Renewable Aviation Fuel Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Renewable Aviation Fuel Market Trends and Insights

Increased Government Regulations for GHG Emissions

Binding mandates are replacing voluntary frameworks as the principal demand catalyst. The EU’s ReFuelEU Aviation regulation compels a 2% SAF blend in 2025, 6% by 2030, and 70% by 2050, with penalties of EUR 95 per tonne of CO₂-equivalent for non-compliance.^{[1]European Commission, “Questions and Answers: ReFuelEU Aviation Initiative,” europa.eu} The same law carves out a synthetic fuel sub-target of 1.2% by 2030 and 35% by 2050, steering investment toward power-to-liquid pathways. CORSIA’s first compliance phase began in 2024, and because each liter of SAF yields 3.5 times more eligible credits than carbon offsets, airlines favor direct blending.^{[2]International Civil Aviation Organization, “CORSIA,” icao.int} Japan’s 10% mandate for 2030 and India’s phased 1-2% mandates deepen regulatory momentum in Asia, underscoring that statutory blend floors, not feedstock availability, dictate regional uptake.

Airline Net-Zero Emission Commitments

Carrier-level pledges translate into sizable, long-term contracts that de-risk capital. United Airlines agreed to purchase 1.5 billion gallons of SAF over 20 years, including 900 million gallons from Neste. Air France-KLM inked a 10-year deal for 800,000 tonnes with TotalEnergies, anchoring revenue for the Grandpuits biorefinery. Emirates earmarked USD 200 million annually for SAF procurement, signaling willingness to import from Europe and Asia. These offtakes lock in volume at USD 1.50-2.50 per gallon premiums over spot Jet A-1, satisfying project-finance lenders’ revenue-certainty tests.

Corporate Travel Decarbonization Pressure

Large enterprises are embedding SAF clauses in travel contracts, creating a parallel demand stream. Microsoft, Google, and Meta pledged to buy 150 million gallons of SAF credits through the Sustainable Aviation Buyers Alliance, shifting cost burdens from airlines to end users. Business-aviation operators NetJets and Flexjet introduced SAF-inclusive memberships in 2025 that cost 15-20% more yet achieved 30% uptake among Fortune 500 clients. The EU Corporate Sustainability Reporting Directive compels Scope 3 disclosure, nudging corporations to favor verifiable SAF over offsets.^{[3]European Commission, “Questions and Answers: ReFuelEU Aviation Initiative,” europa.eu}

Electro-Fuels (PtL) Technology Breakthroughs

Capital costs are falling as electrolysis and reactor designs mature. Germany’s DLR produced jet fuel at EUR 3.50 per liter using power at EUR 0.05 per kWh in 2024, a 40% cost drop from 2022 pilots. OXCCU raised GBP 70 million in 2025 to commercialize direct CO₂-to-jet conversion, targeting sub-USD 3.00 per gallon by 2028. Topsoe and Sasol’s joint venture aims for 100,000 tonnes of e-SAF annually by 2030 via solid-oxide electrolyzers. Masdar committed USD 1 billion to a 200,000 tonne plant in Abu Dhabi, leveraging abundant solar power and direct air capture.

High Production Cost vs. Conventional Jet Fuel

SAF prices remained 2-5 times higher than Jet A-1 in 2025. HEFA costs USD 3-6 per gallon to produce versus USD 2-3 for petroleum jet, while e-fuels often exceeded USD 8 per gallon before subsidies. The U.S. Section 45Z credit of USD 1.75 per gallon narrows the gap but expires in 2027, clouding long-term economics. Capital intensity amplifies risk; PtL plants require about USD 1 billion for 100,000 tonnes of annual capacity.

Feedstock Supply Competition & Constraints

Global UCO supply totaled 10 billion liters in 2024 against 15 billion liter demand, lifting prices to USD 1,200 per tonne in 2025. Europe imported more than 60% of its UCO from China, exposing producers to fraud investigations that revealed up to 20% mis-certification. Animal fat markets tightened as renewable diesel projects absorbed supply, raising tallow prices 35% between 2024-2025.

Segment Analysis

By Feedstock: Waste Oils Dominate, Synthetic Pathways Accelerate

Used cooking oil and waste fats accounted for 40.4% of the renewable aviation fuel market share in 2025, reflecting HEFA maturity and entrenched collection networks. Industrial CO₂ paired with green hydrogen is forecast to grow at a 59.5% CAGR through 2031, the fastest among all feedstocks, as ReFuelEU’s synthetic sub-mandate underwrites offtake.^{[4]DLR German Aerospace Center, “Power-to-Liquid,” dlr.de} Animal fats remain volume-constrained, while lignocellulosic biomass trails due to capital-intensive gasification-FT processes that only Fulcrum BioEnergy has scaled commercially.

