<p>Sustainable aviation fuel offers the sector a way to reduce emissions using existing aircraft and infrastructure. Yet production remains trapped at a fraction of what is needed. Despite years of development and mounting climate pressure, SAF accounts for less than one percent of global aviation fuel use. The gap between ambition and delivery continues to widen.</p><p>Understanding why expansion has stalled matters for any business operating in or alongside the aviation sector. Airlines face rising regulatory pressure. Suppliers must navigate uncertain demand. Investors need assurance that costly projects will deliver returns. Meanwhile, UK companies bidding for contracts with airlines or airports increasingly find that carbon performance influences tender outcomes.</p><p>The barriers are not primarily technical. SAF works in aircraft. It meets quality standards. The problem lies in building a production system that can manufacture hundreds of millions of tonnes annually while keeping costs within reach. That requires feedstocks, finance, infrastructure, policy stability and coordination across multiple industries. At present, none of these elements exist at sufficient scale.</p><p>Recent research involving scientists from Trinity College Dublin and SMBC Aviation identifies more than a dozen obstacles preventing SAF from scaling. These barriers reinforce each other. High costs weaken demand. Uncertain demand makes projects harder to finance. Inadequate infrastructure limits distribution. Together, they create a system where production can grow rapidly in percentage terms while remaining commercially marginal in absolute volume.</p><h2>Why production remains far below target levels</h2><p>Global SAF production reached approximately 0.3 percent of total jet fuel supply in 2024. Output doubled from the previous year, but the base remains tiny. Projections suggest consumption could reach nine billion litres by 2030, which would still represent only around two percent of forecast aviation fuel demand.</p><p>The International Air Transport Association estimates that SAF must provide roughly 65 percent of the emissions reductions required for aviation to reach net zero by 2050. Meeting that goal would require annual supply to grow to approximately 500 million tonnes. Production would need to expand by more than 250 times over the coming decades.</p><p>Analysis published in 2024 found that only 24 percent of announced SAF capacity had been delivered on schedule. Delayed or cancelled projects outnumbered successful completions. Reaching 2050 targets would require global capacity to grow by an average of 23 percent per year from 2025 onwards. That rate of expansion has rarely been sustained across energy sectors without sustained policy intervention and reliable revenue streams.</p><p>The United States has set a target of three billion gallons annually by 2030 and 35 billion gallons by 2050, with a minimum lifecycle greenhouse gas reduction of 50 percent compared with conventional fuel. European mandates follow a similar trajectory, with required SAF shares rising from two percent in 2025 toward 63 percent by 2050. A portion of the later target is reserved specifically for synthetic fuels.</p><p>These mandates create legal demand where market forces alone would not. However, they also generate risk. If supply cannot keep pace with regulatory requirements, airlines face sharp price increases or penalty payments. Producers, meanwhile, struggle to secure financing without confidence that future policy will survive political and economic shifts.</p><h2>Feedstock constraints limit biological pathways</h2><p>Most current SAF production uses the hydroprocessed esters and fatty acids pathway, known as HEFA. This process converts waste oils and fats into jet fuel and can deliver lifecycle emissions reductions of roughly 80 percent compared with fossil kerosene. HEFA is commercially established, but the supply of suitable feedstocks is finite.</p><p>Waste cooking oil, animal fats and agricultural residues are already sought by road transport, shipping and other sectors. Competition for these materials is increasing as multiple industries pursue decarbonisation targets. Expanding SAF production by relying primarily on waste streams will not satisfy global targets without diverting feedstocks from other uses or compromising sustainability standards.</p><p>Bio-based SAF is not automatically sustainable. Climate performance depends on feedstock origin, land use effects, processing energy and transport. Using certain crops or materials can trigger indirect land use change, undermining emissions benefits. Rigorous lifecycle accounting and certification are essential, but they add cost and complexity to supply chains.</p><p>This creates a structural ceiling for waste-based production. Volumes can grow, but not indefinitely. The industry must either accept that biological pathways will provide only part of the solution or expand into feedstocks that raise sustainability questions and compete with food production or conservation priorities.</p><h2>Synthetic fuels face different obstacles</h2><p>Synthetic aviation fuel, often called e-fuel or power-to-liquid fuel, uses low-carbon hydrogen and captured carbon dioxide rather than biological feedstocks. In principle, this approach can scale beyond the limits of waste oils and residues. It also avoids land use competition and agricultural supply chains.