Sustainable Aviation Fuel Market Set to Surge to USD 4.8 Billion by 2031

The Sustainable Aviation Fuel (SAF) market is poised for significant growth, with projections indicating it could reach a value of USD 4,841.5 million by 2031. According to a recent report by DataM Intelligence, the market was valued at USD 586.4 million in 2024, reflecting a robust compound annual growth rate (CAGR) of 35.2% during the forecast period from 2024 to 2031. This surge is largely driven by the aviation industry’s commitment to reducing carbon emissions and adhering to global sustainability targets.

Pressure to decarbonize is intensifying as aviation accounts for approximately 2–3% of global CO2 emissions. With increasing regulatory mandates and international climate goals, SAF emerges as a viable solution to mitigate aviation emissions without necessitating the replacement of existing aircraft or infrastructure.

Key Growth Drivers in the SAF Market

Several factors are propelling the growth of the SAF market. Major airlines are signing long-term offtake agreements to secure sustainable fuel supplies, aligning their operations with corporate environmental, social, and governance (ESG) commitments. Additionally, advancements in technology are enhancing the efficiency and scalability of various SAF production pathways, such as Hydroprocessed Esters and Fatty Acids (HEFA), Fischer–Tropsch (FT), and synthetic fuels.

Government incentives play a crucial role, with financial support and blending mandates in regions like the U.S., Europe, and Asia-Pacific facilitating investment in SAF production facilities. These incentives are crucial for enhancing energy security and diversifying supply chains, particularly as SAF can be produced from waste, biomass, carbon dioxide, and hydrogen.

Market Segmentation and Emerging Technologies

In 2024, biofuel-based SAF dominated the market, thanks to established pathways like HEFA and Alcohol-to-Jet technologies. These fuels are widely certified and utilized in scheduled flights. Emerging segments include hydrogen fuels, which are recognized as zero-emission solutions for future aviation needs. Despite requiring new infrastructure, investments in hydrogen technology are increasing, particularly in Japan, Europe, and the U.S.

Power-to-Liquid (PtL) fuels, which utilize captured carbon dioxide and green hydrogen, are gaining traction for their potential to decarbonize long-haul flights while significantly lowering lifecycle emissions. Although production costs remain high, the technology is attracting interest due to its environmental benefits. Gas-to-Liquid (GTL) fuels, which are compatible with existing aircraft, offer a transitional solution for cleaner combustion.

Demand for SAF varies by aircraft type, with fixed-wing aircraft, including commercial airlines and cargo carriers, commanding the largest share in 2024. The urgency for decarbonization is particularly pronounced among long-haul and high-fuel-consumption aircraft. Rotary-wing aircraft, such as helicopters and air ambulances, represent a smaller yet growing market segment, with increasing SAF adoption supported by low-emission objectives in military and search-and-rescue operations.

Regional Insights: United States and Japan Leading the Charge

The United States is at the forefront of SAF deployment and production, expected to maintain the largest market share through 2030. The government’s ambitious production targets and tax incentives have significantly improved the viability of SAF projects. Recent months have seen U.S. airlines expand multi-year agreements with fuel producers and announce new SAF production facilities across various states. Major aerospace manufacturers are also testing 100% SAF capabilities to facilitate broader industry adoption.

Japan is rapidly emerging as a key player in the Asian SAF market, with the government establishing clear targets for replacing traditional jet fuel with sustainable alternatives by 2030. Collaborations between Japanese aviation and energy companies with global SAF producers are fostering domestic production capabilities. Successful SAF-powered international flights have already been completed, and new procurement agreements are in place, reflecting Japan’s commitment to advancing hydrogen and synthetic fuels.

Competitive Landscape and Future Trends

The competitive landscape is shaped by key players such as Neste, which leads global SAF production supported by extensive refining capacity expansions. Neste has secured long-term agreements with major airlines and is investing in advanced feedstock technologies. Fulcrum BioEnergy focuses on converting municipal solid waste into SAF, while LanzaTech is pioneering gas fermentation techniques to expand decarbonization opportunities across multiple sectors.

Looking ahead to 2025, trends indicate that SAF production capacity is on the rise, with new commercial plants coming online. Airlines are incorporating SAF into their long-term sustainability strategies, and governments are mandating minimum SAF blending rates. Innovations in synthetic e-fuels, hydrogen-derived fuels, and advanced waste conversion technologies are entering commercial phases, underscoring the market’s transition from niche to essential.

As the Sustainable Aviation Fuel Market evolves from a valuation of USD 320.8 million in 2022 to an anticipated USD 3,581.0 million by 2030, its success hinges on technology diversification, feedstock security, global collaboration, infrastructure investment, and supportive policies. This growth reflects the aviation industry’s urgent need to shift toward cleaner energy solutions and long-term climate alignment. The future of aviation energy will be shaped by innovation, partnerships, and infrastructure development led by industry leaders.