According to Future Market Insights (FMI), the sustainable aviation fuel market was worth US$ 220 Mn in 2021 and is expected to reach US$ 15 Bn by 2030, with a CAGR of 60% from 2022 to 2032.
The COVID-19 virus has spread across the globe without regard for national boundaries. As a result, it has had a severe economic and financial impact on all industries, sectors, and facets of life, as well as tremendous uncertainty.
Governments all over the world are canceling visas for foreign residents and closing down damaged areas, which is one of the principal factors for the aviation industry’s downturn.
The aviation industry is dedicated to lowering carbon emissions to create a more sustainable environment and comply with stringent emission laws. As a result, sustainable alternative fuels are being adopted by various participants in sustainable aviation fuel companies, such as improving aero-engine efficiency through design changes, hybrid-electric and all-electric aircraft, renewable jet fuels, sustainable aircraft fuel, and so on.
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Most military aircraft and commercial airlines use sustainable aviation fuel to enhance fuel efficiency and decrease operational costs.
The sustainable aviation fuel market has grown significantly over the years, owing to the growing trend of advanced fuels being employed in aircraft all over the world.
The sustainable aviation fuel market trends such as an increase in the number of airline passengers combined with an increase in disposable income, an increase in air travel, and an increase in synthetic lubricant use all contribute to the worldwide sustainable aviation fuel market growth. However, oscillations in crude oil prices and lubricant contamination are anticipated to hamper sustainable aviation fuel market growth during the forecast period.
Furthermore, the developments of environmentally friendly and safe renewable jet fuel and the rise in demand for low-density lubricants to reduce weight are likely to provide various chances for market expansion throughout the forecast period.
In terms of revenue, North America leads the market, followed by Europe, Asia-Pacific, and LAMEA. In 2020, the United States will dominate the sustainable aviation fuel market. Due to an increase in demand for sustainable aviation fuel across the country, Mexico is predicted to grow at a high rate during the forecast period.
Sustainable aviation fuel offers airlines a chance to invest in the future. The predicted growth in demand for sustainable aviation fuel is unlikely to be reached unless airline operators boost their renewable aviation fuel obligations with bio-refineries, resulting in fuel cost and availability benefits.
With the predicted rise in the adoption of sustainable aviation fuel on a global scale, airport infrastructure investments are anticipated to grow.
- On account of the increased government focus on promoting renewable jet fuel in the defense/military sector, particularly in the United States, the defense sector is expected to be the fastest-growing segment among different applications.
- In terms of revenue, the biofuel segment is likely to dominate the global sustainable aviation fuel market due to significant advances in technology approaches to commercializing the use of sustainable jet fuel.
- Based on technology, the FT-SPK segment is estimated to hold the largest market share owing to the rising number of fuel varieties with different feedstock compositions, thereby scaling up the sustainable aviation fuel market size to a great extent.
- In terms of end-use, the commercial airline sector is expected to be the fastest-growing aviation segment, attributing to rapid economic development and massive investment in improving the retail airline industry’s overall infrastructure.
- Based on blending capacity, the segment ranging from 30% to 50% is predicted to witness the largest market share, and the same can be credited to moderate blending capacity, among others.
- Biofuel is gaining traction in the global aviation fuel market share to reduce pollution and ensure sustainable air travel based on fuel type. As a result, it is expected to hold a significant sustainable aviation fuel market share.
“North America is projected to be at the forefront of the sustainable aviation fuel market on account of rising demand from various agencies to reduce their carbon footprint, as well as increased air traffic and passengers in tandem with the initiatives undertaken by the United States and Canada aimed at increasing use case scenarios for renewable aviation fuel, combined with an increasing number of government policies, are expected to increase the size of the market. Furthermore, rising air travel activity in emerging economies, along with an increase in the number of key market participants, will play a pivotal role in sustainable aviation fuel market future trends.” points an FMI researcher.
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Total Energy (US), Fulcrum BioEnergy (US), World Energy (US), Neste (Finland), and Lanza Tech (US) are a few of the crucial sustainable aviation fuel companies.
Some of the recent developments in the sustainable aviation fuel market are:
- Rolls-Royce and Shell have signed a definitive long-term partnership agreement to advance the use of sustainable aircraft fuel in engines and support the aviation industry’s decarbonization efforts. According to the agreement, the two companies will expand their collaboration, such as Rolls-new Royce’s SAFinity service for the business aerospace industry, with Shell serving as the exclusive supplier of sustainable aviation fuel.
- Neste entered into an agreement with Boston Consulting Group (BCG) to provide Neste MY Sustainable Aviation Fuel on all Finnair and SAS flights taken by BCG employees in the Nordics for business trips. This is predicted to boost the sustainable development aviation fuel market growth.
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Future Market Insights (ESOMAR certified market research organization and a member of Greater New York Chamber of Commerce) provides in-depth insights into governing factors elevating the demand in the market. It discloses opportunities that will favor the market growth in various segments on the basis of Source, Application, Sales Channel and End Use over the next 10-years.