</p><p>However, e-fuels require abundant renewable electricity, low-cost green hydrogen and carbon capture systems. Commercial expansion depends on major investment in electrolysers and fuel conversion facilities. Hydrogen availability is a structural constraint. Production sites are often geographically dispersed, making it difficult to assemble large, reliable supply volumes near major airline demand centres.</p><p>The International Energy Agency expects e-kerosene to account for only about five percent of SAF production in 2030. Europe is currently the main jurisdiction with a specific requirement for its use, which limits near-term deployment. This suggests that e-fuels will become more important over the longer term, but they will not solve the immediate supply shortage without faster deployment of renewable infrastructure.</p><p>Cost remains a significant barrier. Synthetic fuels are generally more expensive than biological SAF, which is itself several times more expensive than fossil jet fuel. The gap reflects higher capital requirements, smaller production facilities and immature technologies. As renewable electricity becomes cheaper and electrolysers scale up, costs should fall. The question is whether that happens quickly enough to meet 2030 and 2040 targets.</p><h2>Infrastructure and logistics create bottlenecks</h2><p>SAF meets the same fuel quality requirements as conventional jet fuel and works with existing aircraft and airport systems. This compatibility reduces the need for entirely new fleets. It does not, however, eliminate logistical challenges.</p><p>Airports and fuel suppliers may need additional storage tanks, blending infrastructure, fuel traceability systems and quality assurance procedures. Connections between dispersed production sites and international fuel hubs must be established. These upgrades require investment, and airport infrastructure is not uniformly equipped to manage them.</p><p>Production sites are often located near feedstock sources rather than near large airports. This increases transport costs and makes it more difficult to create bankable contracts with airlines. Fuel producers need assured offtake agreements to justify capital expenditure. Airlines need guaranteed supply at predictable prices. Without coordination, both sides hesitate.</p><p>The result is a coordination problem. Airlines need affordable fuel and dependable supply. Producers need guaranteed buyers. Airports need infrastructure. Investors need stable returns. Governments need credible emissions accounting and durable policy support. Each actor waits for another to move first.</p><h2>Policy creates demand but also generates uncertainty</h2><p>Governments use mandates, tax incentives and production targets to stimulate SAF investment. The European Union and United Kingdom are among the principal drivers of near-term demand. The United States relies heavily on tax credits. Japan has adopted blending targets. These interventions create a market that would otherwise struggle to compete with cheaper fossil fuel.</p><p>However, mandates can also create difficulties. If demand is legally required before adequate production is available, airlines face sharp price increases or penalty payments rather than access to sufficient SAF. This can undermine confidence among both airlines and fuel producers.</p><p>Long-term policy stability is essential for attracting finance. SAF plants are expensive, long-lived assets. Investors need confidence that future regulations will survive political and economic changes. The absence of predictable long-term revenues and uncertainty over future prices and regulations are major obstacles to raising capital.</p><p>Policy slowdown also matters. The IEA notes that relatively few new policies have been introduced since its previous assessment. SAF projects require long development periods and substantial upfront spending. Announcements alone do not guarantee delivery. Cancellations, delays, permitting problems, high borrowing costs and uncertain offtake agreements can prevent planned capacity from becoming operational.</p><h2>What this means for UK businesses</h2><p>The implications extend beyond airlines. SAF supply chains involve energy companies, waste processors, agricultural businesses, engineering firms, construction contractors and logistics providers. Companies bidding for contracts with airlines or airports increasingly find that carbon performance influences selection criteria.</p><p>Public sector suppliers face similar pressures. Procurement policy now considers carbon footprint alongside cost and quality. Businesses that can demonstrate credible emissions reduction strategies gain a competitive advantage. Understanding how SAF fits into aviation decarbonisation helps companies position themselves for future opportunities.</p><p>For businesses operating in aviation or adjacent sectors, the slow pace of SAF expansion creates both risk and opportunity. Airlines may struggle to meet compliance obligations, creating demand for carbon reporting and reduction services. Suppliers that can help airlines navigate regulatory requirements or reduce emissions elsewhere in their operations may find new revenue streams.</p><p>However, relying on SAF alone to meet carbon targets is risky. Production remains far below mandated levels. Prices are high and volatile. Supply chains are immature. Businesses should consider SAF as one element of a broader decarbonisation strategy rather than a complete solution.