Sustainable Aviation Fuel Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Fuel Type (Biofuel, Hydrogen Fuel, Power to Liquid Fuel), By Technology Type (Fischer-Tropsch, Hydroprocessed Esters and Fatty Acids (HEFA), Synthetic Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT), By Application Market Share Analysis, By Region 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 2.21 Billion
CAGR (2026-2031)	60.27%
Fastest Growing Segment	Hydrogen Fuel
Largest Market	North America
Market Size (2031)	USD 37.45 Billion

Market Overview

The Global Sustainable Aviation Fuel Market will grow from USD 2.21 Billion in 2025 to USD 37.45 Billion by 2031 at a 60.27% CAGR. Sustainable Aviation Fuel constitutes a renewable liquid fuel derived from non-fossil feedstocks such as waste oils, agricultural residues, and carbon capture technologies, designed to significantly reduce lifecycle greenhouse gas emissions compared to conventional jet fuel. The market is fundamentally driven by stringent government environmental mandates and voluntary net-zero carbon commitments from global carriers, which necessitate the rapid integration of low-carbon energy sources. According to the International Air Transport Association, in 2024, sustainable aviation fuel production volumes reached 1.3 billion liters.

However, market expansion confronts a significant challenge regarding the high cost of production relative to fossil-based kerosene. This substantial price differential, compounded by limited feedstock availability and infrastructure constraints, impedes the scalability required for mass adoption. Consequently, these economic and logistical barriers restrict the ability of the aviation sector to consistently secure the supply volumes necessary to meet aggressive international decarbonization targets.

Key Market Drivers

The implementation of stringent regulatory mandates and blending targets acts as the primary catalyst for market growth by establishing a guaranteed demand floor. Governments are increasingly moving from voluntary guidelines to binding requirements, forcing fuel suppliers and airlines to incorporate renewable fuels into their operations. This regulatory pressure mitigates investment risk for producers by ensuring a long-term market for their output, essentially creating a compliance-driven consumption model that incentivizes rapid capacity expansion. According to the Civil Aviation Authority of Singapore, in February 2024, in the Singapore Sustainable Air Hub Blueprint, the regulator established a mandate requiring all flights departing the country to uplift 1 percent sustainable aviation fuel starting in 2026. Such policies directly accelerate infrastructure development and supply chain logistical planning to meet the stipulated deadlines.

Escalation of corporate net-zero pledges and long-term offtake agreements further solidifies market stability by providing the necessary revenue certainty for project financing. Airlines and logistics companies are aggressively securing future supply through multi-year contracts to meet their internal decarbonization goals and hedge against future price volatility. According to International Airlines Group, in February 2024, in a corporate press release, the company signed its largest agreement to date to purchase approximately 785,000 tonnes of e-SAF over fourteen years. These agreements are essential for bridging the price gap between conventional jet fuel and renewable alternatives. Consequently, the sector is witnessing significant capital inflow, where according to the U.S. Department of Energy, in October 2024, the Loan Programs Office announced a conditional commitment of up to $1.46 billion to support the construction of a large-scale sustainable aviation fuel facility.

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Key Market Challenges

The prohibitive cost of production for sustainable aviation fuel creates a formidable economic barrier that directly stifles market growth. Since the aviation industry operates on extremely thin profit margins, airlines are financially restricted from absorbing the significant price premium of renewable fuels over fossil-based kerosene. This fiscal reality makes carriers hesitant to commit to the long-term offtake agreements that producers require to secure financing for facility expansion. Without these guaranteed contracts, manufacturers cannot achieve the economies of scale necessary to lower unit costs, resulting in a stagnant cycle of low supply and high prices that prevents widespread adoption.

Consequently, this pricing disparity limits the ability of the sector to transition beyond pilot programs to commercial viability. The financial gap discourages necessary infrastructure investment and keeps renewable options as a luxury rather than a standard commodity. According to the International Air Transport Association, in 2025, the price of sustainable aviation fuel exceeded that of conventional jet fuel by a factor of two, with the cost differential rising to as much as five times in markets subject to strict usage mandates. This persistent premium severely constrains procurement volumes, ensuring that actual usage remains a fraction of what is needed to meet global decarbonization goals.

Key Market Trends

The Commercialization of Alcohol-to-Jet (AtJ) Production Pathways is fundamentally reshaping the market by alleviating the feedstock scarcity associated with hydroprocessed esters and fatty acids. Unlike limited waste oil supplies, AtJ utilizes widely available ethanol from agricultural sources, allowing producers to bypass the saturation points of current lipid-based supply chains and unlock the vast volumes of feedstock essential for meeting global demand. This technological maturation is rapidly transitioning from pilot phases to industrial-scale operations, proving the viability of non-lipid pathways. According to LanzaJet, in January 2024, in a company press release, the producer opened Freedom Pines Fuels, the world’s first commercial-scale ethanol-to-jet facility, with a nameplate production capacity of 10 million gallons per year.

