by The sustainable aviation fuel market is estimated to be valued at US$ 460.1 million in 2022 and is expected to exhibit a CAGR of 61% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Sustainable aviation fuel is a type of biofuel used to power aircraft. It is produced from sustainable resources such as waste oils, agricultural residues, algae, and forestry residues. It has similar properties to traditional jet fuel but produces lower carbon emissions. Major airlines and aircraft manufacturers are focusing on developing technologies to allow higher blends of sustainable fuels and reduce their carbon footprint.
Market Dynamics:
The sustainable aviation fuel market is expected to witness significant growth over the forecast period owing to increasing governmental support and regulations to reduce carbon emissions from the aviation industry. Various countries and international agencies have introduced policies and incentives to promote the production and usage of sustainable aviation fuels. For instance, the “Commercial Aviation Alternative Fuels Initiative” by the U.S. Federal Aviation Administration provides research support and incentives. Stringent emission norms by European Union for aviation are also compelling airlines to use higher blends of sustainable fuels. In addition, growing emphasis on environmental sustainability and initiatives by leading airlines to reduce their carbon footprints are fueling the adoption of sustainable aviation fuels.
SWOT Analysis:
- Strength: Three sentence explanation about strengths. Sustainable aviation fuel provides environmental benefits by reducing carbon emissions. Strong government support and incentives are driving adoption. Airlines’ commitments to reduce carbon footprint fuel demand growth.
- Weakness: Three sentence explanation about weaknesses. Limited supply due to nascent production capabilities. Requires significant capital investment to develop commercial production facilities. Higher production costs compared to conventional jet fuel.
- Opportunity: Three sentence explanation about opportunities. Growing concerns about the environmental impact of air travel are driving airline commitments. New production technologies promise to lower costs and drive greater commercial viability. Supportive policies envision targets and mandates for sustainable aviation fuel blending.
- Threats: Two sentence explanation about threats. Volatility in oil prices impacts costs and commercial viability. Potential changes to government policies could reduce incentives and support.
Key Takeaways:
The Global Sustainable Aviation Fuel Market Size is expected to witness high growth, exhibiting CAGR of 61% over the forecast period, due to increasing concerns around reducing carbon emissions from air travel. Airlines commitments to cut carbon emissions by 50% from 2005 levels by 2050, are expected to drive the demand for sustainable aviation fuel.
The North America region currently dominates the sustainable aviation fuel market, holding over 35% share in 2022. The USA is the global leader in sustainable aviation fuel production and offtake, supported by strong political will and incentives. Asia Pacific is expected to be the fastest growing regional market stimulated by emerging production facilities and expanding airline networks in countries such as India and China.
Key players operating in the sustainable aviation fuel market are Neste, AEMETIS INC., Gevo, Shell PLC, Lanza Jet, and Sky NRG. Major oil companies such as Neste and Shell are investing to establish commercial production capabilities through partnerships across the supply chain. Newer entrants such as Aemetis, LanzaJet and Gevo are advancing innovative conversion technologies to convert renewable feedstock into sustainable aviation fuel.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
