Global Sustainable Aviation Fuel Market - 2023-2030

Market Overview

Global Sustainable Aviation Fuel Market reached US$ 320.8 million in 2022 and is expected to reach US$ 3,581.0 million by 2030, growing with a CAGR of 35.2% during the forecast period 2023-2030.

Over the forecast period, new government initiatives to encourage green technologies are most likely to drive the growth of the global sustainable aviation fuel market. The international air transport association (IATA) has recommended various policy initiatives that can be undertaken by governments to increase production and adoption of sustainable aviation fuel.

Scientists are researching new potential feedstocks for the development of sustainable aviation fuels. A research paper published in February 2023, by scientists from the International Hellenic University in Greece explores the usage of solid waste biomass as a potential feedstock for sustainable aviation fuel production.

Market Dynamics

Advances in Sustainable Fuel Production

New advances in sustainable fuel production are likely to bring down production costs significantly, thus improving its adoption rates. In October 2022, Honeywell International Ltd., a U.S.-based multinational engineering and technology company, announced that it had developed a new technology for the conversion of ethanol into jet fuel. The company plans to commence large-scale commercial production in the coming years.

Airlines are partnering with government bodies to research new methods of sustainable fuel production. For instance, in June 2023, Air New Zealand, the flag carrier of New Zealand, in partnership with the New Zealand government, have announced a US$ 2 million investment to fund a set of advanced studies into new methods of sustainable aviation fuel production.

Increasing Emission Reduction Efforts by Airlines

With aviation being the single largest contributor of carbon emissions within the transportation sector, airlines are under increasing pressure to cut emissions. Many governments, particularly those in North America and Europe have begun imposing stiff carbon taxes on industries and companies having high emissions. Carbon taxes have to potential to significantly erode the profitability of airlines.

Furthermore, investors are increasing taking into account environmental, social and governance (ESG) ratings into consideration while undertaking investments in companies. Most global airlines score poorly on ESG metrics, making it difficult to attract value investors. The adoption of sustainable aviation fuel by airlines will go a long way towards reducing emissions in the long term,

Reduced Cost Competitiveness

Sustainable aviation fuel has high cost of production, mainly on account of various factors such as volatile feedstock availability, limited production capacity and support infrastructure. Although new advances have drastically brought down costs over the previous decade, sustainable aviation fuel still remains 10-20% more expensive than conventional jet fuel.

The relatively high costs of sustainable aviation fuel renders it uncompetitive against conventional jet fuel. The aviation industry is highly competitive and airlines typically operate on low margins. Adopting aviation fuels can increase operating costs for airlines, erode profit margins and make them uncompetitive against rivals.

COVID-19 Impact Analysis

The COVID-19 pandemic led to a complete disruption of the aviation industry as commercial air travel ground to a halt due to pandemic restrictions. Many airlines struggled with drastically reduced cash flow, with some airlines even filing for bankruptcy due to the economic uncertainties of the pandemic. It significantly reduced the adoption of sustainable aviation fuels.

The pandemic also led to global supply chain problems, creating disruptions in feedstock availability, thus affecting the production of sustainable aviation fuels. Many government policies in support of sustainable aviation fuel development were put on hold, creating further complications for global market growth.

Russia- Ukraine War Impact Analysis

Although the ongoing war between Russia and Ukraine has created disruptions for various industries, it is unlikely to majorly affect the global sustainable aviation fuel market. Much of the major market developments have been occuring in western Europe and North America, far away from the conflict. Furthermore, the development of sustainable fuel within Russia is limited and it is unlikely to account for a significant share of the global market over the medium and long term.

Segment Analysis

The global sustainable aviation fuel market is segmented based on type, aircraft type, platform and region.

Commercial Aviation Will Continue to Account for the Largest Market Share

Commercial aviation accounts for nearly two thirds of the global market. Commercial aviation operates the largest fleet of aircraft, with data suggesting nearly 25,000 aircraft currently in operation in 2022. With large-scale emissions, commercial aviation represents an ideal starting point for expanding the adoption of sustainable aviation fuel.

One of the major factors that makes commercial aviation one of the biggest platforms for sustainable aviation fuel is that support infrastructure already exists and can be adapted for sustainable fuel usage with minimal modifications. Commercial aviation is likely to continue to account for the largest share of the global market over the medium and long term.

Geographical Analysis

Government Initiatives to Propel Market Growth in Europe

Government support and initiatives have led to increased adoption of sustainable aviation fuel in Europe. The European Aviation Safety Agency (EASA), has mandated 2% sustainable aviation fuel blending for fuel dispensed at European airports. Furthermore, the European Commission, the legislative body of the European Union (EU), has proposed measures to increase adoption of sustainable fuel to 63% by 2050.

In April 2023, the EU adopted binding targets for sustainable aviation fuel usage and adoption. Companies are already entering into partnership agreements to adopt sustainable aviation fuel. For instance, in July 2023, DER Touristik, one of Germany's largest tour operators, announced a partnership with the German flag carrier Lufthansa, to promote the adoption of sustainable aviation fuel.

Competitive Landscape

The major global players include: Neste, Fulcrum BioEnergy, LanzaTech, TotalEnergies, Gevo, SG Preston, Velocys plc, Northwest Advanced Bio-Fuels,LLC, Red Rock Biofuels and Prometheus Fuels.

Why Purchase the Report?

• To visualize the global sustainable aviation fuel market segmentation based on type, aircraft type, platform and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of sustainable aviation fuel market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The global sustainable aviation fuel market report would provide approximately 57 tables, 58 figures and 185 Pages.

Target Audience 2023

• Aviation Fuel Producers
• Aircraft Manufacturers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies