bio-refineries to leverage clean energy for SAF production. With renewable energy becoming more accessible, the cost-effectiveness and scalability of SAF increase, addressing one of the primary concerns in the aviation industry. These resources are essential for reducing the carbon footprint of SAF production.
• Increased Focus on Carbon Emission Reduction: The focus on reducing carbon emissions is a key driver for the Sustainable Aviation Fuel (SAF) market. With strict international agreements like the Paris Agreement, countries are under pressure to meet their carbon reduction goals. The aviation industry is increasingly turning to SAF due to its ability to significantly reduce emissions compared to conventional jet fuel. SAF is being prioritized as a central component in the aviation sector's sustainability efforts, helping to address the growing demand for cleaner, more environmentally friendly fuel options in line with global carbon reduction targets.

Market Challenges

• Scalability Issues in SAF Production: The production of SAF faces significant scalability challenges due to limited feedstock availability. Current feedstocks, such as used cooking oils and agricultural residues, are insufficient to meet rising demand. Additionally, the dependency on first-generation biofuels limits the potential for large-scale production. Addressing these issues is essential to enable SAF to meet future demand and contribute meaningfully to reducing aviation emissions. Expanding the range of viable feedstocks and improving production technologies will be critical for scaling up SAF production effectively.
• Limited Supply Chain Infrastructure: The SAF market faces logistical challenges due to underdeveloped supply chain infrastructure. Limited availability of infrastructure for SAF distribution restricts its accessibility, and transportation and storage challenges further complicate the process. These issues increase the overall cost of SAF and create significant barriers to its widespread adoption. Improving supply chain infrastructure will be crucial for enhancing SAF's accessibility and reducing costs, facilitating its integration into the aviation fuel mix on a larger scale.

Global SAF Market Future Outlook

Over the next five years, the global SAF market is expected to witness robust growth, driven by increased adoption by airlines and supportive regulatory frameworks. Governments across the globe are establishing SAF mandates to reduce carbon emissions, and airlines are making substantial investments in SAF to meet their decarbonization goals. Advancements in fuel production technologies and innovations in feedstock utilization are likely to further drive market expansion. Additionally, strategic partnerships between SAF producers and airlines will enhance fuel availability and promote cost competitiveness.

Market Opportunities:

• Power-to-Liquid Technology: Power-to-liquid (PtL) technology is emerging as a critical trend in SAF production. PtL allows the conversion of electricity, derived from renewable sources like wind and solar, into liquid synthetic fuels. Germany has been a leader in PtL development, with a 200 million investment in PtL facilities in 2023. The technology can produce up to 1 million liters of synthetic SAF annually, offering an alternative to bio-based fuels. By 2024, over five countries, including Norway and the Netherlands, have adopted PtL technology in their SAF production strategies.
• Bio-based Feedstocks: The shift toward bio-based feedstocks for SAF production has gained significant momentum. According to the U.S. Department of Agriculture, global biomass availability for fuel production increased to 160 million tonnes in 2023. Advanced biofuels like waste oils, agricultural residues, and non-food crops are now the primary feedstocks for SAF. The European Union has set a target of 2 million tonnes of SAF produced from bio-based feedstocks by 2025. The growing reliance on these renewable resources is a key trend in ensuring the long-term sustainability of SAF.