Sustainable Aviation Fuel: The Supply Race Is On

It’s no secret that the global sustainable aviation fuel (SAF) market faces a supply crunch, but the magnitude of the challenge is larger than many may realize. Europe—a demand front-runner thanks to strong economic incentives created by SAF blending mandates—will need to turn to global imports to close a nearly 20% gap between local SAF supply and regulated demand by 2030, according to our analysis (see chart above). Feedstock imports will also be crucial.

The EU prohibition on first-generation SAF derived from food crops such as corn and soybeans, as well as caps on use of biofuels made from used cooking oil and animal fat, means that more nascent feedstocks and technologies will need to be considered.

• These include novel oil crops, such as intermediate oilseed crops (e.g., oilseed-bearing over-winter crops) and oil crops planted on degraded land. However, it remains highly uncertain how quickly production could ramp up. The local supply gap shown in the chart above equates to about 10 million acres enrolled in over-winter crops, which generally can only be planted once every three years; that acreage is roughly the size of US cotton plantings each year.
• Emerging biofuel technologies, such as alcohol-to-jet (including cellulosic crops and agricultural residues) and the Fischer-Tropsch process (GFT), show promise, but it’s still early. Based on the current project pipeline, only small-scale projects would be producing in Europe in 2030—if at all.
• Lastly, the EU’s electro-SAF blending mandates (1.2% of total aviation fuel by 2030) are a significant catalyst for this new power-to-liquid production pathway, but the technology is immature. It will take urgency and an investment exceeding $10 billion to unlock the 5 to 10 projects required to meet 2030 regulated demand.

As EU mandates accelerate, the need for supply to rapidly scale up will only increase. We project local demand to quadruple between 2030 and 2040, with 2050 demand surpassing 2030 levels by eightfold.