July 24, 2024
Sustainable Aviation Fuel Market

Sustainable Aviation Fuel Market is estimated to Witness High Growth Owing To Increase in Air Travel

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 is a type of biofuel used to power aircrafts. It is produced from renewable feedstocks such as used cooking oil, plant oils and animal fats. Sustainable aviation fuel offers environmental benefits such as lower lifecycle carbon emissions compared to conventional jet fuel. With rising air passenger traffic and increasing environmental concerns, there is a growing need for sustainable and cleaner aviation fuels.

Market key trends:

One of the major trends driving the growth of sustainable aviation fuel market is the increase in air travel. The number of air passengers has grown exponentially over the past few decades and this growth is expected to continue in the coming years. According to the International Air Transport Association (IATA), the number of air passengers is projected to double to 8.2 billion by 2037. This significant growth in air travel is anticipated to boost the demand for cleaner aviation fuels like sustainable aviation fuel to reduce carbon emissions from aircrafts. Moreover, government policies and initiatives by aviation industry players to lower emissions are encouraging the production and use of sustainable aviation fuel, thereby positively impacting the market growth.

Porter’s Analysis:

  • Threat of new entrants: Low capital requirements but high regulations and established customers relationship make the entry of new players difficult in this market.
  • Bargaining power of buyers: Large international airlines have significant bargaining power as they seek for sustainable aviation fuels at lower costs.
  • Bargaining power of suppliers: A few suppliers are producing sustainable aviation fuels therefore suppliers enjoy bargaining power in this fragmented competitive landscape.
  • Threat of new substitutes: Alternate renewable fuels and technological advancements can pose threat of substitution for sustainable aviation fuels.
  • Competitive rivalry: Intense competitive rivalry exists between the existing players to gain higher market share in this emerging market.

SWOT Analysis:

  • Strength: Sustainable aviation fuels help airlines reduce their carbon emissions and dependency on conventional jet fuels. They support the aviation industry’s emission reduction goals.
  • Weakness: High production costs of sustainable aviation fuels compared to conventional jet fuels. Limited supply and production capabilities globally.
  • Opportunity: Growing global concern over climate change is driving the demand for low carbon emission fuels in aviation. Government incentives and policies are encouraging sustainability.
  • Threats: Uncertainty over long term commercial availability due to dependence on feedstock availability and technologies. Economic stability can influence production levels.

Key Takeaways:

The Global Sustainable Aviation Fuel Market Growth is expected to witness high, exhibiting CAGR of 61% over the forecast period, due to increasing global adoption of low carbon emission fuels in aviation sector. North America region currently dominates the market and is expected to maintain its lead over the forecast period due to presence of major aircraft fleet and production facilities in the US.

Regional analysis Sustainable aviation fuels are emerging as one of the viable solutions to reduce carbon emissions from aviation industry. North America region currently accounts for largest share in the global sustainable aviation fuel market. The US government has set a goal to produce at least 3 billion gallons of sustainable aviation fuels annually by 2030 which is propelling the market growth in the region. Stringent emission norms and availability of feedstock makes America an attractive production hub for sustainable jet fuels.

Key players operating in the sustainable aviation fuel market are Neste, AEMETIS INC., Gevo, Shell PLC, Lanza Jet, and Sky NRG. Neste is one of the major producers with an annual production capacity of 1.5 million gallons of sustainable aviation fuel. Shell and Lanza Jet are involved in developing technological processes for large-scale production while Sky NRG is focusing on developing sustainable fuel supply chains.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it