Market for Sustainable Aviation Fuel Anticipated to Surpass $82 Billion by 2035

Market drivers include government efforts and corporate environmental, social & governance initiatives

Apr 27, 2023

A new report from Guidehouse Insights explores the market for sustainable aviation fuel (SAF).

Prior to the COVID-19 pandemic, commercial aviation accounted for over 2% of global greenhouse gas (GHG) emissions. Among other solutions, industry stakeholders are looking to reduce these GHGs by pursuing three alternative fuel strategies: SAF, hydrogen, and electricity. Of these, SAF, also known as sustainable drop-in fuel, is the most developed and economically feasible today. According to a new report from Guidehouse Insights, the global SAF market will grow significantly, with revenue surpassing $82 billion annually by 2035. Much of the revenue is expected during the latter half of the outlook period, driven by technology maturity and market mandates.

“SAF use typically generates 60% to 95% fewer GHG emissions compared with a fossil fuel reference value of 89 grams of CO2 equivalent per megajoule,” says Elizabeth Wilson, research analyst with Guidehouse Insights. “Additionally, SAF has been tested in long-haul flights and can be incorporated into existing fuel infrastructure and engines without costly modifications.”

SAF markets are driven by multiple forces. Governments are moving to incentivize and mandate SAF use through policies such as the European Union’s ReFuelEU proposal, which would set an SAF target of 63% market share by 2050, and the US SAF Grand Challenge, which aims for 3 billion gallons of SAF production per year by 2030. Corporate environmental, social, and governance initiatives are giving airlines strong indications of market demand and value around decarbonization.

However, significant challenges must be addressed. SAF production is considerably more expensive than conventional jet fuel production—2 to 10 times the cost—and the two are unlikely to reach parity within the outlook period. A substantial component of this cost is tied to the immature distribution system for SAF.

The report, Market Outlook for Sustainable Aviation Fuels, provides an assessment of the current and future SAF market, including an overview of the market drivers and challenges, key industry players, and production outlook through 2035. The outlook is provided for major world regions across all nine ASTM-certified SAF production processes. An executive summary of the report is available for free download on the Guidehouse Insights website.


*The information contained in this press release concerning the report, Market Outlook for Sustainable Aviation Fuels, summary and reflects the current expectations of Guidehouse Insights based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Guidehouse Insights nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.