Advances in Conversion Technologies
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The sustainable aviation fuel (SAF) market has emerged as a crucial and rapidly growing sector within the aviation industry, driven by the urgent need to reduce greenhouse gas emissions and mitigate the impact of aviation on climate change. SAF, also known as biojet fuel, is derived from sustainable feedstocks such as agricultural waste, algae, and renewable energy sources. It offers a viable alternative to conventional jet fuel by significantly reducing carbon dioxide emissions and other pollutants. The SAF market is witnessing increasing global attention and investment as governments, airlines, and industry stakeholders strive to achieve their sustainability goals. With its potential to revolutionize aviation and contribute to a greener future, the sustainable aviation fuel market presents significant opportunities for innovation, collaboration, and positive environmental impact.
Market Introduction
Sustainable aviation fuel (SAF) has a long history that dates back to the early 2000s when environmental and climate change concerns first gained popularity. The need for alternative fuels that may lower greenhouse gas emissions and dependency on fossil fuels was acknowledged by academics and industry professionals. The first focus was on biofuels made from plants such as sugarcane and soybeans. The first commercial flight powered by a mixture of biofuel and regular jet fuel took off in 2008. Since then, there has been a substantial advancement in the creation and acceptance of SAF, with improvements in the variety of feedstocks used, the refining procedures, and the certification criteria.
Sustainable aviation fuel (SAF) is now seeing a remarkable increase in attention and usage on a worldwide scale. Cleaner substitutes for conventional jet fuels are urgently needed in light of rising worries about climate change and the negative environmental effects of the aviation sector. Hence, a workable answer has been provided by SAF, which is produced from sustainable feedstocks such as biomass, used cooking oil, or hydrogen. Progress in the industry is being driven by cutting-edge technology and partnerships, which have boosted companies’ SAF manufacturing capacity, improved supply chain logistics, and reduced prices. To encourage the implementation of SAF and provide a more sustainable future for air transport, issues including scalability, feedstock supply, and regulatory frameworks must be resolved.
Industrial Impact
The sustainable aviation fuel and technological advancements in the field are expected to have a positive impact on the global market for sustainable aviation fuel. Several organizations and government agencies are working to introduce newer manufacturing techniques into the global sustainable aviation fuel market. When compared to different sustainable aviation fuel products, such as different fuel types, the demand for biofuel stands out as the fuel that is currently in high demand.
In recent years, sustainable aviation fuel has registered an exponential surge in demand from the commercial aviation industry, with high demands for business and general aviation. Additionally, due to the increasing environmental concerns, sustainable aviation fuel has grown in significance during the past few years. For instance, in May 2023, Neste signed an agreement with ITOCHU, which extended its collaboration in order to represent Neste MY Renewable Diesel as an authorized distributor in Japan. Based on this arrangement, Neste MY Renewable Diesel's market reach would be increased, for instance, to the region around Osaka in order to supply the fuel for the 2025 Osaka-Kansai Japan Expo building site.
Market Segmentation
Segmentation 1: by Application
- Commercial Aviation
- Business and General Aviation
- Military Aviation
- Unmanned Aerial Vehicle (UAV)
Commercial Aviation Segment to Dominate the Global Sustainable Aviation Fuel Market (by Application)
Based on application, the sustainable aviation fuel market is led by the commercial aviation segment, with a 78.64% share in 2023. Increasing environmental concerns and volatile jet fuel prices are expected to drive the growth of the sustainable aviation fuel market.
Given that commercial aviation contributes significantly to the world's greenhouse gas emissions, it is the greatest consumer of sustainable aviation fuel (SAF). The environmental effect of aviation has evolved into a critical issue as air travel continues to expand quickly. By lowering the carbon impact of airplanes, SAF provides a possible alternative. Commercial airlines have adopted SAF as a way to meet their sustainability objectives because they understand the urgent need to switch to greener fuels. The aviation industry is a great sector for promoting the demand for and supply of sustainable aviation fuel because it has the size and infrastructure to facilitate widespread SAF adoption. Commercial aviation contributes significantly to reducing climate change and promoting a more environment-friendly future by setting the standard for SAF usage.
