Sustainable aviation fuel is a type of biofuel produced from sustainable sources such as used cooking oil, agricultural and forest residues or municipal solid waste, as a substitute for conventional jet fuel. It has almost similar properties to jet fuel and can be blended with petroleum-derived jet fuel up to 50% without requiring aircraft engine modifications. Sustainable aviation fuel has significant environmental benefits as it reduces greenhouse gas emissions by upto 80% over its life cycle compared to conventional jet fuel. With growing concerns over aviation’s impact on climate change, several countries and airlines have set goals to boost the production and use of sustainable fuels.
The global Sustainable Aviation Fuel Market is estimated to be valued at US$ 853.36 Bn in 2024 and is expected to exhibit a CAGR of 19% over the forecast period 2024 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends
One of the key trends in the sustainable aviation fuel market is the increasing number of collaborations between airlines and fuel producers. Major airlines such as American Airlines, Jetblue, United Airlines, Alaska Airlines etc. have partnered with fuel producers to explore opportunities for large-scale production of sustainable aviation fuels. For example, United Airlines has agreements with Neste and World Energy to purchase sustainable fuel for flying out of Los Angeles and San Francisco International Airports. Such partnerships aim to develop a supportive infrastructure for supply of alternative jet fuels. Additionally, government initiatives and policies incentivizing the production and use of sustainable fuels through tax exemptions and subsidies are also fueling the market growth. For instance, the Commercial Aviation Alternative Fuels Initiative by U.S. Federal Aviation Administration provides funding for research and development of sustainable aviation fuels.
Porter’s Analysis
Threat of new entrants: Low economies of scale in production and technology and the need for large capital investments make the threat of new entrants low in this market.
Bargaining power of buyers: The buyers are mainly airlines who have a high bargaining power due to the presence of a few large buyers in this market.
Bargaining power of suppliers: Few suppliers of raw materials like waste greases and animal fats gives them high bargaining power in the market.
Threat of new substitutes: Alternatives like electric, hydrogen-powered planes pose low threat currently due to high development costs and unavailability of required technology and infrastructure.
Competitive rivalry: Intense competition exists among existing players to gain greater market share through production innovation, feedstock diversification and efficiency enhancement.
Key Takeaways
The global Sustainable Aviation Fuel Market Share is expected to witness high growth over the forecast period.
North America currently dominates the market owing to supportive government policies and presence of key players in the US and Canada. The Asia Pacific region is expected to grow at the fastest pace during the forecast period with China and India emerging as high growth markets.
Key players operating in the sustainable aviation fuel market are Eisai Co., Ltd., Novartis AG, AbbVie Inc. (Allergan Plc.), Adamas Pharmaceuticals, Inc., H. Lundbeck A/S, Biogen, AC Immune, F. Hoffmann La Roche Ltd., Daiichi Sankyo Company, Limited, Johnson & Johnson Services, Inc., and TauRx Pharmaceuticals Ltd.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it