Major Investment Sparks Hope for Cheaper Sustainable Aviation Fuel Supply
Key Points
- 1New investment aims to bridge the cost gap between SAF and conventional jet fuel by driving economies of scale in production.
- 2Current SAF production is less than 0.5% of global jet fuel, requiring an estimated 5.8 million tonnes of additional capacity to meet 2030 targets.
- 3Funding targets new, scalable production pathways like Power-to-Liquid (PtL) and Alcohol-to-Jet (ATJ) to diversify feedstock beyond used cooking oil.
- 4Industry groups stress that stable policy, rather than mandates alone, is essential to secure the massive capital investment needed for global SAF scale-up.
A new round of substantial investment has been announced. This funding targets the Sustainable Aviation Fuel (SAF) production sector. The goal is to rapidly increase the global supply of this alternative fuel for airlines. This move is critical for reducing fuel cost and helping the aviation industry meet its ambitious environmental targets.
The Current SAF Challenge
SAF is the primary tool for the decarbonization of aviation. It can reduce lifecycle greenhouse gas emissions by up to 80%. However, widespread adoption faces two major hurdles: limited supply and high cost. SAF is currently three to five times more expensive than conventional jet fuel. This price difference strains airline operating margins, especially for low-cost carriers.
Global SAF production is still a tiny fraction of the total fuel needed. In 2024, production reached about 1.25 billion liters, or 0.3% of global jet fuel use. The International Air Transport Association (IATA) expects this to reach 0.6% in 2025. This is far short of the goal set by the International Civil Aviation Organization (ICAO). ICAO aims for a 5% reduction in carbon intensity by 2030 through SAF use.
Investment Focus: Scaling Production
The new fuel investment announcement is designed to close this supply gap quickly. Industry experts estimate that the market requires an additional 5.8 million tonnes of capacity. Securing Final Investment Decisions (FID) for this capacity is needed in 2026 and 2027. This is essential to meet the mandated demand by 2030.
Recent policy moves have spurred public and private funding. For example, the European Commission's Sustainable Transport Investment Plan aims to mobilize at least EUR 2.9 billion. This funding is intended to remove key investment barriers. Similarly, the UK's Advanced Fuel Fund awarded £63 million across 17 projects in 2025.
Advancing Technology Pathways
The bulk of current SAF comes from used cooking oil, known as the HEFA pathway. However, this feedstock is limited and cannot support the required scale. Investment is now targeting advanced technologies for increasing SAF supply. This includes Power-to-Liquid (PtL), or e-fuels, which use renewable electricity and captured CO2. Manufacturers like Airbus are also investing in pathways like Alcohol-to-Jet (ATJ) to accelerate development.
Impact on Airlines and Global Emissions
For airlines, this investment signals a path toward sustainable operations. The new funding helps drive economies of scale in SAF production. This is the most direct way to achieve the goal of reducing fuel cost over time. Lower SAF prices will make it easier for carriers to comply with SAF blending mandates. For instance, the EU's ReFuelEU Aviation requires a minimum 2% blend starting in 2025.
However, IATA has cautioned against mandates that lack strong incentives. They argue that poorly designed policies can simply increase the price premium for airlines. Regulators like the European Union Aviation Safety Agency (EASA) must ensure safety and standardization.
Ultimately, the success of this investment is key to the aviation industry sustainability goal. SAF is expected to provide roughly 65% of the emissions reduction needed by 2050. Scaling up production is vital to achieving net-zero carbon emissions by the industry's 2050 deadline.
- Key Takeaways:
- New investment aims to bridge the cost gap between SAF and conventional jet fuel.
- Current SAF production is less than 0.5% of global jet fuel, far from the 2030 targets.
- Funding targets new production pathways like Power-to-Liquid (PtL) for long-term scalability.
- Stable government policy and incentives are crucial to support the required $19-45 billion investment by 2030.
Visit flying.flights for the latest commercial aviation news and airline industry updates.
Topics
Written by
Ujjwal SukhwaniAviation News Editor & Industry Analyst delivering clear coverage for a worldwide audience.
View ProfileYou Might Also Like
Discover more aviation news based on similar topics
EASA Greenlights New Sustainable Aviation Fuel Standard: What Does It Mean for European Airlines?
EASA approved a new Sustainable Aviation Fuel (SAF) standard, accelerating SAF adoption and impacting European airlines' operations and decarbonization efforts.
Is Record Sustainable Aviation Fuel Production Enough to Meet Net-Zero Goals?
Global production of Sustainable Aviation Fuel (SAF) has hit record levels, but industry experts warn massive investment is still needed to meet future net-zero targets.
Why Must Governments Boost Sustainable Aviation Fuel for Net-Zero 2050?
IATA is urging governments to create incentives for sustainable aviation fuel (SAF) production to help the industry reach net-zero carbon emissions by 2050.
Is Aviation's Green Fuel Future at Risk as IATA Warns of SAF Slowdown?
IATA warns that Sustainable Aviation Fuel (SAF) growth is losing momentum, despite doubling to 1.9 Mt in 2025, due to poorly designed mandates and high costs.
What Major New Deal Will Boost United Airlines' Sustainable Aviation Fuel Use?
United Airlines has secured a new SAF supply agreement with Neste to expand its use of Sustainable Aviation Fuel at three major US hubs, advancing its net-zero emissions goal.
Will Airlines Meet EASA's New Sustainable Aviation Fuel Mandate by 2027?
The European Union Aviation Safety Agency (EASA) is monitoring the ReFuelEU mandate, which requires a minimum percentage of Sustainable Aviation Fuel (SAF) on all flights from EU airports, starting in 2025.