The total capital expenditure required to meet global demand for sustainable aviation fuel could be as much as $45 billion by 2030, new research by the World Economic Forum and Kearney has found.
According to the report, Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment, global demand for SAF is expected to reach 17 million tonnes per year by the end of the decade. This would represent about 5% of total jet fuel consumption.
As of the end of 2024, current production capacity of SAF stood at 4.4 million tonnes per year, with this expected to grow to around 6.9 million tonnes per year as new refineries open and expand.
However, an extra 5.8 million tonnes of production capacity will still be required to meet global demand by 2030. Depending on the technology mix, total capital needed to meet this demand will range between $19 billion and $45 billion.
10 ways to accelerate SAF investment
The World Economic Forum and Kearney have outlined 10 financial methods that could be utilised to boost investment in sustainable aviation fuels, including:
- Research and innovation grants for early-stage, high-risk SAF technologies to reduce upfront costs
- Multilateral development bank support, particularly in developing regions with complex regulatory landscapes
- Guarantees and insurance, such as loan guarantees, first-loss capital, and insurance solutions
- Strategic investments, such as collaboration with airlines, airports, original equipment manufacturers, and energy players to provide demand assurance and foster a supportive ecosystem
- Long-term offtake agreements to provide stable revenue and alleviate demand uncertainty
- Book-and-claim mechanisms that allow corporate travelers to take an active role in funding SAF
- Green bonds tied to SAF production to serve as a powerful tool for raising impact-driven capital
- Private equity capital and operational expertise to accelerate commercialisation and scale SAF projects
- Infrastructure investors with lower capital costs and a long-term investment horizon
- Tolling models that mitigate market risks by charging a fixed fee for refinery capacity while customers supply feedstock and retain ownership
‘Need to work together’
“If we are serious about hitting SAF targets by 2030, SAF producers, governments, and investors will need to work together to de-risk production and scale employment,” commented Kearney’s global sustainability director, Claudia Galea.
“There are a number of financing roadblocks for SAF to scale up effectively. Addressing these barriers will require a multifaceted approach with technological innovation, policy frameworks, and innovative financial structures to enhance the investment appeal for SAF projects across their life cycle.”
The report is based on SAF commitments from major global airlines, including Scandinavian Airlines (SAS), which has pledged to reach 35% SAF usage by 2030, while FedEx, UPS, DHL, and Airbus have each committed to 30%. Other airlines, including Ryanair, American Airlines, Delta, Air France-KLM, IAG, Southwest, Qatar Airways, and JetBlue, have set targets ranging from 10% to 12.5%. Meanwhile, Lufthansa, Singapore Airlines, and Malaysia Airlines have committed to a 5% SAF target.
“For SAF to reach scalable production, a shift in financing mechanisms will be necessary, leveraging both private and public capital to mitigate the perceived risks and catalyse a substantial cash flow into the sector,” added Giorgio Parolini, World Economic Forum aviation decarbonisation lead. Read more here.
