Report Description

Forecast Period

2025-2029

Market Size (2023)

USD 7.23 Billion

CAGR (2024-2029)

48.01%

Fastest Growing Segment

Hydroprocessed Esters and Fatty Acids (HEFA)

Largest Market

North America


Market Overview

The Global Renewable Aviation Fuel Market was valued at USD 7.23 Billion in 2023 and is growing at a CAGR of 48.01% during the forecast period. In order to enhance the development of Renewable Aviation Fuel, Renewable Aviation Fuel companies can consider expansion, collaboration, partnership, acquisition, and joint ventures. Furthermore, constantly evolving aviation engine technology can make the existing technology obsolete very soon. This can further intensify the industry rivalry among the prominent market players.

Since the count of Renewable Aviation Fuel providers (suppliers) is less in comparison to the count of buyers, the bargaining power of suppliers is relatively higher as compared to the bargaining power of buyers. Due to promising profit margins, the threat of new entrants in the Renewable Aviation Fuel market is considered to be moderate.

As per the U.S. Department of Energy (DOE), air travel accounts for nearly 175 million metric tons of CO2 emissions or about 2.6% of domestic Greenhouse gas (GHG) emissions each year in the United States. According to Environmental Protection Agency (EPA), large business jets and commercial airplanes contribute around 10% of US transportation emissions and account for almost 3% of the country’s total greenhouse gas (GHG) production. Thus, such high contributions of harmful emissions hinder market growth to some extent.

The use of aircraft is highly growing across logistics applications. Airlines transport over 52 million metric tons of goods each year. According to International Air Transport Association (IATA), approximately 90% of cargo in international trade is shipped via sea route, and only around 0.5% is transported by air. But this transport by air cargo translates to around 35% of world trade by value or nearly USD6 trillion in value. With an increasing demand for international products, the need for a safe and efficient air service is anticipated to rise enormously in the near future.

Key Market Drivers

Renewable Aviation Fuel is used for powering aircraft and various types of Renewable Aviation Fuels are the by-products of crude oil. The Renewable Aviation Fuel market is majorly driven by the rising trend of air travel and the expanding aviation sector in various developing nations. The development of the latest aviation biofuels and the increasing requirement for low-cost carriers are also anticipated to create notable opportunities for all the market players during the study period. Factors such as stringent environmental regulations along with fluctuating crude oil prices can hinder the Renewable Aviation Fuel market growth to a certain extent.

Increasing Investment

Increasing investment in the aviation sector, rising disposable income, and the growing tourism industry are some of the latest factors that are supporting the Renewable Aviation Fuel market substantially.

In an effort to develop sustainable Renewable Aviation Fuel, United Airlines and 5 corporate partners announced to invest USD 100 million in February 2023. GE Aerospace, Air Canada, Boeing, JPMorgan Chase, and Honeywell are the 5 corporate partners which would help in the development of sustainable Renewable Aviation Fuel.

As per the data from the U.S. Bureau of Economics, personal income increased by USD1.97 trillion (10.5%) and Disposable Personal Income (DPI) grew by USD2.13 trillion in April 2020. With rising income levels and expanding tourism sector, the number of air travelers is increasing rapidly across various nations of the world.

In 2023, Dubai received around 14.36 million international overnight visitors. This number is a 97% year-on-year (Y-o-Y) increase as compared to 7.28 million tourist arrivals in 2021. According to the World Tourism Organization, a specialized agency of the United Nations (UN), tourist arrivals in Maldives in January 2021 stood at 92,103. This count rose to 99,397 by 3rd February 2021. The growing count of tourists is creating promising scope for the aviation industry.