by The sustainable aviation fuel market is poised to help reduce the carbon footprint of the aviation industry. Products in this space include biofuel and synthetic fuel that can be mixed with or replace jet fuel in aircrafts. They provide a lower carbon alternative to conventional jet fuel and help lower greenhouse gas emissions. Demand for sustainable aviation fuel is being driven by efforts from governments and aviation companies aiming to achieve carbon neutral growth targets.
The global sustainable aviation fuel market is estimated to be valued at US$ 2.37 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the sustainable aviation fuel market include Eisai Co., Ltd., Novartis AG, AbbVie Inc. (Allergan Plc.), Adamas Pharmaceuticals, Inc., H. Lundbeck A/S, Biogen, AC Immune, F. Hoffmann La Roche Ltd., Daiichi Sankyo Company, Limited, and Johnson & Johnson Services, Inc. These companies are investing in ramping up production capacity and developing advanced biofuel technologies.
The Sustainable Aviation Fuel Market Demand is growing steadily driven by the aviation industry’s commitment to curb its emissions and dependency on fossil fuels. Major airlines and airport operators have established goals of using sustainable aviation fuel for a certain percentage of their total fuel needs in the future. Support from government policies in the form of tax incentives and mandates are also boosting the adoption of these lower carbon fuels.
The sustainable aviation fuel market is witnessing significant expansion on a global scale. Production facilities are coming up across regions like North America, Europe and Asia Pacific near major airports to ensure supply. Partnerships between producers and airlines along international routes will aid global distribution of sustainable aviation fuel in the coming years.
Market Key Trends
One of the key trends driving investment and innovation in the sustainable aviation fuel market is the development of cost competitive technologies. While production of these green fuels currently have higher costs than conventional jet fuel, research is ongoing in using renewable feedstocks and waste oils/fats more efficiently in fuel production processes. This can help reduce the cost per gallon and make sustainable aviation fuels a more viable and attractive alternative for the long term.
Porter’s Analysis
Threat of new entrants: New players find it difficult to enter this market due to high capital requirement for aviation fuel production facilities and stringent regulations.
Bargaining power of buyers: Large airline companies have significant bargaining power over sustainable aviation fuel producers due to their bulk purchase volumes.
Bargaining power of suppliers: A few sustainable fuel technologies and feedstock suppliers operate in this market, enabling them to influence prices.
Threat of new substitutes: No direct substitutes exist for aviation fuel, lowering risk from new alternative fuels for airplanes.
Competitive rivalry: Major producers compete intensely on production costs and technology to increase market share in this growing market segment.
Geographically, North America dominates the sustainable aviation fuel market currently, representing over half the volume, supported by comprehensive government policies. Europe is another major region due to strong aviation sector and Climate Change initiatives by European Commission.
The Asia Pacific region is poised to witness fastest growth during the forecast period, driven by increasing focus on alternative fuels in countries such as China, India and Japan to diversify their energy mix. Sustainable aviation fuel projects are expanding to cater to long-term growth in air travel within the region.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
