Airlines are sounding an alarm over the shortage of sustainable aviation fuel, saying it is the most significant barrier to cutting flight emissions this decade. Carriers and industry groups say demand is rising fast, but supply is lagging, creating a widening gap as climate deadlines near.
The warning comes as regulators in the United States, Europe, and Asia set cleaner fuel mandates and net-zero targets. With passenger traffic nearing or surpassing pre-pandemic levels in many regions, the sector faces a hard question: how to meet climate goals when the primary low-carbon fuel is scarce.
What Is SAF and Why It Matters
Sustainable aviation fuel, or SAF, is made from feedstocks such as used cooking oil, agricultural residues, and some waste gases. It can also be produced through power-to-liquid processes that use captured carbon and green hydrogen. SAF can be blended with conventional jet fuel and used in existing aircraft and infrastructure.
Industry bodies view SAF as the most practical near-term tool for reducing the lifecycle emissions of flying. Many airlines have pledged that SAF will account for a significant share of their fuel mix by 2030, with long-term plans aiming for net-zero emissions by 2050.
A Supply Squeeze Stalls Momentum
“An adequate supply of SAF remains the industry’s most significant hurdle to decarbonization.”
That warning reflects the current market. Global SAF production remains a small fraction of total jet fuel use. Industry estimates put it at well under 1% of aviation’s fuel needs in 2023. Output is growing, but not nearly fast enough to match airline commitments and
government targets.
Refiners cite limited access to feedstocks, high capital costs for new plants, and uncertain long-term policy as reasons for slow buildout. Power-to-liquid projects promise larger volumes in the future, but most are still in their early stages.
Costs, Mandates, and Market Signals
Price is a key constraint. SAF can cost two to five times more than conventional jet fuel, depending on the pathway and region. Airlines say long-term policy incentives are crucial to narrow the price gap and unlock financing for new facilities.
Policy efforts vary by region. The European Union’s ReFuelEU Aviation law sets rising
SAF blend requirements starting mid-decade. The United States
offers producer tax credits under recent climate legislation, though airlines and suppliers say multi-year certainty is needed. Several Asian hubs are developing mandates and incentives to
compete for new investment.
- Blend mandates aim to create guaranteed demand for producers.
- Tax credits and grants lower project risk and borrowing costs.
- Clear rules on eligible feedstocks guide investment choices.
Airline Strategies and Supplier Plans
Carriers are signing offtake agreements to secure future volumes and signal demand to developers. Some large airlines have equity stakes or partnerships in SAF producers. Airports and fuel suppliers are expanding infrastructure to handle higher blends and more diverse fuels.
Still, the timelines are tight. Even with multiple plants under construction, volumes projected for the next few years
fall short of what would be needed to hit aggressive 2030 targets. Smaller and regional airlines worry they will face higher
costs and limited access if supply remains tight.
Environmental and Community Considerations
Environmental groups support SAF as a tool, but warn about the quality of feedstock and land use. They argue that strict sustainability rules are needed so fuels deliver real lifecycle emissions cuts and do not compete with food crops. Certification schemes and auditing are expanding to
address these concerns.
Communities near proposed facilities want clear plans for air quality, water use, and job creation. Developers say
modern plants can meet strict standards and provide local benefits if sited well.
What to Watch Next
Analysts identify three key markers of progress. First, final investment decisions for large-scale plants using a range of technologies, including power-to-liquid. Second, stable multi-year policies that lower costs and attract capital. Third,
the broader adoption of transparent tracking systems would enable buyers to claim the climate benefit of SAF even when physical supply is limited at a given airport.
More corporate travel programs are also
buying SAF certificates to close the price gap. That could accelerate demand signals, especially if accounting rules align across regions.
The industry’s message is clear: supply must scale quickly to match climate goals. Airlines say they will continue to sign long-term deals and support new projects, but they cannot bear the cost alone. Stronger policy, more feedstock pathways, and faster permitting could unlock the next wave of capacity. If those elements align, SAF could transition from a niche to a meaningful share within the next decade. If not, airlines may face higher compliance costs and a slower path to lower emissions.