Demand for lipid feedstocks is tightening rapidly. Global UCO imports surged, prompting the European Commission to audit certification chains and consider stricter traceability standards. Vegetable oils face sustainability scrutiny; the EU excluded palm oil-derived HEFA in 2024, redirecting procurement toward lower-yield soybean and rapeseed oils. As lipid ceilings loom, synthetic e-SAF emerges as the only route capable of delivering the 35% blend requirement embedded in EU law by 2050.

Note: Segment shares of all individual segments available upon report purchase

By Technology: HEFA Incumbency Faces PtL Disruption

HEFA dominated with 69.9% of the renewable aviation fuel market size in 2025, driven by Neste’s 1.9 million tonne Singapore facility and TotalEnergies’ Grandpuits conversion.^{[5]Neste Corporation, “Singapore Expansion,” neste.com} Yet lipid reliance caps future output at roughly 10 million tonnes annually. PtL/e-SAF is projected to surge at 55.8% CAGR, aided by falling electrolyzer costs and growing availability of ultralow-cost solar in the Middle East. ATJ and FT-SPK play transitional roles: LanzaJet’s Freedom Pines plant reached 10 million gallons in 2025, while Velocys finally obtained ASTM approval for its municipal solid-waste route, unlocking Bayou Fuels construction.

HEFA’s brownfield advantage remains strong in the near term; co-processing at petroleum refineries slashes capex by up to 50% relative to greenfield builds. Nevertheless, investors are gravitating toward PtL projects with 15-year offtake agreements as policy certainty improves. Technology licensing has become a strategic choke-point: Honeywell UOP’s Ecofining process underpins more than 70% of global HEFA capacity and generated USD 200 million in license fees in 2024.

By Blending Level: Mid-Range Blends Dominate, Neat SAF Gains Momentum

The 10-50% blend category captured 77.5% of market demand in 2025 because it requires no aircraft or engine modifications. Airlines are now shifting upward as mandates tighten; the 50-100% segment is expected to grow at 52.6% CAGR during 2026-2031. Airbus and Boeing have certified all new deliveries for 100% SAF since 2025. Emirates and Virgin Atlantic completed demonstration flights using neat SAF, proving operational feasibility.

Airlines favor higher blends because a 10% mix yields only an 8% lifecycle CO₂ cut, far short of net-zero pathways. Regulatory floors are climbing: ReFuelEU effectively requires blends greater than 10% by 2030, while Singapore’s levy finances supply-side subsidies aimed at 3-5% blends by 2030. As engine approvals broaden, airlines will transition toward 50-100% operations, provided cost incentives persist.

Note: Segment shares of all individual segments available upon report purchase

By Application: Commercial Aviation Dominates, Defense Emerges

Commercial airlines represented 80.1% of the renewable aviation fuel market size in 2025 and are projected to expand at a 39.2% CAGR. United Airlines, Air France-KLM, Southwest, and Ryanair have layered offtake commitments totaling more than 3 billion gallons, locking in demand visibility. Defense adoption is rising; the U.S. Air Force allocated USD 500 million in 2024-2025 SAF contracts targeting a 50% share of fuel by 2030. Business aviation plays a high-margin role, with NetJets’ SAF tier achieving 30% penetration among large corporate accounts. Cargo carriers such as FedEx plan 30% blends by 2030 to satisfy shipper decarbonization requirements.

Governments increasingly view SAF procurement as an energy-security strategy. Military incorporation of e-SAF in logistics reduces exposure to petroleum supply shocks, while corporate flight departments demand book-and-claim certificates to meet Scope 3 goals. These dynamics diversify the customer base and spread price premiums across multiple payer categories.

Geography Analysis

Europe is expected to record a 43.0% CAGR through 2031, surpassing North America despite North America’s 42.6% renewable aviation fuel market share in 2025. The EU blended 193,000 tonnes of SAF in 2024, just 0.6% of jet fuel consumption, yet announced projects would lift capacity to 3.2 million tonnes by 2030, mainly in the Netherlands, France, and Germany. Airport infrastructure programs in Amsterdam, Paris, and Frankfurt reduce logistics costs and anchor supply.

North America benefits from established HEFA capacity at World Energy’s Paramount refinery and generous production credits under the Inflation Reduction Act. Section 45Z offers up to USD 1.75 per gallon but faces renewal risk after 2027, causing some developers to delay investment decisions. Canada introduced a USD 1.1 billion subsidy scheme targeting 10% domestic production by 2030, but feedstock competition from renewable diesel limits immediate growth.

Asia-Pacific is awakening. Singapore’s 1% mandate launches in 2026, Japan targets 10% by 2030, and India phases in 1-2% requirements by 2028. China aims for 50,000 tonnes of output by 2025, but fell short at 30,000 tonnes due to feedstock scarcity. Australia committed USD 720 million to SAF funding in 2025, targeting 10% blend by 2030. The Middle East positions itself as a PtL hub; Masdar’s 200,000 tonne Abu Dhabi facility will leverage low-cost solar, and the UAE’s Emirates has signed a 15-year offtake agreement