31 May 2023

GreenAir News

Reporting on aviation and the environment

$30 billion SAF market and 30-fold increase in global production by 2030, forecasts report

A report by US-based sustainability analytics group cCarbon has forecast a 30-fold increase in global production of sustainable aviation fuel by 2030. Its analysts have calculated a rise from 538 million litres in 2022 to 18.2 billion litres in 2030, a compound annual growth rate of 55.3%, and estimate the SAF market’s value will reach $29.7 billion by the same year, up from $1.1 billion last year. The report assesses that in 2022, 60% of global SAF production was in Europe, followed by North America at 33% and Asia-Pacific at 7%, with both South America and the Middle East regions producing no SAF. But by 2030, in a much larger market, cCarbon calculates that North America will produce 36% of the world’s SAF, followed by Europe with 32%. Asia-Pacific, the largest and fastest-growing air transport region, will jump to 17% of global SAF production and South America to 12%, while oil-rich Middle East markets are forecast to produce 3%.

The primary reason for the steep increase in SAF production is the growing requirement for the air transport industry to reduce its greenhouse gas emissions and the resultant increase in demand, says the report. By 2030, SAF blending mandates will have been in place and escalating for five years in European Union member states, and potentially other countries, while many airlines will be reaching commitments made for SAF to comprise 10% of their total jet fuel use, an interim milestone on the industry path to net zero carbon emissions by 2050.

The report by cCarbon – an information service covering carbon and fuels markets in North America – tracked both supply and demand data as the basis for its conclusions, using 2022 as its research base year, 2019-2022 as its review period and 2023-2030 as its forecast period. It obtained supply-side information by tracking commitments of SAF plants, both active and planned, and calculated demand by tracking global SAF offtake agreements. Through this research, cCarbon found the number of SAF agreements spiked by 360% in 2021 and a further 83% in 2022, while volumes registered growth rates of 1,361% in 2021 and 126% in 2022. Based on offtake agreements, cCarbon said global SAF consumption last year was 494 million litres.

“Greenhouse gas (GHG) emissions from the aviation industry constitute nearly 2% of the global GHG emissions and approximately 11% of the transportation industry,” says the report. “To scale SAF to meet the demand, a lot of things need to happen, and happen fast.” One of the main impediments to increased SAF demand and production is the high cost of the fuel, cautions cCarbon, which added prices would still be high in 2030 because of limited regional supply. It also listed nine SAF production pathways, which added further layers of complexity in making fuels available and affordable.

As well, the lack of appropriate infrastructure was identified as a major issue. “SAF requires specialised storage, handling and distribution systems, which are not yet widely available at airports and other aviation facilities,” says cCarbon. “To address this issue, the aviation industry must invest in the development and deployment of SAF infrastructure to make it a viable option for airlines and other stakeholders.”

The cCarbon assessment follows last year’s US-specific Flight Plan for Sustainable Aviation Fuel produced by the Biden Administration, which outlined measures required to accelerate SAF production from 5 million gallons in 2021 to 3 billion gallons by 2030, “a 600-fold increase that requires a 122% year-over-year growth in production,” calculates the report.

Additionally, the US plan targets SAF production of 35 billion gallons per year by 2050, which it estimates will require more than 400 biorefineries and 1 billion tons of biomass and/or gaseous feedstock.

The plan also stipulates that the 3 billion gallons of SAF required by 2030 must deliver a minimum 50% reduction in lifecycle greenhouse gas emissions compared to standard fossil-based jet fuels, with that requirement doubling to 100% of projected jet fuel consumption in 2050.  

“It is critical that this growth starts immediately,” said the US roadmap report. “Given the limited time to meet the 2030 goal, and considering the time required for SAF production infrastructure to be built, the path to meeting the 2030 goal requires an immediate focus on commercially-ready conversion technologies and feedstocks. Lipid-based pathways (fats, oils and greases) are expected to be the primary fuel pathway leading up to 2030, with a smaller contribution from waste, forest and agricultural residue, and alcohol pathways.

“The path to meet the goals beyond 2030 to 2050 requires a continuing focus on supporting ongoing innovation, including research, development and demonstration of new feedstock and conversion technologies with potential for exponential growth in production capacity, greater emissions reductions and reductions in cost of production and carbon intensity after 2030.”

Photo: United Airlines