Sustainable aviation fuel (SAF) has become a central focus of the aviation industry’s decarbonisation efforts, yet supply chain challenges persist in scaling production to meet global demand.
Navigating complexities
The SAF supply chain remains fragmented, with key challenges arising from feedstock availability, production capacity, logistical infrastructure, and policy inconsistencies across jurisdictions. Current SAF production primarily relies on waste-based feedstocks such as used cooking oil, animal fats, and municipal waste. However, the availability of these resources is constrained, raising concerns over long-term scalability.
Emerging technologies, including power-to-liquid and biomass-based SAF, offer promising alternatives but require significant investment and regulatory approval before they can be commercialised at scale. There is an urgent need for coordinated investment in refining capacity and transportation logistics to support SAF distribution. Unlike conventional jet fuel, SAF production facilities are not yet integrated into existing fuel supply chains, requiring additional infrastructure development. Transportation bottlenecks, particularly in regions lacking pipeline connectivity, further complicate large-scale SAF deployment.
Policy and regulatory considerations
Regulatory frameworks play a crucial role in SAF market expansion, but disparities between regional policies create operational and financial challenges. The European Union’s Renewable Energy Directive (RED III) and the United States’ Inflation Reduction Act (IRA) offer contrasting approaches to incentivising SAF adoption, leading to market fragmentation. While the EU has mandated binding SAF blending quotas, the US relies on tax incentives and carbon credit schemes to drive investment. This lack of regulatory alignment complicates international SAF trade and creates uncertainty for investors and suppliers.
The establishment of a globally recognised SAF certification standard, potentially under the oversight of the International Civil Aviation Organisation (ICAO), was a key recommendation to ensure compliance with sustainability criteria while reducing administrative burdens on producers and air cargo operators.
Growing demand for SAF
Air cargo operators are among the stakeholders pushing for expanded SAF availability, given the sector’s reliance on airfreight and its exposure to carbon reduction mandates. With global SAF demand projected to rise exponentially as governments enforce stricter emissions targets, industry leaders are looking at the necessity of de-risking investments through long-term commitments and financial incentives. One proposed solution is the establishment of SAF offtake agreements, whereby airlines and logistics companies commit to purchasing specific SAF volumes over extended periods.
Such agreements provide financial security to producers and encourage further investment. Additionally, industry stakeholders have advocated for the development of SAF-specific trading platforms to enhance market transparency and liquidity.
SAF supply chains
There are challenges remaining when it comes to the scaling up of SAF production to meet industry demand. While technological advancements and investment strategies continue to evolve, the pace of deployment remains contingent on policy alignment, infrastructure development, and financial backing. To accelerate progress, industry leaders urged governments to establish clear long-term policies, reduce regulatory barriers, and facilitate cooperation in SAF certification and distribution. For the air cargo sector, the transition to SAF is both an operational necessity and a regulatory imperative. As SAF projects move from concept to execution, ensuring a stable and efficient global supply chain will be paramount in achieving aviation’s long-term decarbonisation targets.