Segmentation 2: by Engine Type
- Piston Engine
- Turbine Engine
Turbine Engine Segment to Lead the Global Sustainable Aviation Fuel Market (by Engine Type)
Segmentation 3: by Fuel Type
- Hydrogen Fuel
- Biofuel
- Power-to-Liquid Fuel
- Gas-to-Liquid Fuel
Biofuel Segment to Lead the Global Sustainable Aviation Fuel Market (by Fuel Type)
Based on fuel type, the sustainable aviation fuel market is expected to be dominated by the biofuel segment in 2023, with a 95.64% share in terms of revenue due to the high demand for sustainable aviation fuel in the aviation industry.
Additionally, the fuel type segment comprises hydrogen fuel, biofuel, power-to-liquid, and gas-to-liquid that make up the fuel type segment in sustainable aviation fuel. These fuels provide solutions for achieving net zero emissions and lowering carbon footprints. The capabilities and efficacy of sustainable aviation fuel are continually being enhanced via the development and integration of manufacturing technologies.
Segmentation 4: by Manufacturing Technology
- Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK)
- Hydroprocessed Esters and Fatty Acids-Synthetic Paraffinic Kerosene (HEFA-SPK)
- Alcohol-to-Jet Synthetic Paraffinic Kerosene (ATJ-SPK)
- Synthetic ISO-Paraffin from Fermented Hydroprocessed Sugar (HFS-SIP)
- Catalytic Hydrothermolysis Jet (CHJ)
Hydroprocessed Esters and Fatty Acids-Synthetic Paraffinic Kerosene (HEFA-SPK) Segment to Lead the Global Sustainable Aviation Fuel Market (by Manufacturing Technology)
The hydroprocessed esters and fatty acids-synthetic paraffinic kerosene (HEFA-SPK) segment is expected to dominate the market, with a share of 32.24% in 2033.
Segmentation 5: by Blending Capacity
- Below 30%
- 30% to 50%
- Above 50%
30% to 50% Segment to Lead the Global Sustainable Aviation Fuel Market (by Blending Capacity)
The 30% to 50% blending capacity segment is expected to dominate the market, with a share of 50.1% in 2033.
Segmentation 6: by Region
- North America - U.S. and Canada
- Europe - U.K., Germany, France, and Rest-of-Europe
- Asia-Pacific - Japan, India, China, and Rest-of-Asia-Pacific
- Rest-of-the-World - Middle East and Africa and Latin America
North America to Dominate Global Sustainable Aviation Fuel Market (by Region)
North America accounted for the highest share of 48.09% in 2022 in the global sustainable aviation fuel market, owing to a significant number of companies based in the region. North America’s growth is driven by various activities in the U.S. and Canada, as well as increased spending by commercial organizations such as Aemetis, Inc., Alder Fuels, Gevo, Inc., Fulcrum BioEnergy, Inc., and government key agencies.
Recent Developments in the Sustainable Aviation Fuel Market
- In May 2023, Neste signed an agreement with ITOCHU, which extended their collaboration in order to represent Neste MY Renewable Diesel as an authorized distributor in Japan. Based on this arrangement, Neste MY Renewable Diesel's market reach would be increased, for instance, to the region around Osaka in order to supply the fuel for the 2025 Osaka-Kansai Japan Expo building site.
- In April 2023, Shell signed an agreement with Delta under which Delta would purchase 10 million gallons of SAF from Shell Aviation over a period of 2 years, with the Los Angeles International Airport (LAX) serving as its hub. With more than 200 million gallons of SAF committed, the international airline will be well on its approach to meeting its target of using 35% SAF by 2035 and more than halfway toward its objective of using 10% SAF annually by the end of 2030.
- In November 2022, Gevo signed an agreement with Iberia Airlines, under which they would receive 6 million gallons of SAF for the next five years for its commercial operations. The company expects to fuel its aircraft with SAF coming from Gevo, Inc. from 2028. The agreement is valued at $165 million for the tenure of 5 years.
