Sustainable aviation fuel (SAF) refers to jet fuel that is produced from renewable, sustainable resources, like agricultural and forestry waste or municipal solid waste. SAF has significantly lower carbon footprint than conventional jet fuel which is derived from crude oil. It helps reduce greenhouse gas (GHG) emissions, leading to reduced impact on climate change.
The global sustainable aviation fuel market is estimated to be valued at US$ 2.37 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024 To 2031.
Growing concerns over aviation emissions and implementation of stringent carbon regulations by government bodies is driving the demand for SAF globally.
Key Takeaways
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., TauRx Pharmaceuticals Ltd. These players are focusing on expanding production capacities and developing new sustainable fuel technologies.
Some of the key opportunities in the SAF market include government incentives and tax exemptions for producers and consumers of SAF. Rising consumer demand for green aviation is also propelling airline companies to increase procurement and usage of Sustainable Aviation Fuel Market Size.
With growing awareness, many countries are introducing policies and targets for use of sustainable fuels in aviation. International organizations like IATA are also supporting adoption of SAF globally. This is expected to drive the expansion of SAF market across regions over the forecast period.
Market drivers
Stringent emission regulations imposed by environmental agencies are a key factor driving the demand for SAF. Agencies like EPA in the US have proposed amendments to existing rules to curb GHG emissions from aircraft. This is encouraging airlines and fuel producers to develop and procure cleaner alternative fuels. Growing awareness about climate change and carbon footprint of air travel is also compelling travelers to opt for more sustainable flight options where available.
PEST Analysis
Political: Governments across various countries are promoting the development and use of Sustainable Aviation Fuel Market to reduce dependency on fossil fuels and lower carbon emission from the aviation industry. Strict environmental regulations related to carbon emission from aircraft are expected to drive the demand.
Economic: Higher prices of conventional jet fuel coupled with incentives by various governments in forms of tax exemptions and subsidies for sustainable aviation fuel are encouraging airliners to use bigger quantities of sustainable fuels.
Social: Growing awareness about environmental issues like global warming and climate change is increasing pressure on aviation industry to lower their carbon footprint. This is positively impacting the growth.
Technological: Development of technologies to produce sustainable aviation fuels from renewable feedstock like used cooking oil, animal fats, forestry and agricultural waste is driving the growth. Also, newer technologies to blend higher proportions of sustainable fuels with conventional jet fuel are allowing greater replacemnet.
The geographical regions concentrating highest value for sustainable aviation fuel market include North America and Europe. Stringent environmental regulations regarding carbon emission from aircraft implemented by regulatory authorities in these regions are driving airliners to use greater proportions of sustainable aviation fuels.
Asia Pacific is expected to be the fastest growing region during the forecast period. Rising number of airline passengers in countries like China and India is increasing jet fuel demand. At the same time, these countries are promoting usage of sustainable aviation fuels through initiatives like tax exemptions in order to lower environmental impact of growing aviation industry.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.