London: The aviation sector faces major challenges scaling Sustainable Aviation Fuel (SAF), despite its 80% carbon reduction potential. With costly production and supply hurdles, Middle Eastern investments and new European mandates aim to accelerate adoption towards global net-zero targets by 2050.
The aviation industry stands at a pivotal moment in its pursuit of sustainability, driven by the urgent need to address its significant carbon footprint. Responsible for approximately 2 to 3 per cent of global CO₂ emissions, the sector’s decarbonisation efforts have intensified, with Sustainable Aviation Fuel (SAF) emerging as a leading solution. Unlike conventional jet fuel, SAF has the potential to reduce lifecycle greenhouse gas emissions by up to 80 per cent, deriving from renewable or waste-based sources such as used cooking oil, municipal waste, agricultural residues, and even carbon directly captured from the air.
SAF’s appeal is largely due to its compatibility with existing aircraft and refuelling infrastructure, allowing it to be used as a direct ‘drop-in’ replacement without necessitating costly modifications. This practical advantage is instrumental in facilitating more immediate adoption across airlines and airports, which are increasingly integrating SAF into their sustainability strategies. Governments worldwide, including those in the United States, the United Kingdom, and the UAE, have introduced national policies and incentives designed to foster investment in SAF production technologies. The Middle East region, in particular, is positioning itself as a key player, with significant capital and feedstock resources that could enable the Gulf to produce up to 700 million litres of SAF annually by 2030, aligning with broader regional sustainability goals such as Saudi Arabia’s Vision 2030 and the UAE’s Net Zero 2050 initiatives.
International bodies also underscore the critical role of SAF in aviation’s net-zero ambitions. The International Air Transport Association (IATA) projects that SAF will account for roughly 65 per cent of the emissions reductions needed by the aviation sector to achieve net-zero CO₂ emissions by 2050. However, reaching this target requires a monumental scale-up in production capability and demand, particularly in the 2030s, when supportive policies are expected to be harmonised globally and SAF becomes more economically competitive with fossil kerosene. The International Civil Aviation Organization (ICAO) supports these frameworks, advocating for coordinated policies, regulatory frameworks, and financing mechanisms tailored to advance SAF deployment while targeting a 5 per cent emissions reduction in international aviation by 2030 and net-zero carbon emissions by 2050.
Despite the strong momentum, the path to widespread SAF adoption faces significant hurdles. Production costs remain high, often exceeding four times those of traditional jet fuel, primarily due to the nascent supply chain and capital-intensive nature of SAF refineries. The ‘chicken and egg’ dilemma persists, where producers are hesitant to ramp up production without assured demand, while fuel consumers are reluctant to pay a green premium amid volatile conventional jet fuel prices. Current SAF accounts for a small fraction of renewable fuel production, estimated at just 3 per cent in 2023, with projections to reach only 6 per cent in 2024—far below the 25 to 30 per cent supply capacity needed for aviation to maintain a viable trajectory towards net zero.
The economic and operational challenges are compounded by the complexities of feedstock procurement and energy requirements for SAF production. Developing efficient, low-carbon supply chains for raw materials such as waste oils and biomass is crucial, alongside securing reliable and affordable inputs like electricity and hydrogen for refining. Additionally, the lack of long-term, financially recognized offtake agreements hinders investment, as financial markets perceive SAF projects as risky ventures without stable purchase commitments.
To overcome these barriers, industry experts advocate for a mix of regulatory mandates, aligned with fiscal incentives, to reduce production costs and incentivise both supply and demand. Encouragingly, market participants such as private aviation operators may play a pivotal role in jump-starting SAF adoption, given their relative flexibility on pricing and capacity to absorb higher fuel costs compared to commercial airlines. Meanwhile, regional actors in the Middle East are investing in SAF-ready infrastructure and fostering public-private partnerships to ensure the sector remains competitive and sustainable in a regulatory environment that increasingly favours green alternatives.
In this transition phase, the mandate introduced in Europe in January 2025—requiring certain operators to blend a minimum 2 per cent SAF into fuel at designated airports—exemplifies early regulatory efforts to drive uptake, although some operators remain constrained by limited supply. The industry consensus is clear: while the challenges of scaling SAF are formidable, the fuel’s potential to serve as a cornerstone of aviation’s green transition is undeniable. Collective action, innovation, and harmonised policies will be essential in shifting from promising pilot projects to full-scale commercial viability, securing a more resilient and environmentally responsible future for global aviation and air cargo.
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Source: Noah Wire Services
- https://www.cargotalkgcc.com/post/aviation-sector-on-green-transition-path – Please view link – unable to able to access data
- https://www.iata.org/en/programs/sustainability/sustainable-aviation-fuels/ – The International Air Transport Association (IATA) estimates that Sustainable Aviation Fuel (SAF) could contribute around 65% of the reduction in emissions needed by aviation to reach net-zero CO₂ emissions by 2050. This will require a massive increase in production to meet demand. The largest acceleration is expected in the 2030s as policy support becomes global, SAF becomes competitive with fossil kerosene, and credible offsets become scarcer. Government policy has an instrumental role to play in the deployment of SAF. IATA encourages policies that are harmonized across countries and industries, while being technology and feedstock agnostic. Incentives should be used to accelerate SAF deployment. As SAF is in the early stages of market development, mandates should only be used if they are part of a broader strategy to increase the production of SAF and complemented with incentive programs that facilitate innovation, scale-up, and unit cost reduction.
- https://www.pgim.com/investments/article/credit-and-decarbonization-impacts-sustainable-aviation-fuel – The aviation industry contributes about 6% to total global warming annually, with the overwhelming majority of its negative environmental impacts stemming from the industry’s reliance on conventional jet fuel. While sustainable aviation fuel (SAF) will be essential to materially decarbonize aircraft travel, the pace of SAF uptake has been remarkably slow. This means that many airlines—already facing headwinds from rising labor costs and volatile commodity prices—may find it difficult to meet their publicized decarbonization goals. The pace of air travel decarbonization is likely to be governed by the availability and evolving economics of sustainable aviation fuel. SAF is a liquid fuel currently used in commercial aviation which reduces CO₂ emissions by up to 80%. It can be produced from a number of sources (feedstock) including waste oil and fats, green and municipal waste, and non-food crops. It can also be produced synthetically via a process that captures carbon directly from the air. It is ‘sustainable’ because the raw feedstock does not compete with food crops or water supplies, or is responsible for forest degradation. Whereas fossil fuels add to the overall level of CO₂ by emitting carbon that had been previously locked away, SAF recycles the CO₂ which has been absorbed by the biomass used in the feedstock during the course of its life.
- https://www.icao.int/environmental-protection/sustainable-aviation-fuels-saf – Sustainable aviation fuels (SAF) are defined as renewable or waste-derived aviation fuels that meet sustainability criteria. Technical analysis done at ICAO shows that SAF has the greatest potential to reduce CO₂ emissions from International Aviation. ICAO is working to facilitate SAF development and deployment through the four building blocks of the ICAO Global Framework for SAF, LCAF, and other Aviation Cleaner Energies: 1) Policy and Planning – SAF policies and goals. The ICAO Global Framework for Sustainable Aviation Fuels (SAF), Lower Carbon Aviation Fuels (LCAF), and other Aviation Cleaner Energies includes a collective global aspirational Vision to reduce CO₂ emissions in international aviation by 5% by 2030, compared to zero cleaner energy use. The framework, agreed at the Third ICAO Conference on Aviation and Alternative Fuels, is built across four building blocks: policy and planning; regulatory frameworks; implementation support; and financing. These building blocks are interconnected and need to advance and work together to achieve their intended purpose. Long-term global aspirational goal (LTAG): The 41st ICAO Assembly adopted a long-term global aspirational goal (LTAG) for international aviation of net-zero carbon emissions by 2050 in support of the UNFCCC Paris Agreement’s temperature goal. This historic agreement reinforces the leadership of ICAO on issues relating to international aviation and climate change. The adopted Resolution A41-21 is available here. The LTAG report shows that SAF has the greatest potential to reduce CO₂ emissions from International Aviation. The LTAG and fuels website details the fuels-related information contained in the LTAG analysis.
- https://www.aviationpros.com/ground-support-worldwide/ground-handling/fuel-distributors-suppliers-manufacturers/sustainable-aviation-fuel/article/53082459/hurdles-and-solutions-for-adopting-saf – The SAF supply chain faces a ‘chicken and egg’ problem with supply and demand: costs will come down if production scales up, but fuel providers are lacking a consistent demand signal to increase production and demand is low due to the high price premium. Ashleigh McDougall, head of Europe and South Africa at Shell Aviation, explained in a Q&A interview with AviationPros. McDougall added that Shell Aviation officials believe government and industry mandates are essential and can help encourage SAF adoption. Mandates should ideally be aligned globally, technology agnostic, be ambitious but consistent with pace to build supply capabilities and infrastructure and increase over time as production scales up. Once mandates are in place as a foundation, we can begin to add the other measures to complement them, such as fiscal incentives. According to the International Air Transport Association (IATA), SAF volumes in 2023 reached over 600 million liters, double the amount produced in 2022. IATA also reported that SAF accounted for 3% of all renewable fuels produced, with 97% of renewable fuel production going to other sectors. In 2024, IATA estimated SAF production is expected to triple to 1.875 billion liters, accounting for 0.53% of aviation’s fuel need, and 6% of renewable fuel capacity. The small percentage of SAF output as a proportion of overall renewable fuel is primarily due to the new capacity coming online in 2023 being allocated to other renewable fuels. IATA officials explained. The doubling of SAF production in 2023 was encouraging as is the expected tripling of production expected in 2024. But even with that impressive growth, SAF as a portion of all renewable fuel production will only grow from 3% this year to 6% in 2024. This allocation limits SAF supply and keeps prices high. Aviation needs between 25% and 30% of renewable fuel production capacity for SAF. At those levels aviation will be on the trajectory needed to reach net zero carbon emissions by 2050. Until such levels are reached, we will continue missing huge opportunities to advance aviation’s decarbonization.
- https://www.earthfinance.com/insights/overcoming-sustainable-aviation-fuel-roadblocks – For the most part, airlines and industry groups recognize the importance of low-carbon fuels in decarbonizing the aviation sector, have set goals, and want access to products like SAF. However, there are sizeable hurdles to address: Lack of production: In today’s volatile economy, SAF producers are navigating several “valleys of death.” Building a SAF production facility isn’t cheap. To stand up a commercially viable refinery, producers need access to huge amounts of capital – anywhere from hundreds of millions to billions of dollars. Capital costs aside, producers also need durable, supportive policies to incentivize the creation of less GHG-intensive fuels, minimize the green premium, and drive cost parity with conventional jet fuel. For instance, the US Inflation Reduction Act’s Clean Fuel Production Credit (CFPC) offers great incentives but expires in 2027, long before most producers will even be producing fuel. Justifying the green premium: Commercial aviation is a very competitive industry with limited margins, and over 30% of annual operating expenses are spent on fuel. When you’re buying billions of gallons of fuel, even a tenth of a cent difference in price per gallon makes a big impact. But the problem isn’t just that SAF is more expensive than traditional jet fuel, per se (although this is often the case). It’s that the cost of conventional jet fuel fluctuates with the volatility of the crude oil market, whereas new SAF producers must price their fuel with a floor to guarantee revenue certainty for investors. So, even though the cost of crude oil changes daily and is closely tied to geopolitics, there’s no competitive advantage or disadvantage because everyone is ultimately paying the same price. This creates a dynamic where, in some cases, offtakers (commercial airlines, private aviation, and other jet fuel users) see it as advantageous to pay more for conventional fuel than SAF so long as they know their competitors are paying the same price. The price per gallon of SAF could be lower than jet fuel today, but that might not be true tomorrow, and you could end up paying more per gallon for SAF if there’s a sustained dip in the conventional jet fuel market. There’s also the issue of scale – if you’re only using SAF for 1% of your fuel, that probably isn’t too concerning. Transforming your entire operations is a different question altogether. Food for thought: Can private aviation jump-start the SAF market? While commercial aviation may not have the appetite to tackle SAF’s green premium, private aviation companies can be less price-sensitive. Fuel accounts for a smaller portion of their overall costs, and their customer base may be willing to accept higher fares for sustainable travel. This gives them a unique opportunity to help jump-start the market and give SAF the initial support it needs to begin scaling production and reducing costs to the point of mass adoption. Availability of feedstocks and energy: The feedstocks used to create SAF (fats, waste, biomass, etc.) can be challenging to procure and transport. Many of these products are thrown away after use, meaning new, low-carbon supply chains must be created to transport, blend, and distribute them. No matter what production pathway is used, refineries also require an immense amount of energy, both electricity and hydrogen, which are often expensive and in limited supply. Securing recognizable, mutually beneficial offtakes: Not all offtakes are created equal. SAF projects are still very risky in the eyes of banks and investors, and an airline or offtaker’s financial standing in the marketplace significantly impacts the value of a particular offtake agreement. As a result, lenders don’t always recognize their validity. If these agreements are recognized, a shorter term creates higher interest rates (like a mortgage) and, ultimately, a higher cost per gallon of SAF, which further jeopardizes the ability to sign a large volume, long-term deal.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The narrative presents recent developments in the aviation sector’s green transition, including the UAE’s ‘Air-CRAFT’ initiative announced in November 2023 ([esgnews.com](https://esgnews.com/uae-forges-global-leadership-in-sustainable-aviation-fuel-with-air-craft-initiative/?utm_source=openai)) and the IATA’s report on SAF production growth in December 2024 ([internationalairportreview.com](https://www.internationalairportreview.com/news/232770/iata-reveals-saf-production-growth-in-2024-urges-acceleration-to-meet-decarbonisation-targets/?utm_source=openai)). However, the article also references earlier data, such as the IATA’s projections from June 2024 ([ainonline.com](https://www.ainonline.com/aviation-news/aerospace/2024-06-05/iata-industry-track-triple-saf-output-2024?utm_source=openai)), which may indicate recycled content. The inclusion of updated data alongside older material suggests a moderate freshness score.
Quotes check
Score:
8
Notes:
The article includes direct quotes from reputable sources, such as the IATA’s Director General, Willie Walsh, expressing concerns about the slow growth of SAF production and the need for government support ([iata.org](https://www.iata.org/en/pressroom/2024-releases/2024-12-10-03?utm_source=openai)). These quotes are consistent with statements made in other reputable outlets, indicating originality.
Source reliability
Score:
6
Notes:
The narrative originates from CargoTalk GCC, a regional publication focusing on the cargo and logistics industry. While it provides industry-specific insights, its regional focus and limited global reach may affect its overall reliability. The article references reputable organizations like the IATA and ICAO, which adds credibility.
Plausability check
Score:
7
Notes:
The claims about the aviation sector’s efforts towards sustainability, including the adoption of SAF and the challenges faced, align with information from other reputable sources. However, the article’s tone and structure, with extensive detail and a focus on regional initiatives, may raise questions about its objectivity and potential bias.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative presents a mix of recent developments and recycled content, with direct quotes from reputable sources supporting its claims. While the inclusion of updated data suggests a moderate freshness score, the regional focus and potential bias of the source publication warrant further scrutiny.
