SkyNRG and ICF warn of “HEFA tipping point” as SAF feedstock demand soars

SkyNRG, a prominent supplier and emerging producer of sustainable aviation fuels, has highlighted a global shortage beyond 2030 of waste fats, oils and greases, currently the primary feedstock for SAF production, and urged accelerated transition to alternative pathways to meet soaring demand for the new fuels. In its 2025 SAF Market Outlook, produced in collaboration with global business consultancy ICF, Amsterdam-based SkyNRG said the core HEFA feedstocks were used in about 82% of all announced SAF capacity to 2030. But it warns of a “HEFA tipping point” in just five years as demand increases not only for SAF but also competing uses for these ingredients, threatening future production of the fuel. The report coincides with €300 million ($350m) of new investments in SkyNRG to help fund projects including three new SAF production plants in the Netherlands, Sweden and the US.

“The reliance on limited volumes of sustainable and scalable HEFA (Hydroprocessed Esters and Fatty Acids) feedstocks creates a stark risk that the SAF industry will struggle to continue growth after 2030 unless efforts are focused to ensure alternative pathways are developed and commercialised,” says the new report, SkyNRG’s fifth annual assessment of the sector and its first in collaboration with ICF.

“The considerable efforts over the past decade have built a solid foundation for the SAF industry, showing production is safe, scalable and sustainable. However, after 2030, demand is set to outpace the HEFA SAF production potential, urging the industry to shift towards a more diversified set of SAF policies and pathways.”

The report observes that in 2024, supplied global volumes of SAF doubled to 1 million tonnes, or 0.3 billion gallons, compared to 2023, and estimates a further doubling to around 2 million tonnes this year, largely driven by SAF blending mandates in the EU and UK.

These policies, which feature progressively escalating blending ratios, are expected to drive significant growth in demand, along with increased SAF deployment in Singapore, British Columbia, China and the US, together with voluntary commitments by airlines, around 60 of which have already announced that SAF will comprise 10% of their total jet fuel usage by the end of the decade.

Further growth will come from corporations offsetting their air travel and freight movement emissions by purchasing SAF through airline or SAF certificate programmes.

By 2030, says the report, global SAF production capacity will reach 18.1 million tonnes (6 billion gallons), which is around 1 million tonnes (0.3 billion gallons) higher than the previous annual outlook by SkyNRG.

The growth will be fanned by a combination of upscaled existing mandates, the introduction of similar policies in other markets and further voluntary commitments by airlines and corporates.

However, the report cautions that while 2030 targets could be met by currently projected capacity, “the supply-demand balance remains fragile.”

It flags slowing growth in announced SAF production capacity, and cites major delays and cancellations in the EU, UK and US “likely driven by exposure to market volatility caused by ongoing policy uncertainty in the US, regional oversupplies, lower fossil prices and broader macroeconomic headwinds.”

It adds: “Beyond 2030, SAF demand is expected to nearly triple to 40 million tonnes (13.2 billion gallons) by 2035, driven by accelerated mandates. With expected SAF capacity being 18 million tonnes in 2030, this creates a 26 million tonne gap to be addressed in just five years.”

While SAF production can be increased through measures such as co-processing renewable feedstocks at existing refineries or diversion of resources from renewable diesel to SAF, the report concludes that most of the additional supplies would need to come from extra production capacity.  

It highlights rapid development of the SAF sector across Asia, with the vast region’s collective SAF projects estimated to account for 46% of this year’s global total.

By 2040, SAF demand in Asia is projected by SkyNRG to achieve parity with North America, the leading region, where demand is expected to reach approximately 25 million tonnes, or 8.5 billion gallons.

But beyond 2040, SkyNRG expects Asian markets to collectively become the primary drivers of worldwide SAF demand, achieving an estimated 70 million tonnes (23 billion gallons) by 2050 on the back of huge air traffic growth.

However, average SAF blending rates in 2050 will be highest in Europe at 70%, with the UK next at 60%, North America 53%, Asia 42% and the rest of the world 29%.

“The challenge is massive but the reward can be even bigger,” said SkyNRG CEO and Co-Founder Maarten van Dijk, commenting on the report. “Robust policy frameworks and targeted support for offtakers, technology developers and infrastructure players are essential to keep SAF growth on track.”

ICF’s Aviation Lead, Dan Galpin, noted the EU and UK SAF mandates introduced this year, combined with ambitious new policies being developed worldwide, were collectively pushing the SAF market into a new phase. “Hundreds of projects have been announced, showing strong confidence,” he said. “Continued policy support remains key to realising long-term goals.”   

The latest SkyNRG SAF Market Outlook coincides with fresh investments in the company totalling up to €300 million ($350m) as a result of an investment round, including a commitment of up to €250 million ($290m) by APG, the largest pension fund manager in the Netherlands.  

The investment by APG, on behalf of its pension fund client ABP, together with an earlier investment of €175 million by Australia-based Macquarie Asset Management (MAM), will enable SkyNRG to progress plans including the development of new SAF production facilities in the Netherlands, Sweden and the US.

SkyNRG’s van Dijk welcomed the latest investment as “a major step forward for SkyNRG, both in terms of our growth plans and ambition to become a SAF producer. The investment from APG, along with MAM’s existing equity commitment, will not only support SkyNRG as a company but also demonstrates that the SAF market is ready for facilities dedicated solely to the production of SAF.”  

Arjan Reinders, APG’s Head of Infrastructure Europe, said his organisation’s investment in SkyNRG was its first in the SAF sector, and “closely aligned with our ambition to create impact by investing at the forefront in energy transition assets that meet our investment criteria. We look forward to collaborating with the SkyNRG management team as they expand their business operations and further contribute to the global efforts in reducing carbon emissions within the aviation sector.”

Image: SkyNRG and Skellefteå Kraft entered into a partnership in 2024, under the name Project SkyKraft, to develop a large-scale e-SAF facility in Sweden

Tony Harrington

Correspondent

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