Energy and Power

Sustainable Aviation Fuel Market is Expected to Reach USD 18,460.4 Million by 2031

Apr 2024

Energy and Power

As per the report published by Kings Research, the global Sustainable Aviation Fuel Market was valued at USD 1,169.8 million in 2023 and is projected to reach USD 18,460.4 million by 2031, growing at a CAGR of 42.11% from 2024 to 2031.

The sustainable aviation fuel market is poised to experience exponential growth due to the global commitment to decarbonize the aviation sector and combat climate change. This burgeoning market is characterized by dynamic shifts driven by a combination of regulatory mandates, technological innovation, and evolving consumer preferences. Regulatory interventions are playing a pivotal role in shaping the SAF market landscape, with governments worldwide implementing policies, incentives, and targets to promote the adoption of sustainable aviation fuels. These measures, ranging from blending mandates to carbon pricing mechanisms, are creating a conducive environment for investment and innovation in SAF production and deployment.

The aviation industry is demonstrably progressing towards sustainability, driven by advancements in technology and a rising demand for environmentally responsible travel solutions. Technological innovations are expanding the available options for sustainable aviation fuel (SAF). Developments in biomass conversion, synthetic fuel production, and hydrogen generation are creating a broader range of feedstock and production pathways, thereby contributing to the growth of the SAF market. 

Key Insights

  • Based on fuel type, the biofuel segment held the largest market share of 58.75% in 2023
  • Based on technology, the HEFA-SPK segment generated the highest revenue of USD 317.59 million in 2023
  • Based on aircraft type, the business & general classification segment is to generate a value of USD 8,279.1 million by 2031
  • On the basis of region, Europe is to experience exponential progress at a CAGR of 46.19% over 2024-2031

TotalEnergies and Airbus Join Forces in A Collaborative Effort To Offer Sustainable Aviation Fuel

February 2024: TotalEnergies recently established a significant strategic collaboration with Airbus (AIR.PA), signaling a pivotal move in the direction of sustainability. As part of this partnership, TotalEnergies agreed to provide Airbus with sustainable aviation fuel, catering to over fifty percent of the plane maker’s requirements in Europe. The primary objective of this alliance is to play a pivotal role in reducing CO2 emissions within the aviation sector, aligning with the broader ambition of achieving net carbon neutrality by 2050.

Environmental Imperatives and Corporate Sustainability Goals to Augment Market Growth

Extensive efforts to mitigate climate change and reduce greenhouse gas emissions are significantly driving the adoption of sustainable aviation fuel (SAF). Airlines and aviation stakeholders face increasing pressure to address their environmental footprint and align with global climate targets. As a result, many airlines have committed to ambitious sustainability goals, including carbon neutrality and net-zero emissions by 2050. For example, the "Flightpath Net Zero" initiative by the UK aviation industry aims to achieve net-zero carbon emissions from UK aviation by 2050 through measures including SAF deployment. Additionally, corporate sustainability commitments from major airlines, such as Delta Air Lines and United Airlines, include significant investments in SAF to reduce emissions from their operations. According to the International Energy Agency (IEA), the aviation sector's CO2 emissions could be reduced by up to 80% with widespread adoption of SAF. This growing emphasis on environmental responsibility and corporate sustainability is driving increased demand for SAF and fostering partnerships between airlines, fuel producers, and governments to accelerate its development and deployment.

Technological Advancements and Innovation to Bolster SAF Adoption

Technological advancements and ongoing innovation in sustainable aviation fuel (SAF) production processes are key drivers propelling market growth. Research and development efforts are focused on improving the efficiency, scalability, and cost-effectiveness of SAF production, addressing challenges such as feedstock availability and production costs. For instance, advancements in biomass conversion technologies, such as catalytic processes and hydrothermal liquefaction, are expanding the range of feedstock that can be utilized for SAF production, including waste oils, agricultural residues, and algae. Moreover, innovative synthetic fuel production methods, such as Fischer-Tropsch synthesis and alcohol-to-jet processes, are enabling the production of high-quality SAF from non-petroleum sources.

These technological advancements are not only enhancing the sustainability credentials of SAF but also reducing its production costs, making it more competitive with conventional jet fuel. According to a report by the International Renewable Energy Agency, continued technological innovation could reduce SAF production costs by up to 50% by 2030, further driving its market penetration. Additionally, collaborative research initiatives and public-private partnerships are facilitating knowledge sharing and accelerating the commercialization of advanced SAF production technologies.

Europe to Account for Over 35% Market Share by 2031 Due to Stringent Climate Neutral Targets

Europe is projected to experience the highest CAGR of 46.19% over 2024-2031 due to stringent environmental regulations, climate targets, and robust industry collaboration. Net Zero goals to reduce greenhouse gas emissions with the aviation industry among the key focus areas for decreasing the carbon footprint is supporting the sustainable aviation fuel market growth in the region. The EU's Renewable Energy Directive mandates the use of renewable fuels in aviation, providing a regulatory framework to promote SAF adoption. Additionally, initiatives like the EU's Sustainable Aviation Fuels Strategy aim to accelerate SAF deployment and achieve carbon-neutral aviation by 2050. Furthermore, European countries have also implemented various incentives and funding programs to support SAF development and deployment. For instance, the UK's Jet Zero Council aims to drive SAF production and infrastructure development through public-private partnerships. Moreover, collaborations between airlines, fuel producers, and research institutions have led to advancements in SAF production technologies, feedstock sourcing, and supply chain logistics.

Despite these efforts, challenges such as feedstock availability, production scalability, and cost competitiveness remain. However, Europe's strong commitment to sustainability, coupled with its well-established aviation industry and supportive regulatory environment, is aiding the regional sustainable aviation industry growth.

Market Leaders Focus on Collaborations and Acquisitions to Sustain Growth

The global sustainable aviation fuel market is fragmented with key players such as Neste, TotalEnergies, World Energy, LLC, LanzaTech, Fulcrum BioEnergy, Aemetis, SkyNRG, Air France-KLM, Boeing, Airbus, GE Aviation, Honeywell, and others. Companies employ a variety of strategic measures such as acquisitions, mergers, partnerships, product introductions, and collaborations to expand their business globally and enhance their competitive position.

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