by The global Sustainable Aviation Fuel Market is estimated to be valued at US$ 740.76 Mn in 2023 and is expected to exhibit a CAGR of 61.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Sustainable aviation fuel, also known as alternative jet fuel, is a type of renewable fuel made from sustainable biomass sources such as used cooking oil, animal fats, and agricultural waste. It lowers carbon emissions and reduces air pollution compared to traditional jet fuel. Sustainable aviation fuel is a drop-in fuel, which means it can directly replace conventional jet fuel without any modifications needed for aircraft or fuel handling infrastructure. The growing environmental concerns and stringent emission norms are motivating airlines to increase the use of sustainable aviation fuel.
Market key trends:
One of the major trends in the sustainable aviation fuel market is the increasing emphasis on sourcing sustainable feedstocks. The aviation industry is focusing on developing sustainable aviation fuels primarily from waste fats and oils from used cooking oil, animal fat, and municipal waste. These feedstocks do not compete with food production and have lower lifecycle carbon emissions compared to conventional jet fuel. For instance, Neste has invested heavily in developing hydrotreated esters and fatty acids (HEFA) technology that converts waste and residue oils into sustainable aviation fuel.
Porter’s Analysis for Sustainable Aviation Fuel Market
Threat of new entrants: Low requirement for capital investment and new technologies like biofuel make it easy for new players to enter this market. However, the established manufacturing partnerships make it difficult for new players.
Bargaining power of buyers: Airlines have significant bargaining power as buyers due to the oligopolistic supply structure and differentiated demand for sustainable fuels. They can negotiate for better prices and work with suppliers closely.
Bargaining power of suppliers: A few major sustainable fuel producers control most of the global supply. This gives them strong bargaining power against airlines who are heavily dependent on them to achieve emission targets. However, increasing production will reduce supplier control over the long run.
Threat of new substitutes: Potential new zero-carbon emission technologies like hydrogen and electric planes pose a long-term threat. However, their commercialization and wider acceptance will take decades providing stability to sustainable aviation fuels market.
Competitive rivalry: High as major players are aggressively investing in expanding production facilities to cater to increasing demand and achieve long-term supply contracts with airlines.
Key Takeaways
The global Sustainable Aviation Fuel Market is expected to witness high growth, exhibiting CAGR of 61.% over the forecast period of 2023 to 2030, due to increasing environmental regulations on airlines to reduce emissions. The market size for 2023 is estimated at US$ 740.76 Mn.
North America dominates the sustainable aviation fuel market currently due to supportive government policies and initiatives by airports in the US and Canada to promote the use of sustainable fuels. However, Europe is also emerging as a major hub for sustainable aviation fuels owing to strong emission targets and investments by major oil companies in the region.
Key players operating in the Sustainable Aviation Fuel market are Neste, AEMETIS INC., Gevo, Shell PLC, Lanza Jet, and Sky NRG. Neste is the leading producer with largest refinery producing sustainable aviation fuel. AEMETIS and Gevo are focusing on developing cost-effective biodiesel to sustainable aviation fuel conversion technologies.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
