Renewable Aviation Fuel Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Renewable Aviation Market is Segmented by Technology (Fischer-Tropsch (FT), Hydroprocessed Esters and Fatty Acids (HEFA), Synthesized Iso-Paraffinic (SIP), and Alcohol-to-Jet (AtJ)), Application (Commercial and Defense), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

Market Snapshot

Renewable Aviation Fuel Market Size
Study Period: 2019-2027
Base Year: 2021
Fastest Growing Market: North America
Largest Market: North America
CAGR: >50 %
Renewable Aviation Fuel Companies

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Market Overview

The renewable aviation fuel market is expected to register a CAGR of more than 50% during the forecast period (2022-2027), reaching a value of USD 16,764 million in 2027, from USD 359.67 million in 2020. The COVID-19 pandemic disrupted the market severely. The pandemic led to lockdowns to control the virus, which resulted in minimal aviation traffic, thereby declining the demand for aviation fuel. Factors such as government policies and efforts to limit emissions from the aviation industry and increasing growth in air traffic are driving the market. However, renewable aviation fuel is more expensive than conventional jet fuel, and this cost premium may restrain the market’s growth during the forecast period.

  • The hydroprocessed esters and fatty acids (HEFA) technology segment is expected to dominate the market during the forecast period, owing to the increasing government focus on promoting bio-jet fuels in the aviation sector.
  • The aviation industry is one of the highest emitters of greenhouse gases, primarily due to the combustion of conventional fossil fuels by aircraft engines. Countries globally have agreed to the Paris Accord and set targets to reduce emissions. This factor is expected to increase investments in the renewable aviation fuel market and present opportunities in the coming years.
  • North America is likely to dominate the renewable aviation fuel market during the forecast period, with a majority of the demand coming from countries like the United States and Canada.

Scope of the Report

The scope of the renewable aviation fuel market report includes:

Technology
Fischer-Tropsch (FT)
Hydroprocessed Esters and Fatty Acids (HEFA)
Synthesisized Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT)
Application
Commercial
Defense
Geography
North America
Asia-Pacific
Europe
South America
Middle-East and Africa

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Key Market Trends

Hydroprocessed Esters and Fatty Acids (HEFA) Technology to Dominate the Market

  • In 2011, hydroprocessed esters and fatty acids (HEFA) technology received certification from the American Society for Testing and Materials (ASTM) for bio-jet fuel production. HEFA uses oleo-chemical feedstock, such as oil and fats, for renewable fuel production.
  • A significant share of available commercial volumes of bio-jet fuels comes from HEFA biojet, with several commercial-scale facilities worldwide producing the same. However, renewable diesel (HEFA-diesel) is also produced during the process, with a larger market scope and a higher sales price. Thus, producers are focusing on HEFA-diesel instead of HEFA-jet.
  • In September 2021, Shell PLC announced the construction of an 820,000-ton-a-year hydroprocessed esters and fatty acids (HEFA) plant at the Shell Energy and Chemicals Park Rotterdam, Netherlands. Once built, the facility will likely be among the biggest in Europe to produce sustainable aviation fuel (SAF) and renewable diesel made from waste. Thus, such investments in the SAF projects may increase the demand for HEFA technology during the forecast period.
  • Furthermore, in September 2021, SG Peterson signed a 10-year agreement with Jet Blue that starts from 2023 to deliver approximately 670 million gallons of blended SAF prepared using HEFA technology to JetBlue to fuel its flight operations and help jet blue avoid about 1.5 million metric ton of CO2 emissions. Thus, such agreements are anticipated to boost the market during the forecast period.
  • However, HEFA biojet fuel costs more than fossil-derived jet fuels, and the potential feedstock for the HEFA is also costly.
  • To decarbonize the aviation sector, companies such as Boeing are testing the technical suitability of high freezing point HEFA (HEFA+) aviation fuel in aircraft. HEFA+ is a synthetic hydrocarbon made from bio feedstock, such as vegetable oil or waste fats.

· Therefore, owing to the above points, the HEFA segment is expected to dominate the renewable aviation fuel market during the forecast period.

