High cost constraining SAF uptake

Plenty of analysts have questioned the ability of the airline industry to reach its aspirational targets for the use of sustainable aviation fuel (SAF), but if the latest forecasts for SAF production are accurate the cynics could be proved wrong, reports associate editor and chief correspondent, Tom Ballantyne.

February 1st 2024

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The market for sustainable aviation fuel, or SAF, is projected to experience phenomenal growth in the next decade and beyond, predicts three separate forecasts released in January. Read More » Their projections vary from 60% annual growth to 42%. They envisage a market increasing from hundreds of millions of dollars at present to tens of billions of dollars by the early 2030s.

Future Market Insights (FMI), a global provider of market intelligence, foresees the market, which generated revenue of $563.2 million in 2023, to be worth $61.92 billion by 2033 recording yearly growth of 60%. Another forecaster, Research Nester, predicts expansion of 42%, with 2022’s revenue of $435 million climbing to $15 billion by 2035. ResearchAndMarkets.com
another player in the sector, predicts the SAF market to undergo “a transformative growth spurt”, evolving from a $1.1 billion industry in 2023 to an estimated $16.8 billion business by 2030, at a striking annual growth rate of 47.7%.

“This astronomical growth is shaped by a myriad of factors, including heightened environmental awareness, regulatory policies and ground-breaking technical advancements aimed at curbing carbon emissions in the aviation sector,” said ReasearchandMarkets.

Research Nester said the SAF market in the Asia-Pacific is projected to have a significant share of about 28% over the coming years. “This market in this region is set to be dominated by growing initiatives by various organizations. For instance, in an effort to cut carbon emissions while also conveying a message to fuel providers, the Association of Asia-Pacific Airlines (AAPA) has established a target for its members to consume 5% SAF by 2030.”

FMI said the demand for SAF is experiencing a notable surge, driven by a confluence of factors underscoring a global commitment to environmental sustainability in the aviation industry. “The urgent need to reduce carbon footprints has propelled higher demand for innovative ideas and technologies in aviation,” it said.

“Technological advancements, coupled with stringent government laws, create an environment for the growth of the sustainable aviation fuel market. Private airline companies, responding to increased investment, are actively seeking feasible and reliable alternative solutions to traditional aviation fuels.

“The reduction in life cycle greenhouse gas emissions not only aligns with environmental goals but provides additional economic and environmental benefits. “In essence, the adoption of sustainable alternative energy sources is not merely a necessity for aircraft safety and general use. It is a crucial step towards achieving significant carbon reduction goals.

“This multifaceted approach, driven by innovation, technological progress, and strategic investments, positions the aviation industry at the forefront of sustainable practices, benefitting both the environment and economic prosperity.”

Apart from the decision by AAPA member airlines, taken at their November Assembly of Presidents in Singapore, to aim for 5% SAF use by 2030, there are other indicators of a determination to rapidly improve SAF production and use. India’s Ministry of Petroleum and Gas has set an indicative target of 1% for blending SAF with conventional jet fuel for all international flights by 2027, a major step towards reducing carbon emissions. This is expected to double by 2028 and reach 5% by 2030, an order issued by the ministry states.

Australia’s first SAF refinery will soon open its doors in Gladstone, Queensland, supported by the Queensland government, and be fully operational by next year. The $500 million project will be Australia’s first commercial SAF bio-refinery, creating around 60 direct jobs and indirectly supporting an estimated 500 regional jobs during construction and operation.

A new roadmap released by Australia’s national science agency, CSIRO, and Boeing Australia, predicts the nation has “a moment-in-time opportunity” to develop a sovereign SAF industry, with domestic demand for jet fuel expected to increase by 75% by 2050.

The Sustainable Aviation Fuel Roadmap builds consensus on developing an Australian SAF industry, identifying opportunities to produce and scale production from Australian feedstocks.

CSIRO senior manager and lead Roadmap author, Max Temminghoff, said Australia was in a prime position to develop a domestic industry. “By actively working to liberate feedstocks, the roadmap estimates Australia is sitting on enough resources to produce almost 5 billion litres of SAF by 2025. This could supply nearly 60% of jet fuel demand projected for that year. That’s enough fuel to power 640,000 Melbourne-Sydney return flights on a B737.”

Boeing Regional Sustainability Lead APAC and Roadmap co-author, Heidi Hauf, said the findings emphasised a local SAF industry will contribute to decarbonization and energy security and generate more regional employment. “Australia imports 90% of its liquid fuel, including jet fuel, via long supply chains exposed to geopolitical and climate change risks and delays associated with quality issues, placing the country in a vulnerable position when it comes to jet fuel security,” she said.

“With alternative technologies such as battery and fuel-cell powered planes still limited in long haul capabilities and the increasing competition for carbon offsets, SAF offers the largest potential for reduced aviation emissions in the near-term.”

Elsewhere, the first transatlantic flight by a commercial airliner fully powered by SAF was operated by Virgin Atlantic from London to New York last November. Partly funded by the UK government, the flight was hailed for demonstrating potential to reduce carbon emissions from flying, despite the skepticism of scientists and environmental groups.

“The world always will assume something can’t be done until you do it,” Virgin Atlantic founder and president, Sir Richard Branson, said. Airlines have previously flown on a blend of up to 50% alternative fuels.