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

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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 this is projected to shift to a significant shortage after 2035 due to the introduction and expansion of legislative mandates worldwide.
Mandates, particularly Europe's ReFuel EU program which sets escalating blend requirements from 2% in 2025 to 70% by 2050, are the primary drivers of future SAF demand, while the U.S. relies more on financial incentives.
Meeting the anticipated future demand for SAF faces challenges from limited availability and high costs of current feedstocks, necessitating a shift towards developing technologies for less conventional sources like municipal waste and agricultural residues, alongside methods like co-refining and alcohol-to-jet production.

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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.