Meeting Manufacturing Demand for Sustainable Aviation Fuel
Derived from non-petroleum sources, sustainable aviation fuel (SAF) holds immense promise in cutting aviation’s environmental footprint.
However, widespread adoption faces many economic, political and technological hurdles.
According to a report by the World Economic Forum (WEF) and Kearney, global SAF demand is projected to hit 17 million tons annually by 2030.
Meeting this demand will require between US$19 billion and US$45 billion in investment, depending on the chosen technology mix.
Rising demand for SAF
If global demand for SAF is to reach 17 million tons per year (Mt/a) by 2030, it will account for 4% to 5% of total jet fuel use.
This growth is driven by ambitious industry targets and regulatory pressure. So far, 43 airlines have committed to using around 16.25 billion litres (13Mt) of SAF in 2030, with new agreements regularly emerging.
As part of its Airports of Tomorrow initiative, WEF and Kearney’s Financing Sustainable Aviation Fuels research estimates that meeting this demand could require up to US$45bn in capital investment by the end of the decade.
“If we are serious about hitting SAF targets by 2030, it is essential that SAF producers, governments and investors are working collaboratively to de-risk production and scale employment," says Claudia Galea, Global Sustainability Director at Kearney.
“There are a number of financing roadblocks for SAF to scale-up effectively, so addressing these barriers requires a multifaceted approach with technological innovation, policy frameworks and innovative financial structures to increase investment appeal for SAF projects across their lifecycle.”
Closing the SAF production gap
Despite rising demand, SAF production capacity remains well below what is needed to meet future targets.
By the end of last year, global SAF production capacity stood at 4.4Mt/a, with an additional 6.9Mt/a expected by 2030 based on confirmed refinery expansions and new facilities. However, a further 5.8Mt of capacity still requires financial investment commitments by 2026 to bridge the gap.
Beyond funding, several obstacles hinder SAF production, including:
- High production costs: SAF remains two to five times more expensive than conventional jet fuel.
- Technological challenges: Many SAF production methods are still in early commercial stages.
- Feedstock limitations: Sourcing sustainable feedstocks in large enough volumes remains difficult.
- Market uncertainty: Inconsistent policies and unclear demand deter investors.
To address these issues, WEF and Kearney’s Financing Sustainable Aviation Fuels report outlines 10 key conditions to unlock greater investment in SAF.
The report not only highlights possible solutions but also urges SAF producers, governments, and investors to collaborate in combining these de-risking measures for maximum impact.
- Research and innovation grants for early-stage, high-risk SAF technologies to reduce upfront costs
- Multilateral development bank support, particularly in developing regions with complex regulatory landscapes
- Guarantees and insurance, such as loan guarantees, first-loss capital, and insurance solutions
- Strategic investments, such as collaboration with airlines, airports, OEMs and energy players to provide demand assurance and foster a supportive ecosystem
- Long-term offtake agreements to provide stable revenue and reduce demand uncertainty
- Book-and-claim mechanisms allow corporate travellers to take an active role in funding SAF
- Green bonds tied to SAF production offers a powerful tool for raising impact-driven capital
- Private equity capital and operational expertise, can accelerate commercialisation and scale SAF projects
- Infrastructure investors with lower capital costs and a long-term investment horizon
- Tolling models can mitigate market risks by charging a fixed fee for refinery capacity while customers supply feedstock and retain ownership
“Banks will often view SAF projects as high risk due to their novelty, extended timelines and reliance on emerging technologies, so project developers must bear this in mind when attempting to attract capital," adds Giorgio Parolini, Aviation Decarbonisation Lead at WEF.
“For SAF to reach scalable production, a shift in financing mechanisms will be necessary, leveraging both private and public capital to mitigate perceived risks and catalyse substantial cash flow into the sector.”
SAF: What next?
SAF challenges are significant, but the potential benefits are huge.
Beyond reducing the aviation industry's carbon footprint, scaling up SAF production could create new jobs, enhance energy security and drive innovation in the broader renewable energy sector.
SAF could be the tonic aviation needs as the need to address climate change becomes increasingly urgent — with other hard-to-abate sectors hopefully following the model toward sustainability.
Anticipating an upward trajectory, Boston Consulting Group (BCG) expects global demand for SAF to grow significantly in the coming decades, predicting that it will eventually make up 12% of the global aviation energy demand by mid-century.
BCG says: “European mandates kicking-off in 2025 are expected to spark a period of long-term demand growth for sustainable aviation fuels. However, key uncertainties — like US policy framework, voluntary willingness to pay and Asian mandates — cloud the trajectory.
“At the same time, rapid SAF capacity expansion has led to an overcapacity slump in 2024, suppressing prices and margins. We anticipate that demand will surpass capacity toward the end of the decade, restoring margins to reinvestment levels.”
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