Demand - Drivers and Limitations
Following are the drivers for the sustainable aviation fuel market:
- Increasing Environmental Concerns
- Volatile Jet Fuel Prices
- Advances in Conversion Technologies
Following are the challenges for the sustainable aviation fuel market:
- Infrastructure Development Cost
- Inadequate Supply of Feedstock
Following are the opportunities for the sustainable aviation fuel market:
- SAF Offtake Agreements
How can this report add value to an organization?
Product/Innovation Strategy: The product segment helps the reader understand the different types of products available for deployment and their potential globally. Moreover, the study provides the reader with a detailed understanding of the sustainable aviation fuel market by application (commercial aviation, business and general aviation, military aviation and unmanned aerial vehicle (UAV), engine type (turbine engine and piston engine), product on the basis of fuel type (hydrogen fuel, biofuel, power-to-liquid fuel, and gas-to-liquid fuel), manufacturing technology (fischer-tropsch synthetic paraffinic kerosene (FT-SPK), hydroprocessed esters and fatty acids-synthetic paraffinic kerosene (HEFA-SPK), alcohol-to-jet synthetic paraffinic kerosene (ATJ-SPK), synthetic ISO-paraffin from fermented hydroprocessed sugar (HFS-SIP), and catalytic hydrothermolysis jet (CHJ), and blending capacity (below 30%, 30% to 50%, and above 50%).
Growth/Marketing Strategy: The sustainable aviation fuel market has seen major development by key players operating in the market, such as business expansion, partnership, collaboration, and joint venture. The favored strategy for the companies has been merger and acquisition to strengthen their position in the sustainable aviation fuel market. For instance, in February 2023, Fulcrum BioEnergy stated that its U.K. subsidiary, Fulcrum BioEnergy, Ltd., has been awarded a grant from the U.K. Department for Transport Advanced Fuels Fund of over $20.2 million. The award, which is valid through 2025, will aid in the construction of Fulcrum NorthPoint, a plant that will convert residual waste into sustainable aviation fuel (SAF) at the Essar Stanlow site.
Competitive Strategy: Key players in the sustainable aviation fuel market analyzed and profiled in the study involve major sustainable aviation fuel offering companies providing sustainable aviation fuel and different manufacturing technology. Moreover, a detailed competitive benchmarking of the players operating in the sustainable aviation fuel market has been done to help the reader understand how players stack against each other, presenting a clear market landscape. Additionally, comprehensive competitive strategies such as partnerships, agreements, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.
Methodology: The research methodology design adopted for this specific study includes a mix of data collected from primary and secondary data sources. Both primary resources (key players, market leaders, and in-house experts) and secondary research (a host of paid and unpaid databases), along with analytical tools, are employed to build the predictive and forecast models.
Data and validation have been taken into consideration from both primary sources as well as secondary sources.
Key Market Players and Competition Synopsis
The companies that are profiled have been selected based on thorough secondary research, which includes analyzing company coverage, product portfolio, market penetration, and insights, which are gathered from primary experts.
The market for sustainable aviation fuel is divided between the established players and the start-ups. As of 2022, the market for sustainable aviation fuel is dominated by established players who contribute toward 78% market share dominance, whereas start-ups have a share of 22% in the market. The start-ups' numbers are set to witness growth in the future as more and more airlines and the aviation industry as a whole look toward achieving net-zero carbon emission by 2050.
Key Companies Profiled:
- Aemetis, Inc.
- BP p.l.c.
- Shell
- Neste
- Gevo, Inc.
- SkyNRG
- Velocys plc
- TotalEnergies
- Fulcrum BioEnergy, Inc.
Table of Contents
Companies Mentioned
- Aemetis, Inc.
- BP p.l.c.
- Shell
- Neste
- Gevo, Inc.
- SkyNRG
- Velocys plc
- TotalEnergies
- Fulcrum BioEnergy, Inc.
Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 194 |
| Published | July 2023 |
| Forecast Period | 2023 - 2033 |
| Estimated Market Value ( USD | $ 1.29 Billion |
| Forecasted Market Value ( USD | $ 131.12 Billion |
| Compound Annual Growth Rate | 58.8% |
| Regions Covered | Global |
| No. of Companies Mentioned | 9 |