</p><p>The issue also affects business travel and corporate carbon accounting. Companies reporting Scope 3 emissions must account for air travel. As SAF becomes more widely available, businesses may face decisions about whether to pay premiums for lower-carbon flights or accept higher reported emissions. Understanding the cost and availability of SAF helps businesses plan for these decisions.</p><h2>Critical points for business planning</h2><ul><li>SAF production reached approximately 0.3 percent of global jet fuel supply in 2024, despite output doubling from the previous year.</li><li>Meeting aviation net zero targets would require annual SAF supply to grow to roughly 500 million tonnes, expanding production by more than 250 times over the coming decades.</li><li>Only 24 percent of announced SAF capacity had been delivered on schedule by 2024, with delayed or cancelled projects outnumbering successful completions.</li><li>European mandates require SAF use at EU airports to rise from two percent in 2025 toward 63 percent by 2050, with a portion reserved for synthetic fuels.</li><li>HEFA production using waste oils and fats can deliver lifecycle emissions reductions of roughly 80 percent, but feedstock supply is limited and competed for by other sectors.</li><li>Synthetic e-fuels could scale beyond biological feedstock limits but require abundant renewable electricity, low-cost green hydrogen and carbon capture infrastructure.</li><li>High production costs, uncertain policy support, infrastructure gaps and financing risks continue to restrict expansion, creating a coordination problem across airlines, producers, airports and investors.</li></ul><h2>What businesses should consider now</h2><p>Companies with aviation exposure should monitor SAF availability and pricing in their operating regions. Airlines and airports face rising regulatory pressure, which will flow through to suppliers and service providers. Understanding the timeline for mandate implementation helps businesses anticipate when compliance costs will increase.</p><p>For businesses reporting carbon emissions, SAF represents a potential option for reducing Scope 3 emissions from air travel. However, availability is limited and premiums are high. Businesses should evaluate whether paying for SAF makes commercial sense compared with other carbon reduction options or offsetting strategies.</p><p>Supply chain businesses should consider whether SAF production creates opportunities. Waste processors, agricultural firms and energy companies may find demand for feedstocks or services. Engineering and construction firms may see opportunities in plant development or infrastructure upgrades. Logistics providers may be needed to connect production sites with fuel hubs.</p><p>Businesses bidding for contracts with airlines or airports should expect carbon performance to feature in tender criteria. Demonstrating credible emissions reduction strategies and understanding aviation decarbonisation pathways can provide a competitive advantage. <a href="https://sbs.eco/compliance/">Carbon reporting and compliance support</a> helps businesses prepare for these requirements.</p><p>Policy uncertainty remains a significant risk. Mandates create legal demand, but they can also change. Businesses making long-term investment decisions based on SAF demand should consider scenarios where policy support weakens or shifts toward other technologies. Diversification reduces exposure to policy risk.</p><p>Finally, businesses should recognise that SAF addresses only part of aviation's climate impact. It primarily reduces carbon dioxide emissions from fuel combustion. Aviation also produces non-COâ‚‚ effects such as contrails and other high-altitude climate impacts. Efficiency improvements, better air traffic management, aircraft technology and demand management will remain necessary. <a href="https://sbs.eco/net-zero-program/">Comprehensive net zero strategies</a> consider multiple reduction pathways rather than relying on a single solution.</p><h2>Where to find further information</h2><p>The <a href="https://www.gov.uk/government/organisations/department-for-energy-security-and-net-zero">Department for Energy Security and Net Zero</a> provides policy updates on UK aviation decarbonisation and SAF support schemes. The department publishes guidance on eligibility criteria and application processes for government incentives.</p><p>The <a href="https://www.iea.org/">International Energy Agency</a> publishes regular analysis of SAF production, policy developments and market forecasts. Its reports cover global production capacity, feedstock availability and technology pathways.</p><p>The <a href="https://www.iata.org/">International Air Transport Association</a> offers industry perspectives on SAF deployment, including data on production volumes, airline commitments and infrastructure requirements. IATA also provides guidance on fuel quality standards and sustainability certification.</p><p>For businesses seeking to understand how aviation emissions fit into broader carbon reporting obligations, the <a href="https://www.gov.uk/government/collections/government-conversion-factors-for-company-reporting">UK government's conversion factors for company reporting</a> provide standardised emissions values for different fuel types and transport modes.</p><p>Businesses looking to develop carbon reduction strategies that account for aviation emissions can find support through <a href="https://sbs.eco/net-zero-hub/">structured net zero planning</a> that considers SAF availability alongside other reduction options.</p>
