Singapore – With COP29 drawing to a close, aviation market intelligence leader IBA has revealed a widening gap between Sustainable Aviation Fuel (SAF) supply and demand as defined by government mandates versus airlines’ ambitious decarbonization plans.
IBA projects a significant increase in SAF production, from one million metric tonnes (MT) in 2024 to 26.8 million MT annually by 2030. However, the anticipated combined total of mandated and target SAF demand is forecasted to reach only 19.1 million MT by 2030, leaving a substantial surplus.
Asia-Pacific Leads Production Growth
The Asia-Pacific region currently dominates SAF production with a capacity of 1.5 million MT/year, driven largely by Neste’s facility in Singapore. By contrast, Europe’s SAF production capacity is expected to grow from 0.42 million MT in 2024 to 2.2 million MT by 2025.
Jennifer Stanley, ESG Manager at IBA, emphasized the role of airline-led initiatives: “Airline-led initiatives that exceed mandated minimums demonstrate a proactive, yet flexible approach to decarbonisation. This suggests that market-based measures will be essential for scaling SAF production and stimulating technology investments.”
“Market-based measures will be essential for scaling SAF production and stimulating technology investments.” – Jennifer Stanley, ESG Manager, IBA
Mandated vs. Target SAF Demand
Mandated SAF demand—driven by government regulations—will grow modestly, from 0.5 million MT in 2024 to 4.1 million MT by 2030. However, airlines’ decarbonization goals often set SAF usage targets of around 10% of total jet fuel consumption. This airline-driven demand is forecast to accelerate more quickly, contributing to the projected total demand of 19.1 million MT by 2030.
Implications for the Market
The anticipated surplus in SAF production highlights the need for market-based incentives and partnerships to bridge the gap between supply and demand. While airlines’ proactive efforts reflect their long-term commitment to decarbonization, the aviation sector must align policies, production, and investments to ensure sustained growth in SAF adoption.
