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, also known as biofuel, is a renewable fuel produced from biological sources rather than traditional jet fuel which is made from fossil fuels. It has the potential to significantly reduce greenhouse gas emissions from air travel. Sustainable aviation fuel is chemically identical to petroleum-based jet fuel but consists of biomass or other waste feedstocks. It can directly replace conventional jet fuel without any engine modification.

Market Dynamics:

Government support for reducing carbon emissions from aviation has been a key growth driver for the sustainable aviation fuel market. Many countries have introduced policies and incentives for sustainable fuel production and use. For instance, tax incentives in the United States aim to stimulate production of sustainable fuels and their competitiveness against petroleum-based jet fuels. Additionally, commitments by aviation industries and companies to achieve net-zero carbon emissions by 2050 are also fueling market growth. Major airlines have joined initiatives like the Sustainable Aviation Fuel Users Group (SAFUG) to collaboratively address sustainability challenges and accelerate the deployment of sustainable jet fuels. Increase in dedicated flights run completely or partially on sustainable fuels indicate burgeoning demand.

Segment Analysis:

The sustainable aviation fuel market is segmented into biofuel and synthetic fuel. The biofuel segment dominates the market and accounts for over 70% share owing to the wide availability of biomass feedstock, which is used in the production of biofuel. Additionally, biofuel offers significantly lower life cycle greenhouse gas emissions as compared to conventional jet fuel.

PEST Analysis

• Political: Stringent environmental regulations regarding emission reductions and tax incentives for sustainable fuel production are boosting the adoption of sustainable aviation fuel.
• Economic: High production cost of sustainable aviation fuel as compared to conventional jet fuel is a major challenge. However, the growing awareness about cost advantage of sustainable fuel over the long-run is driving its demand.
• Social: Increasing concern about climate change and environmental protection is compelling airline operators and aviation industry to reduce their carbon footprint and dependence on fossil fuels. This is positively impacting the sustainable aviation fuel market.
• Technological: Continuous technological advancements in biomass liquefaction processes and Power-to-Liquid pathways will help reduce the cost of production and drive the large-scale commercialization of sustainable aviation fuels in the coming years.

Key Takeaways:

The Global Sustainable Aviation Fuel Market Demand is expected to witness high growth, exhibiting CAGR of 61% over the forecast period 2023-2030, due to increasing regulations regarding carbon emission cuts in the aviation industry.

The market size for sustainable aviation fuel was valued at US$ 460.1 million in 2022. Regionally, North America dominates the market currently due to presence of supportive policies and incentives. However, Europe is expected to witness the fastest growth on account of strong carbon reduction goals.

Key players operating in the sustainable aviation fuel market are Neste, AEMETIS INC., Gevo, Shell PLC, Lanza Jet, and Sky NRG. Neste and Shell are the dominant players in the market due to their vast production and supply network of sustainable aviation fuel globally.

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