The aviation fuel market is expected to grow at a compound annual growth rate of 13.7% between 2022 to 2030, driven by an increased demand for air travel worldwide and burgeoning aviation industries in developing countries, according to a MarketsandMarkets report. The market, valued at about $249.9 billion in 2022, is expected to reach $696.2 billion by 2030.
The report explains the importance of sustainable aviation fuel (SAF) as a response to the demand for emissions reductions within the sector. SAF, a biofuel made from feedstocks, is able to reduce up to 80% of emissions over its lifecycle compared to conventional jet fuels.
Electrification of aviation will likely take many years to implement commercially, but the development of SAF will reportedly provide a short-term solution by lowering emissions for aircraft already in circulation. Several major airlines, such as United Airlines and JetBlue, have begun using SAF for their planes and have made commitments to more widespread use of the fuel in the near future. Therefore, the opportunity for offtake agreements in the years to come will allow for immense growth prospects for SAF.
The main restraints to SAF market growth, according to the report, are its cost in comparison to conventional aviation fuels, high investments needed for its approval, and stringent authorization procedures.
The cost of SAF is reportedly about three to nine times higher than conventional, fossil fuel-based jet fuels. Fuel costs comprise about 30% of airlines’ operating costs, so the SAF sector will need increased infrastructure and technologies to make it more economically viable. Also contributing to the high cost of SAF is the evaluation process involved in its commercialization. SAF requires costly, often time-consuming technical certifications to be approved for use, presenting another hurdle for the industry’s growth.
North America was found to account for the largest share of the aviation fuel market in 2022, and the region also represents a strong demand center for SAF. In order to reduce the carbon emissions caused, especially as air traffic increases, the report explains that supportive policies and initiatives could support the utilization of SAF.
Some efforts are already being made towards this goal, such as Shell and JetBlue’s partnership to bring more SAF to the LA airport and other collaborative projects working to advance the widespread production of the sustainable fuel alternative.
