The global sustainable aviation fuel (SAF) market is set to grow at a CAGR of 57.5% between 2023 and 2030, according to a new report by The Research Insights.
The global SAF market was valued at $658.18 million in 2023, and will be worth $15.85 billion by the end of the decade, the report claims, driven by increasing environmental awareness, strong regulatory backing, and growing demand across both the commercial and military aviation sectors.
SAF adoption
International climate targets, such as the Paris Agreement and ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) initiative, have put pressure on the aviation sector to decarbonise, and adoption of SAF is ‘speeding up’ thanks to government mandates and incentives such as tax credits. This, in turn is leading to increased interest from the corporate sector.
‘The increasing investor attention on eco-friendly aviation technologies together with rising R&D funding creates innovative business structures and collaborative partnerships,’ the report notes. ‘SAF emerges as a crucial element for sustainable aviation because the public’s increased environmental consciousness and eco-conscious travel trends strengthen the need for cleaner aviation solutions.’
Emissions reduction
Currently, the aviation sector is responsible for between 2% and 3% of global CO2 emissions. As well as government action to address this, a number of airlines, including Delta, Lufthansa, British Airways, and United Airlines, are responding by committing to net-zero goals by 2050 and entering long-term procurement agreements for SAF.
‘These companies are forging extended offtake agreements with SAF producers while simultaneously co-investing in production facilities and investigating partnerships with technology firms to ensure a continuous supply of low-carbon fuels,’ the report notes.
Airline manufacturers, too, are doing their part, with commitments to certify commercial aircraft for full SAF operation by 2030.
‘Airlines with strong environmental credentials are becoming preferred choices for corporate travellers and logistics providers, which pushes carriers to adopt SAF in their operations,’ the report states. ‘Industry-led initiatives demonstrate the increasing agreement that SAF adoption serves as both an environmental necessity and a competitive edge.’
The SAF market is divided into several sectors, including biofuel, hydrogen fuel, power to liquid fuel, and gas-to-liquid. Biofuels currently dominate, accounting for over 76% of the market. Read more here.
