New York, United States, Nov. 28, 2023 (GLOBE NEWSWIRE) -- Sustainable aviation fuel (SAF), or renewable aviation fuel (RAF), is an environmentally beneficial alternative to fossil fuel. SAF is derived from renewable resources such as waste lipids from biological waste, agricultural residues, and non-fossil CO2. RAF is a so-called drop-in fuel that can be mixed with fossil aviation fuel without any modifications to infrastructure or equipment. The first flight using blended biofuel began in 2008, and since 2016, more than 370,000 flights have utilized RAF. American Society for Testing and Materials (ASTM)-approved methods for reducing emissions in the aviation industry are used to manufacture RAFs. Aviation is one of the world's largest carbon emitters, and carbon emitted at higher altitudes is potentially more dangerous than the carbon emitted at sea level.
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Supportive Policies and Rising Emission Concerns Drive the Global Market
According to Straits Research, “The global renewable aviation fuel market was valued at USD 2,944.15 million in 2022. It is estimated to reach USD 145371.63 million by 2031, growing at a CAGR of 54.23% during the forecast period (2023–2031).” Government initiatives contributed to the development of renewable aviation fuel in key markets. In response to rising concerns about aviation emissions, several significant nations are considering implementing regulations to support the development of sustainable renewable fuels. To reduce main emission levels and achieve net-zero emissions by 2050, substantial technological challenges and government support for renewable aviation fuels, such as sustainable aviation fuels, are required (SAF). It emits 80% less CO2 over its lifecycle than kerosene. Therefore, the demand for renewable aviation fuel will increase in the future years.
The International Civil Aviation Organization (ICAO) declared 2016 the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The aviation industry will attain carbon-neutral growth in the future, according to CORSIA. The obligation of CORSIA was already in effect; as of January 2019, operators were required to report their annual emissions. Flights between states that voluntarily participate in the program will be subject to mitigating requirements between 2021 and 2026. Nonetheless, 81 states, which collectively account for more than 75% of the aviation market, have signaled their willingness to join the program, which is anticipated to impact the aviation fuel market significantly.
Increasing Awareness of Food Safety Creates Tremendous Opportunities
The expansion of the aviation industry is driven by the growing number of air passengers worldwide due to reduced airfare, improved economic conditions, and rising disposable income. Commercial airline passengers were severely impacted by the closure and travel restrictions imposed during the COVID-19 pandemic. Concurrently, the revenue of commercial airlines fell by over 55%. The aircraft industry started to recover due to the creation and distribution of vaccines, the abolition of government-imposed travel restrictions, and the opening of borders. According to the International Air Transport Association (IATA), in 2021, there were 47% fewer travelers than in 2019. It is anticipated to increase to 83% in 2022, 94% in 2023, 103% in 2024, and 111% in 2025. Consequently, the recovery and expansion of air passenger traffic are anticipated to increase and persist throughout the forecast period, creating opportunities for market expansion.
Regional Analysis
North America renewable aviation fuel market share is anticipated to exhibit a CAGR of 57.84% during the forecast period. North America is among the largest markets for renewable fuel and the aviation industry. In 2020, more than 397 million passengers were transported via aviation in North America, representing approximately 22.2% of global traffic. In 2020, nations such as the United States and Canada accounted for most air passengers. Between 1978 and 2020, American Airlines' fuel efficiency increased by more than 130 percent, saving close to 5 billion metric tons of carbon dioxide. In addition, Airlines for America (A4A) estimated that, before the pandemic, the U.S. carriers operated approximately 28,000 flights per day worldwide. In 2020 and 2021, most North American airlines reported significant losses. However, in 2022, a rebound in air travel is anticipated. Due to the steep increase in the price of crude oil, demand for renewable aviation fuel is anticipated to increase during the forecast period.
Europe is estimated to exhibit a CAGR of 52.18% over the forecast period. In 2021, Europe will be one of the dominant regions for biofuel production technologies, with many operational production plants. Bio-based aviation fuel production capacity in the region depends on a limited number of plants, with an annual maximum output of approximately 3 million metric tons. In addition, the region's aviation industry voluntarily committed to ambitious objectives and identified bio-based aviation fuels as a potential means of enhancing its environmental performance. The European Commission (EC), in coordination with Airbus, leading European airlines, such as Lufthansa, Air France, and British Airways, and key biofuel fuel producers, such as Neste and Biomass Technology Group, launched the European Advanced Biofuels Flight Path initiative in 2011 to accelerate the commercialization of aviation biofuels in Europe, thereby driving the regional market growth.
Key Highlights
- Based on technology, the global renewable aviation fuel market is bifurcated into fischer-tropsch (FT), hydroprocessed esters and fatty acids (HEFA), and synthesized iso-paraffinic (SIP) and alcohol-to-jet (AJT). The HEFA segment dominates the global market and is projected to exhibit a CAGR of 53.70% over the forecast period.
- Based on application, the global renewable aviation fuel market is segmented into flexible commercial and defense. The commercial segment owns the global market and is estimated to exhibit a CAGR of 55.80% during the forecast period.
- North America is the most significant global renewable aviation fuel market shareholder and is anticipated to exhibit a CAGR of 57.84% during the forecast period.
Competitive Players
The key global renewable aviation fuel market players are TotalEnergies SE, Swedish Biofuels AB, Neste OYJ, Red Rock Biofuels LLC, Fulcrum BioEnergy Inc., Gevo Inc., Honeywell International Inc., SG Preston Company, and LanzaTech Inc.
Market News
- In May 2023, Oleo-X, a leading pioneer and supplier of premium renewable fuel feedstocks, launched its world-class renewable diesel (“RD”) and sustainable aviation fuel (“SAF”) feedstock merchant processing facility.
- In February 2023, Airbus SE and Qantas Airlines Ltd announced the first USD 200 million fund investment in Australia's sustainable aviation fuel (SAF) market within a month.
Global Renewable Aviation Fuel Market: Segmentation
By Technology
- Fischer-Tropsch (FT)
- Hydroprocessed Esters and Fatty Acids (HEFA)
- Synthesized Iso-Paraffinic (SIP) and Alcohol-to-Jet (ATJ)
By Applications
- Commercial
- Defense
By Regions
- North America
- Europe
- Asia-Pacific
- South America
- The Middle East and Africa
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