The outlook for SAF supply presents both promising short-term growth and challenging long-term targets. In the short term, the SAF market is expected to witness exponential growth, driven by an initial build-out from a relatively small production base. Projections indicate that by the end of 2024, total SAF production could reach 1.5 million tonnes or higher (S&P Global, 2023). The European region is poised to play a significant role, potentially contributing over half of the projected global SAF output, while the Americas and Asia are expected to share 23%- 24% each. However, maintaining this production momentum may prove challenging. For instance, the projected production of 2.7 million tonnes by 2025 represents a relatively lower annual growth rate compared to the previous two years.

Looking further ahead, long-term projections suggest that 25%-30% of the total renewable fuel production should be dedicated to SAF by 2030 (IATA, 2023). Achieving this shift in renewable fuel supply towards SAF will heavily depend on policy support and incentives. Currently, leading biofuels such as ethanol primarily serve road transport due to favourable incentives. A better risk-reward balance, driven by supportive policies, could convince producers to pivot towards SAF production. The ICAO emphasizes that 2030 production levels are highly sensitive to the degree of policy support for SAF.

This chapter delves into the intricacies of the SAF supply outlook, exploring existing producers, the potential growth trajectories based on the current announced pipeline of projects, regional contributions, and the major players shaping the future of sustainable aviation development and fuel production.

The global landscape of SAF production is currently limited, with only a few major entities operating at commercial scale. Neste and World Energy are the two largest producers globally, highlighting the nascent stage of SAF production infrastructure. The industry has seen limited incentives, which has resulted in many existing biofuel producers and refiners focusing on biodiesel and other mixed by-products rather than SAF. With improved demand prospects, many of the operational capacities currently equipped with SAF capabilities are expected to become active.

Recent policy measures are beginning to change this dynamic. In the United States, the IRA and in Europe, the ReFuelEU initiative, have provided significant impetus for setting up new production facilities and expanding existing ones. Despite these efforts, the planned capacities will take time to come online, leading to short-term capacity constraints as SAF demand continues to rise. To address this demand more swiftly, some existing refineries may be retrofitted or repurposed.

The US, and particularly California, has been a leader in SAF supply contracts and the establishment of fuel distribution hubs, demonstrating the impact of state- level incentives. However, most of the existing biofuel US capacity has been directed toward transportation fuels due to the stronger incentives available in that sector, and the current lack of competitive incentives specifically for SAF.

The development pipeline for SAF production in the US is marked by significant growth potential, with many ongoing projects expected to come online from 2025 onwards. The time required for these new capacities to ramp up production levels will play a crucial role in meeting the country’s policy goals for reducing aviation emissions.

Currently, most of the existing SAF production and consumption in the US is concentrated in California, driven by favourable government incentives. This has created a robust project pipeline primarily based on agro-based biomass feedstock, with the HEFA production process dominating the upcoming capacities.

A study by the International Council on Clean Transportation (ICCT) on the US SAF pipeline indicates that while existing feedstock might be sufficient to meet the 2030 SAF production targets, it may fall short of achieving the 2050 Net Zero goal (ICCT, 2023). Reaching these long-term targets will likely require the development and scaling of alternative SAF production technologies to reduce reliance on biomass feedstock.

Alternative SAF production technologies to HEFA, such as AtJ and PtL, are currently in the minority among projects under development. However, there are notable developments in this area. In January 2024, LanzaJet inaugurated its ethanol-based SAF production facility in Georgia, which, once fully operational, will produce approximately 10 million gallons of SAF annually (LanzaJet, 2024). Additionally, the US-based startup Twelve is on track to commission the first PtL plant by the end of 2024, signalling a growing interest in diversifying SAF production technologies (Carbon Herald, 2024).

Several notable developments in Europe include: Cepsa and Apical constructing a biofuels plant in Huelva, Spain to produce 500,000 tons of SAF and renewable diesel. The plant is scheduled to begin production in 2026 with an investment of €1.2 billion. (Global Energy Infrastructure, 2024; Apical Group, 2024).

Velocys is setting up a plant with 20 million gallons per year of SAF capacity at Immingham in the UK in partnership with British Airways. The plant is expected to start production in 2028. The UK’s Department of Transport has provided a grant of £27 million ($34m). (Green Air, 2024; Velocys, 2024).

LanzaJet is establishing a 100 million litres per year SAF production facility in the UK with AtJ technology. The facility is expected to start production in 2026. The UK’s DOT has granted £25 million for the project. (Ethanol Producer, 2024; Turley, 2023).

Overall, the development pipeline for SAF production in both the US and Europe shows promising growth trajectories. While the US focuses heavily on leveraging its substantial biofuel production capacity, Europe is pioneering in the adoption of advanced PtL technologies. Both regions face unique challenges and opportunities, but their combined efforts will be instrumental in scaling up SAF production to meet global aviation decarbonization goals.

The rising demand for SAF presents a significant opportunity for conventional refiners to consider a shift towards SAF production through the reconfiguration of existing capacities. Large-scale refiners, in particular, are well-positioned to undertake plant conversions due to the efficiencies of scale they possess. In the US market, this trend is evident as smaller and less competitive refineries gradually close their doors whilst over the past few years has seen a significant uptick in the number of refineries converting to renewable fuels production across SAF, renewable diesel, and other bio-fuels (McKinsey, 2023).

Globally, ongoing refinery conversions underscore the impact of demand pressures on refiners’ decisions to embrace sustainable fuel production. Notable instances of refinery conversions worldwide highlight the diverse strategies adopted by companies to tap into the growing SAF market. Some of these conversions involve partnerships with technology providers, leveraging proprietary processes to enhance efficiency and competitiveness. For example, Repsol in Spain and Eni in Italy have deployed Honeywell’s Ecofin technology, while Swedish refiner Preem has adopted Topsoe AS technology.