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PAF Insights

Energy Transition

2025

Global Sustainable Aviation Fuel Report

01 | Executive Summary

The global aviation industry is at a crossroads, needing to balance increasing travel demand with the imperative to reduce carbon emissions. Sustainable Aviation Fuels (SAFs) are central to achieving the industry’s net-zero emissions target by 2050. This report analyzes SAF initiatives and regulatory frameworks in Canada, the European Union, and the United States, highlighting each region’s strategies to promote SAF adoption and production.

Canada’s regulatory framework for SAF is driven by the Clean Fuel Regulations (CFR) and various provincial initiatives. British Columbia leads with its Low Carbon Fuels Act (LCFA), setting SAF blending mandates and significant carbon intensity reduction targets. These provincial efforts illustrate the critical role of local leadership in advancing SAF adoption nationally.

The EU’s ReFuelEU Aviation initiative, part of the “Fit for 55” package, sets phased SAF blending mandates from 2025 to 2050. The EU Emissions Trading Scheme (ETS) further incentivizes SAF by allowing airlines to offset SAF costs against their ETS obligations. This comprehensive approach combines regulatory mandates with financial incentives, establishing the EU as a global leader in SAF regulation.

Post-Brexit, the UK has developed its own SAF regulatory framework, including specific mandates under the Renewable Transport Fuel Obligation (RTFO). This independent approach has driven substantial investment in SAF, demonstrating the UK’s commitment to sustainable aviation.

The U.S. approach includes the Inflation Reduction Act (IRA), which offers graded tax credits for SAF production, and the FAA’s Fueling Aviation’s Sustainable Transition (FAST) program, which supports SAF infrastructure. State-level policies in California, Illinois, and Oregon further bolster SAF adoption, highlighting the importance of sub-national efforts.

Despite strong regulatory frameworks, challenges remain, including high production costs, technological barriers, and significant infrastructure investments. However, advancements in production technologies and economies of scale, supported by clear policies and financial incentives, present substantial opportunities for reducing aviation’s carbon footprint.

Achieving net-zero aviation emissions by 2050 requires a coordinated approach involving governments, the private sector, and international collaboration. Governments must provide long-term policy support and financial incentives, while the private sector must invest in scaling SAF production technologies. Harmonizing global standards and practices is crucial for a seamless transition to sustainable aviation.

Canada’s regional initiatives, the EU’s comprehensive ReFuelEU framework, and the multifaceted U.S. approach demonstrate effective strategies for advancing SAF. The U.S. combines federal tax credits, targeted funding, and state-level initiatives to support SAF production and adoption. The EU integrates binding mandates with financial mechanisms like the ETS, providing a model for holistic policy design. Canada’s provincial leadership, particularly in British Columbia, showcases how local initiatives can drive national progress.

To overcome existing challenges, sustained innovation and investment are essential. Governments need to refine and expand policy frameworks, while the private sector must proactively develop and scale new SAF technologies. International collaboration, through platforms like the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), will be critical for harmonizing standards and fostering a global SAF market.

In summary, the path to sustainable aviation is clear but requires concerted effort from all stakeholders. The insights and strategies outlined in this report provide a foundation for continued progress, underscoring SAF’s critical role in achieving a net-zero aviation industry by 2050. With sustained commitment and collaboration, the aviation industry can meet this challenge and secure a greener future.

About

PAF’s INSIGHTS series of industry reports aims to provide a comprehensive understanding of the key characteristics and trends prevalent in major markets for various technologies that will shape the energy transition over the coming decades. We hope you find our annual review of the Global SAF market informative and enjoyable to read, and we look forward to briefing you on other energy transition technologies in the upcoming months.

Editorial Team

Support Team

  • Souradeep Basu
    Manager
    Alchemy Research and Analytics
  • Subhajit Pal
    Associate Manager
    Alchemy Research and Analytics
  • Rajashree Mondal
    Senior Analyst
    Alchemy Research and Analytics

Illustration and Design

  • Maurya Mukherjee
    Associate Manager
    Alchemy Research and Analytics
  • Srijani Goswami
    Senior Executive- Design & Visualization
    Alchemy Research and Analytics
  • Alex Krawtschenko
    CEO
    Semper Fi Digital

Global Sustainable Aviation Fuel Report

Our Global Sustainable Aviation Fuels (SAFs) Market Report adds to our continued series of key energy transition-focused industry reports. The collective works are the result of a valued research collaboration between ourselves and Alchemy Research and Analytics, a leading industry research group working actively across energy transition markets. The report draws on macroeconomic data from multilateral institutions and industry-specific data from sources such as industry associations, government authorities/statistical departments, and the International Energy Agency (IEA). This was supplemented by news reports, trade journals, and related sources.

The report provides a current market overview of the global SAF industry, including first-movers, key challenges, policy drivers, economics, and outlook in major countries across Europe and the Americas. The structure of the report begins with an introduction to the principles behind the technology and industry. It then delves into detailed chapters on major topics, offering a holistic view of possible industry directions and highlighting growth opportunities, demand drivers, and investment considerations.