June 13, 2024

Sustainable Aviation Fuel Market Is Expected To Be Flourished By Growing Environmental Concern To Reduce Carbon Emission

Sustainable aviation fuel is a type of biofuel used to power aircraft. It is produced from sustainable sources like non-food crops, agricultural and forestry waste, non-recyclable household waste etc., which have lower carbon footprints than traditional jet fuel which is primarily fossil-based. Sustainable aviation fuel offers nearly 80% lower carbon emissions over its life cycle as compared to conventional petroleum-based jet fuel. It can be blended with petroleum-based jet fuel at blend levels of up to 50%. Major airline players are increasingly adopting sustainable aviation fuel to lower their carbon footprint and meet long-term emission reduction targets.

The global Sustainable Aviation Fuel Market is estimated to be valued at US$ 1.79 Billion in 2023 and is expected to exhibit a CAGR Of 19. % over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Growing environmental concern to reduce carbon emission as highlighted in the heading has been a major driver for sustainable aviation fuel market. Strict environmental norms by regulatory bodies are forcing airline operators to explore non-petroleum fuel options and lower their carbon footprint. For example, the International Civil Aviation Organization (ICAO) aims to cap net carbon emissions from international aviation from 2020 levels by use of sustainable aviation fuels and new aircraft technology. Also, growing public and shareholder pressure on airlines to demonstrate commitment towards sustainability will further propel the demand for sustainable aviation fuel over the forecast period. However, high production costs of sustainable aviation fuel compared to conventional jet fuel has restricted its widespread adoption. Continuous research efforts to reduce costs through innovative production technologies can boost the sustainable aviation fuel market growth in coming years.

Segment Analysis

The sustainable aviation fuel market is segmented into two categories, namely, hydroprocessed esters and fatty acids (HEFA), and Fischer-Tropsch (FT) synthetic paraffinic kerosene. The hydroprocessed esters and fatty acids (HEFA) segment dominates with over 70% market share owing to its high blend ratio with fossil jet fuel of up to 50%. This technology uses waste animal fats and vegetable oils to produce drop-in fuels with the same chemical and physical properties as conventional jet fuel.

PEST Analysis

Political: Stringent emissions regulations implemented by international aviation agencies are driving demand. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) aims to cap net CO2 emissions from international civil aviation at 2020 levels.

Economic: Higher production costs compared to fossil jet fuel are a challenge. Support in the form of tax incentives and subsidies can help address the cost differential and boost large-scale production and usage.

Social: Growing environmental consciousness is encouraging airlines and airports to use sustainable fuels to lower their carbon footprint. Major airline companies have set carbon neutrality targets which will require scaling up availability of alternative jet fuels.

Technological: Advancements in biomass processing technologies, especially fast pyrolysis, are expected to lower costs and facilitate production of sustainable aviation fuel from non-edible feedstocks like agricultural residues in the coming years.

Key Takeaways

The Global Sustainable Aviation Fuel Market Demand is expected to witness high growth driven by supportive government policies and initiatives. Europe currently leads the market due to the presence of production facilities and mandates for use of alternative jet fuels. However, North America’s share is projected to increase significantly over the forecast period supported by production plants under development in the US and investment commitments from various airlines.

Key players operating in the sustainable aviation fuel market include Neste, Gevo, World Energy, Eni, SkyNRG, Velocys, Aemetis, Propel Fuels and others. Regional analysis comprises The European region holds over 40% market share currently and targets to supply at least 2 million tons of sustainable aviation fuels annually by 2030. Stringent emissions norms and incentives for alternative fuel usage provided under the EU’s Renewable Energy Directive have propelled Europe’s leading position.North America is also expected to offer lucrative opportunities for sustainable aviation fuel suppliers and producers. Major airlines like United Airlines, Southwest, JetBlue and Delta have pledged to incorporate sustainable fuels to decarbonize operations.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it