PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1408901
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1408901
Sustainable Aviation Fuel Market size was valued at USD 980.2 Million in 2022, expanding at a CAGR of 49.2% from 2023 to 2030.
Sustainable aviation fuels (SAF) are aviation fuels derived from renewable or waste sources that meet specific sustainability criteria. According to technical analysis conducted by ICAO, SAF has the greatest potential to significantly reduce CO2 emissions in the field of International Aviation. SAF, which is produced from renewable biomass and waste materials, has the ability to match the performance of petroleum-based jet fuel while only contributing a fraction of its carbon footprint. This allows airlines to make substantial progress in decoupling greenhouse gas (GHG) emissions from their flights. The U.S. Department of Energy Bioenergy Technologies Office (BETO) plays a crucial role in supporting energy companies and aviation stakeholders by facilitating research, development, and demonstration efforts aimed at overcoming barriers to the widespread adoption of low-carbon sustainable aviation fuel (SAF). The cultivation, sourcing, and production of SAF from renewable and waste resources not only present new economic opportunities for farming communities but also contribute to environmental improvement and potentially enhance aircraft performance.
An upsurge in the number of individuals traveling by air and a rise in disposable income often coincide with economic expansion. In 2022, U.S. airlines experienced a notable increase in passengers, carrying 194 million more individuals compared to the previous year, marking a 30% year-to-year growth. Throughout the entirety of 2022, from January to December, U.S. airlines transported a total of 853 million passengers (without adjustments), surpassing the figures of 658 million in 2021 and 388 million in 2020, as reported by the Bureau of Transportation Statistics. Additionally, enhance disposable income can result in a greater demand for automobiles, encompassing both regular passenger cars and luxury vehicles, as consumers are more inclined to make substantial purchases. Nevertheless, the stringent environmental regulations and commitments to reduce greenhouse gas emissions within the aviation industry present a significant opportunity for the sustainable aviation fuel market. Furthermore, the market growth may face obstacles due to the cost competitiveness of traditional jet fuels in comparison to sustainable alternatives.
Geographically, this market is spread across North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. These regions are further divided based on the countries involved in business activities. The market growth is anticipated to be dominated by the Asia Pacific region, primarily due to the increasing adoption of biofuels. The region is witnessing significant research and development efforts aimed at enhancing the efficiency and cost-effectiveness of biofuel production, which is expected to contribute to the growth of the SAF market. China, in particular, is projected to produce 1.7 billion liters of biodiesel in 2021, marking a substantial increase of over 54 percent compared to 2020, driven by strong exports. However, the progress in advanced biofuels production and expansion continues to lag behind, as reported by the Foreign Agricultural Service. On the other hand, North America and Europe are also expected to play a significant role in the market's growth during the forecast period. This is attributed to the ongoing advancements in technology for sustainable aviation fuel production, including the development of new feedstocks and more efficient production processes.
The growing awareness among consumers regarding the environmental impact of air travel and the increasing demand for sustainable practices are compelling airlines to invest in sustainable aviation fuels. The market is witnessing growth due to the augmented investment and funding support for research, development, and production of sustainable aviation fuels. Companies often establish partnerships with airlines, energy companies, and governments to foster the development and adoption of sustainable aviation fuels. Continuous research and development endeavors play a vital role in enhancing the efficiency and cost-effectiveness of sustainable aviation fuel production. Adherence to aviation industry standards and regulations, including sustainability requirements, is a crucial element in the competitive landscape.
Neste, in collaboration with EPIC Fuels, Signature Aviation, and Avfuel, will be providing sustainable aviation fuel to Boeing on 15 February 2023. This fuel will support Boeing's U.S. Commercial Airplanes business operations. Boeing has made an agreement to purchase Neste MY Sustainable Aviation Fuel™ from EPIC Fuels, Signature Aviation, and Avfuel to power its U.S. commercial operations until 2023. These fuel purchases will more than double Boeing's sustainable aviation fuel procurement compared to last year. To produce a total of 5.6 million gallons of blended SAF, Neste's sustainable aviation fuel will be blended with conventional jet fuel at a ratio of 30/70.
The scope of this report covers the market by its major segments, which include as follows: