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The sustainable aviation fuel (Saf) market size is forecast to increase by USD 5.29 billion at a CAGR of 75.62% between 2024 and 2028. The aviation industry is undergoing significant transformations driven by key market trends. These include the exploration of third-generation biofuels, which offer more sustainable energy solutions, and the implementation of stricter environmental regulations aimed at reducing carbon emissions. Additionally, there is a strong focus on enhancing airline efficiency through optimized operational practices. These changes are pivotal as the industry strives to promote sustainability and reduce its environmental impact. The combined efforts towards adopting greener fuels and improving efficiency reflect a broader commitment to environmental responsibility and innovation within the aviation sector, ensuring a more sustainable future for air travel.
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The exploration of third-generation biofuels is a significant trend in the market. Unlike first-generation biofuels from vegetable oil and animal fats, and second-generation biofuels from feedstock, third-generation biofuels are derived from algae, offering various advantages over other sources. Algae-derived biofuels include biodiesel, butanol, gasoline, methane, ethanol, vegetable oil, and jet fuels, providing higher quality and greater yield. The cultivation of microalgae for biofuel production, with its high lipid content, further expands the potential of sustainable aviation fuel, driving growth in the market during the forecast period. The integration of these advanced fuels with cutting-edge technology is expected to play a crucial role in the expansion of the market growth and trends during the forecast period.
The biofuel segment is estimated to witness significant growth during the forecast period. There has been a focus by regulatory bodies like grading aircraft based on carbon emissions and pollution to reduce emissions by the aviation industry. Hence there has been an increasing focus by aircraft and aircraft component manufacturers to reduce aircraft emissions, which is likely to result in the growth of the market. Various stakeholders are involved in making the energy requirements of the aviation industry sustainable. They include the International Civil Aviation Organization (ICAO) and the Commercial Aviation Alternative Fuels Initiative (CAAFI) which are working to make sustainable aviation biofuel more commercially viable.
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The biofuel segment was the largest segment and was valued at USD 55.60 million in 2017. Despite being a possible alternative to conventional fuels, biofuels have limitations such as low availability and various challenges such as lobbying from the conventional fossil fuels market. However, the increased government emphasis on targets and incentives is likely to improve the growth of the global aviation biofuel market during the forecast period.
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North America is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The robust aviation base in North America and the global demand for new aircraft has resulted in substantial investment in manufacturing more efficient aircraft systems. This is likely to have an impact on the SAF market in the region, especially in the US. The US is predicted to be the global leader in integrated biorefinery manufacture that can generate bio-based jet fuel and marine distillates. To improve the economic viability and expand R and D into the SAF Market, incentives like special category loans, grants, and funds have been used. This support has expanded research in the market and expanded the viability of the SAF market by improving biodiesel quality. Additionally, due to the high market rates of biodiesel, the government provides subsidies and other incentives for its usage. All these factors are likely to result in the growth of the market during the forecast period.
The relays market is poised for growth, driven by the increasing adoption of hydrogen fuel cells in various sectors of the aviation industry. This includes military aviation, business and general aviation, and airline operations. The use of hydrogen fuel cells is revolutionizing air transportation by offering a cleaner and more sustainable alternative to traditional fuel sources. As the demand for greener technologies continues to rise in the transportation sector, the relays market is expected to expand significantly.
Favorable government policies are driving the market growth. Environmental and energy security concerns have increased the demand for renewable fuels like cellulosic ethanol and biodiesel. Governments in countries such as Germany and India are actively promoting their use through targets and incentives. For instance, the EU's Renewable Energy Directive aims for 10% of transportation energy from renewables by 2020. Tax credits and grants further incentivize adoption, leading to increased production and consumption globally. This trend is expected to continue driving the market growth during the forecast period.
The market growth is hindered by the higher cost of production compared to conventional fuels. Current technology for production is inefficient and not economical, requiring a more sustainable and efficient processing technique. Electric vehicles are considered a more economical and sustainable alternative, posing challenges fuels in carbon emission reduction. The ever-dynamic energy landscape and high costs are impeding market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Eni SpA - The company aviation fuels such as Eni Biojet.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
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The market is experiencing significant growth due to the increasing focus on sustainability and the aviation industry's efforts to combat climate change. Regulatory initiatives and mandates are driving airline adoption of greener technologies to reduce greenhouse gas emissions. This includes the exploration of renewable feedstocks and the assessment of lifecycle carbon emissions of traditional jet fuels. Meeting international climate goals requires reducing production costs to make sustainable fuels economically competitive. Achieving widespread adoption of biofuels involves developing suitable fuel blends and adhering to sustainability standards.
Furthermore, infrastructure investments are crucial for the technological scalability of metafuels. Entities like Energy Impact Partners and Contrarian Ventures are investing in this sector to promote sustainable solutions for commercial flights and reduce carbon dioxide emissions. This transformation necessitates collaboration between petroleum refineries, biofuels facilities, fuel terminals, pipelines, and airports to meet fuel quality standards and overcome blending limitations.
Similarly, the unmanned aerial vehicle (UAV) market is growing, driven by the need for efficient and cost-effective solutions in various industries. The UAV industry benefits from the Renewable Fuel Standard (RFS), which encourages the use of biofuels in aviation. This shift impacts petroleum refinery, pipeline, airport, and fuel operations, as they adapt to accommodate renewable fuel requirements.
Market Scope |
|
Report Coverage |
Details |
Page number |
180 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 75.62% |
Market growth 2024-2028 |
USD 5.29 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
61.87 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 42% |
Key countries |
US, Germany, China, Canada, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aemetis Inc., Alder Energy LLC, Chevron Corp., Cummins Inc., Deutsche Lufthansa AG, Eni SpA, Fulcrum BioEnergy Inc., Gevo Inc., LanzaTech Global Inc., Neste Corp., OMV Aktiengesellschaft, Pan Oleo Energy Ltd., Preem Holdings AB, Sasol Ltd., Shell plc, SkyNRG BV, SYNHELION SA, TotalEnergies SE, Velocys Plc, and World Energy LLC |
Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID --19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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