A. DHANWANI, Brainy Insights Pvt. Ltd., Pune, India
The global sustainable aviation fuel (SAF) market is expected to increase from $216 MM in 2021 to $14.77 B by 2030.1 This represents a compound annual growth rate (CAGR) of 59.91% during the forecast period of 2022–2030.
North America. At more than 47%, the North America region was the largest market for global SAF revenue in 2021. The presence of supporting infrastructure for the production and favorable government policies for using these fuels are propelling the market’s growth during the forecast period in this region. Additionally, the increasing commercial and aviation industrial developments in North America are also helping to propel market growth. To advance the use of cleaner and more sustainable fuels in the U.S., the country’s government is currently taking steps to coordinate innovation across the federal government, aircraft manufacturers, fuel producers, airlines and airports. These actions are necessary to unlock the potential for a fully carbon-free aviation sector by 2050 and will help the region reach future climate goals.
Europe. Accounting for approximately 28% market share, Europe was the second largest regional market in 2021. Like the U.S., Europe had a high adoption rate for SAF and supportive government initiatives. The European Commission has issued several proposals for the adoption of SAF. These proposals have provided lucrative opportunities to SAF manufacturers. According to these proposals, 2% of SAF must be present in aviation fuel provided to EU airports in 2025, which will increase to more than 60% by 2050.
Asia-Pacific. The Asia-Pacific region is expected to show the fastest CAGR growth over the projection period due to rising disposable incomes. The demand for SAF has been growing gradually in Asia—the rising focus on carbon emissions and the ready supply of feedstock will likely accelerate this trend. Countries such as Japan, New Zealand and Singapore are emerging to be the frontrunners in SAF consumption.
Asia accounted for nearly 38% of global air travel in 2021. However, initiatives from governments will be required to promote the widespread use of SAF, as many developing countries in the region have limited financial capabilities. As the region recovers from the devastation brought on by the Covid-19 outbreak, some Asian airlines are researching the use of sustainable jet fuel created from spent cooking oil and plants to reduce the industry's carbon emissions.
Middle East. The increasing number of air passengers and the growth in synthetic lubricants are crucial reasons for market growth in the Middle East. The United Arab Emirates (UAE) has unveiled a development plan for SAF called Power-to-Liquid. The World Economic Forum and the UAE’s Ministry of Energy and Infrastructure have worked collectively on research proposals for adopting SAF. The research has concluded that the nation is strategically situated to take the lead globally in manufacturing SAF. There is a significant demand to decarbonize the UAE’s aviation industry; therefore, growing the use of sustainable fuels will be financially advantageous and environmentally friendly.
Latin America. SAF is still in the development phase in Latin America, but its significance is expanding lucratively. By 2030, Brazil may meet a significant percentage of the world's demand for SAF due to the abundance of raw materials. However, the region has a limited production capacity to satisfy local demand, let alone export SAF to other parts of the world. The region cannot utilize the manufacturing potential due to a lack of the requisite infrastructure and regulatory framework.
Companies. Leading companies in the production of SAF include Neste, Gevo Inc., SKYNRG, Eni SPA, SG Preston Company, Avfuel Corporation, Sundrop Fuels Inc., Red Rock Biofuels, Velocys, Aemetis, Inc, Ballard Power Systems, ZeroAvia, Inc., and SG Preston Company, among others, which are offering more significant opportunities and are continuously focused on new product developments and venture capital investments to obtain market share.
Technology. The technology segment is divided into Fischer-Tropsch synthetic paraffinic kerosene (FT-SPK), hydro-processed fatty acid esters and fatty acids-synthetic paraffinic kerosene, Alcohol-to-jet, synthetic iso-paraffin from fermented hydroprocessed sugar (HFS-SIP) and catalytic hydrothermolysis jet. At more than 27% market share, the FT-SPK technology was the leader in 2021. This growth was attributed to the increase in new aircraft sales worldwide.
Additional statistics. The report’s1 platform segment was divided into business and general aviation, commercial aviation, military aviation and unmanned aerial vehicles. The military aviation segment led the market with a market share of more than 30% in 2021. This growth was attributed to the increasing adoption of aircraft modernization programs.
The fuel type segment was divided into power-to-liquid fuel, biofuel, gas-to-liquid and hydrogen fuel. At more than 32%, the biofuel segment led in total market share in 2021. This growth was attributed to the rapid developments in technological pathways to commercialize the usage of alternative jet fuel.
Rising disposable income, the consumption of synthetic lubricant supplements, a growing middle-class population and increasing tourism propelled SAF’s market growth globally. Furthermore, rising greenhouse gas and carbon emissions, especially in the aviation sector, also are boosting the growth of the SAF market. HP
LITERATURE CITED
AVINASH DHANWANI is a Research Director for Brainy Insights Pvt. Ltd.