Renewable Aviation Fuel Market Share

North America to Dominate the Market

  • North America is one of the largest markets for the aviation industry and renewable aviation fuel. In 2020, the air passenger transport in North America carried more than 397 million air passengers, which was approximately 22.2% of the world's traffic. Countries such as the United States and Canada accounted for the major share in air passenger count in 2020.
  • Between 1978 and 2020, the US airlines improved fuel efficiency by over 130%, which resulted in nearly 5 billion metric ton of CO2 savings. According to the Airlines for America (A4A), the country’s airlines operate approximately 28,000 flights worldwide daily in the pre-pandemic stage. Most airline companies in North America posted heavy financial losses in 2020 and 2021. However, airline traffic is expected to recover in 2022. Furthermore, as prices for crude oil are increasing rapidly, demand for renewable aviation fuel is expected to grow during the forecast period.
  • The Bio Energy Technologies Office (BETO) of the United States and the Department of Energy (DOE), supported by Energy Efficiency and Renewable Energy (EERE), are making efforts to expand the adoption of sustainable, domestically produced alternative fuels for transportation and aviation to stimulate the growth of the renewable fuel industry.
  • In North America, the primary policy incentive for renewable aviation fuel production is the US Renewable Fuel Standard (RFS), which provides credits to refiners and importers of fuel who blend renewable fuel into transportation fuel to meet Renewable Volume Obligation standards.
  • In January 2022, the Environmental Protection Agency (EPA) issued proposed volume requirements, under the RFS program, for cellulosic biofuel, advanced biofuel, and total renewable fuel. Under this proposal, the renewable fuel standard for 2022 was set at 36 billion gallons, an increment of over 3 billion gallons over the previous year.
  • The existing framework of fuel policies in North America is expected to support hydroprocessed esters and fatty acids (HEFA) fuel production in the future, thereby increasing the opportunities for HEFA fuel producers in the region.
  • Therefore, such factors are expected to boost the dominance of North America in the market during the forecast period.
Renewable Aviation Fuel Market Analysis

Competitive Landscape

The renewable aviation fuel market is moderately fragmented. The key players include TotaEnergies SE, Neste Oyj, Swedish Biofuels AB, Gevo Inc., and SG Preston Company.

Recent Developments

  • In February 2022, Engie SA and the US engineering company Infinium Holdings announced a EUR 500-million project to produce renewable aviation and maritime fuels in northern France. The final investment decision for the project is planned for the end of 2023, with commercial operations expected to start in 2026.
  • In February 2022, Boeing announced a supply agreement for two million gallons of blended renewable aviation fuel with EPIC Fuels to power its commercial operations in Washington state and South Carolina by the end of 2022.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Market Size and Demand Forecast in USD million, till 2027

    3. 4.3 Government Policies and Regulations

    4. 4.4 Recent Trends and Developments

    5. 4.5 Market Dynamics

      1. 4.5.1 Drivers

      2. 4.5.2 Restraints

    6. 4.6 Supply Chain Analysis

    7. 4.7 Porter's Five Forces Analysis

      1. 4.7.1 Bargaining Power of Suppliers

      2. 4.7.2 Bargaining Power of Consumers

      3. 4.7.3 Threat of New Entrants

      4. 4.7.4 Threat of Substitutes Products and Services

      5. 4.7.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Technology

      1. 5.1.1 Fischer-Tropsch (FT)

      2. 5.1.2 Hydroprocessed Esters and Fatty Acids (HEFA)

      3. 5.1.3 Synthesisized Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT)

    2. 5.2 Application

      1. 5.2.1 Commercial

      2. 5.2.2 Defense

    3. 5.3 Geography

      1. 5.3.1 North America

      2. 5.3.2 Asia-Pacific

      3. 5.3.3 Europe

      4. 5.3.4 South America

      5. 5.3.5 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 TotalEnergies SE

      2. 6.3.2 Neste Oyj

      3. 6.3.3 Swedish Biofuels AB

      4. 6.3.4 Red Rock Biofuels LLC

      5. 6.3.5 Gevo Inc.

      6. 6.3.6 Honeywell International Inc.

      7. 6.3.7 Fulcrum BioEnergy Inc.

      8. 6.3.8 SG Preston Company

      9. 6.3.9 LanzaTech Inc.

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Renewable Aviation Fuel Market market is studied from 2019 - 2027.

The Renewable Aviation Fuel Market is growing at a CAGR of >50% over the next 5 years.

The Renewable Aviation Fuel Market is valued at 359 Million USD in 2019.

The Renewable Aviation Fuel Market is valued at 16764 Million USD in 2027.

North America is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Swedish Biofuels AB, TotalEnergies SE, Neste Oyj, SG Preston Company, Gevo Inc. are the major companies operating in Renewable Aviation Fuel Market.

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