Industry Cooperation Needed to Promote SAF

The production of sustainable aviation fuels (SAF), which play a key role in decarbonizing aviation, has grown rapidly in recent years, but wider adoption requires industry-wide collaboration, according to an analysis sent to MTI by the Boston Consulting Group (BCG) on Wednesday.

According to a BCG survey of more than 500 executives from 200 companies, the majority of industry players are waiting instead of actively promoting the spread of sustainable fuels.

The European Union's ReFuelEU Aviation regulation stipulates that by 2030, at least 6% of aircraft fuels must come from sustainable sources, they noted.

The press release quotes Ádám Karakas, a partner at Boston Consulting Group, who says that the gap between industry players' commitments and actual progress is widening. Companies need to come together and take decisive action, otherwise the global climate goals set for 2030 will not be met, he added.

SAF production has increased 12-fold over the past three years, from 100 million liters in 2021 to 1,250 million liters in 2024, but even so, it accounts for barely 0.3% of global jet fuel production.

An unfavorable trend is that the number of announced projects fell by 50-70% between 2022 and 2023 due to soaring energy and operating costs.

Eighty percent of the companies surveyed by BCG are optimistic about achieving the 2030 targets, but only 14% feel prepared to meet the challenges. Aircraft manufacturers are ahead in development, while airlines and leasing companies are less committed, the consulting firm pointed out.

The wider adoption of sustainable aviation fuels requires the aggregation of demand, as long-term, stable demand reduces financial risks and can make investments more attractive, they pointed out.

To increase production capacity, BCG calls for closer cooperation among industry players to leverage economies of scale and optimize costs.

The BCG study shows that building a new SAF plant and running it at full capacity can take many years, while the regulatory environment also harbors uncertainties. Currently, less than 30% of projects reach the final investment decision, which further slows market growth, the analysis shows.