Global SAF Market's Current Oversupply Expected to Change

Market demand for sustainable aviation fuel rests with global mandates, according to a petroleum data company.

John Kingston

Friday, June 28, 2024 at 05:30 PM ET

Verified

Edited By: tccjeremy

United Airlines is leading a group of companies investing in sustainable aviation fuel. [Credit: Shutterstock]

Key Takeaways:

The global sustainable aviation fuel (SAF) market is currently oversupplied but is projected to experience a significant shortage after 2035 due to the commencement and widening of aggressive worldwide mandates, particularly the EU’s ReFuel EU program.
Meeting future demand requires a massive scale-up in SAF production, leveraging technologies like co-refining and alcohol-to-jet, but faces substantial challenges in securing sufficient, economically viable, and approved feedstocks.
Beyond mandates, market economics, government incentives (like tax breaks and credit generation in the US), and the volatility of these financial mechanisms are critical factors influencing investment and production decisions for SAF.

See a mistake? Contact us.

The global sustainable aviation fuel (SAF) market is now oversupplied relative to demand, but that is likely to change as various worldwide mandates commence or are widened.

That was one of the key findings from a recent webinar conducted by Argus Media, a leading source of news and pricing data for the petroleum market as well as other commodities. Argus is a global provider of information, so the webinar spanned key markets, from Asia to North America with Europe—which now has the strongest mandates for the use of SAF—in between.