The Accelerated Development of Power-to-Liquid (PtL) E-Fuels is simultaneously gaining momentum as the industry seeks to transcend the long-term scalability limitations of all biomass-based feedstocks. PtL technology leverages renewable electricity and captured carbon dioxide to produce synthetic kerosene, offering a production route with theoretically unlimited potential that is independent of agricultural yields or waste availability. This trend is characterized by a surge in large-scale commercial project announcements aimed at securing future volumes for markets with high blending mandates. According to SkyNRG, in September 2024, in a partnership announcement, the company revealed plans to develop the SkyKraft project in Sweden, which targets an annual production capacity of 100,000 tonnes of e-SAF.

Segmental Insights

Based on recent market intelligence, the Hydrogen Fuel segment is projected to emerge as the fastest-growing category within the Global Sustainable Aviation Fuel Market. This accelerated expansion is primarily driven by the industry's intensifying focus on achieving absolute zero-emission operations rather than the net-zero reductions offered by conventional drop-in biofuels. Rapid technological advancements in hydrogen fuel cell efficiency and liquid storage capabilities are significantly enhancing commercial viability for future fleet integration. Furthermore, robust strategic investments by major aerospace manufacturers, aligned with rigorous long-term decarbonization goals set by the International Civil Aviation Organization, are actively catalyzing the adoption of hydrogen propulsion systems.

Regional Insights

North America holds the leading position in the global sustainable aviation fuel market, driven by comprehensive government support and established production capabilities. The region benefits significantly from United States legislation such as the Inflation Reduction Act, which provides crucial tax credits to incentivize manufacturing and distribution. Additionally, the Renewable Fuel Standard program managed by the Environmental Protection Agency fosters market stability by mandating volume targets for alternative fuels. These strategic regulatory frameworks, alongside rising demand from commercial airlines seeking to lower carbon emissions, ensure North America remains the central hub for market expansion.

Recent Developments

• In December 2025, Shell signed a long-term agreement to purchase sustainable aviation fuel from Green Sky Capital, a renewable fuel developer. This collaboration provides the commercial certainty required to construct Egypt's first commercial-scale SAF facility, located in the Suez Canal Economic Zone. The plant is expected to commence operations by the end of 2027 and will produce up to 145,000 tons of SAF annually alongside other bio-products. The agreement strengthens Shell's global supply network and supports the aviation sector's decarbonization targets in the Middle East and Africa region.
• In April 2025, Neste commenced the production of sustainable aviation fuel at its renewable products refinery in Rotterdam, Netherlands. Following extensive modifications, the facility now possesses the capacity to produce up to 500,000 tons of SAF annually, significantly boosting the company's global production capabilities. This launch enables the company to better support the aviation industry's transition to lower-carbon fuels and meet growing demand driven by regulations such as ReFuelEU Aviation. The site is part of a broader expansion to establish a major renewable fuels hub in Europe to serve international markets.
• In October 2024, Southwest Airlines announced a sustainable aviation fuel supply agreement with Valero Marketing and Supply Company. The deal facilitates the supply of up to 25 million gallons of SAF for use at Chicago Midway International Airport, marking the largest announced SAF supply agreement in Illinois. The neat SAF, produced from waste fats and oils, will be blended with conventional jet fuel and delivered via existing infrastructure. This collaboration aligns with the airline's goal to replace a portion of its jet fuel consumption with sustainable alternatives by 2030 and significantly lower lifecycle greenhouse gas emissions.
• In February 2024, TotalEnergies and Airbus signed a strategic partnership to advance the decarbonization of the aviation sector. The agreement involves the supply of sustainable aviation fuel (SAF) by the energy company for more than half of the aircraft manufacturer's needs in Europe. Additionally, the collaboration includes a research and innovation program focused on developing 100% sustainable fuels tailored to current and future aircraft designs. The partners also aim to study the impact of SAF composition on reducing carbon dioxide emissions and non-CO2 effects, such as contrails, thereby supporting the industry's net-zero goals.

Key Market Players

• Shell PLC
• Neste Oyj
• SkyNRG
• Gevo Inc.
• AV Fuel Corporation
• Aematis Inc.
• Fulcrum BioEnergy Inc.
• LanzaTech Inc
• Velocys, Inc.
• Red Rock Biofuels

By Fuel Type	By Technology Type	By Region
Biofuel Hydrogen Fuel Power to Liquid Fuel	Fischer-Tropsch Hydroprocessed Esters and Fatty Acids (HEFA) Synthetic Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT)	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Sustainable Aviation Fuel Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Sustainable Aviation Fuel Market, By Fuel Type:

• Biofuel
• Hydrogen Fuel
• Power to Liquid Fuel

• Sustainable Aviation Fuel Market, By Technology Type:

• Fischer-Tropsch
• Hydroprocessed Esters and Fatty Acids (HEFA)
• Synthetic Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT)

• Sustainable Aviation Fuel Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE