Sustainable aviation fuels: the lift-off we need?

Europe faces a critical decade for aviation decarbonisation. Aviation remains one of the hardest sectors to decarbonise; unlike road transport, aircraft cannot realistically switch to electric or hydrogen propulsion at scale in the near term. That makes sustainable aviation fuels (SAFs) — and the next generation of synthetic SAFs (eSAF) — the most viable path for deep emissions cuts this decade.

SAFs can reduce lifecycle emissions by up to 80% while working seamlessly with existing aircraft and airport infrastructure. Yet despite this potential, SAFs today represent only around 2% of European jet fuel use. While the current supply is sufficient to meet demand, high production costs remain a significant barrier.

Conventional jet fuel trades currently at roughly US$600/t, compared with around US$2000 for SAF and US$7500 for eSAF. Producers need firm investment decisions now to expand capacity by 2030, but airlines remain cautious about long-term offtake agreements at these prices.

“No single fuel will dominate aviation in the decades ahead,” says Axel Vanmeulder, Renewable Fuels Expert. “Even in the most optimistic scenarios, fossil fuels remain part of the mix. But sustainable aviation fuel is by far the most viable option for the sector in the next twenty years.”

Overcoming the barriers to SAF adoption

The bottlenecks are clear and interconnected:

• Feedstock limits: bio-based SAFs derived from used cooking oils, food waste, and other residues will reach their practical limits between 2030 and 2040. Beyond that, scaling eSAF production using renewable hydrogen and captured carbon will be vital. This makes early planning for synthetic fuels essential to avoid future shortages.
• Price gap: SAF today costs roughly three times more than fossil jet fuel, and eSAF is currently more than 10 times as expensive, making long-term offtake agreements difficult to secure.
• Investment risk: producers face multi-billion-dollar capital commitments years before revenues flow. Without credible offtake deals or policy certainty, projects remain financially unviable.
• Policy instability: airlines and producers need predictable, long-term frameworks. Sudden changes in mandates or incentives can delay projects and reduce investor confidence.
• Credibility: “Supply chains need watertight certification and audits,” notes Axel Vanmeulder. “If there’s any suspicion of greenwashing — like palm oil being passed off as waste oil — the entire market risks losing trust.

“The cost gap is the biggest barrier. Jet fuel today trades around US$600/t, SAF is about US$2000, and synthetic SAF is closer to US$7500. Airlines are hesitant to sign long-term offtake agreements at those levels and with these price gaps, yet without them producers can’t move forward with investment decisions.

“Feedstocks like used cooking oil and food waste can only take us so far — they’ll reach their limits by 2030 – 2040. That’s why synthetic fuels, made from renewable hydrogen and captured carbon, are already being written into future mandates.”

Regulation: driving change and creating demand

Regulation is now the sharpest lever for transformation. The European Union’s ReFuelEU Aviation regulation mandates SAF blending, rising from 2% in 2025 to 6% by 2030¹, 20% by 2035, and 70% by 2050¹. Within this framework, a sub-mandate requires eSAF to reach 1.2% of total supply by 2030 — a critical measure for synthetic fuel growth. This sharp increase could flip today’s surplus into a shortage unless projects are financed and built in advance.

“The step-up in 2030 is significant,” Axel Vanmeulder explains. “In Europe, the SAF mandate jumps from 2% to 6% overnight. That could turn today’s oversupply into a shortage if projects aren’t built now.”

In the UK, the forthcoming SAF Mandate follows a similar trajectory, beginning at 2% in 2025 and climbing to 10% by 2030², with future rises to 22% by 2040². The UK’s alignment with Europe ensures a consistent market signal across two major aviation regions.

Globally, the CORSIA scheme (Carbon Offsetting and Reduction Scheme for International Aviation) developed by ICAO (International Civil Aviation Organisation), requires airlines to offset emissions above 2019 levels³ on international flights. Though less demanding than EU rules, CORSIA establishes a global baseline, ensuring that airlines cannot ignore their emissions.

“CORSIA is a global floor — it ensures airlines can’t ignore their emissions on international flights. European mandates go further, but CORSIA makes carbon pricing and fuel transition unavoidable for every carrier worldwide.”

Beyond Europe, countries including China, Singapore, and India are developing their own SAF mandates — signalling that the transition is global and irreversible. Harmonised standards will be critical to reduce complexity and costs for airlines operating internationally.

Corporate momentum: industry taking flight

Major airlines and energy producers are already demonstrating that SAF is viable today:

• Lufthansa Group is using SAF derived from used cooking oils and waste residues, achieving lifecycle emission cuts of around 80%.
• JetBlue Airways has secured regular SAF supplies at key US airports, supported by corporate partners sharing the cost premium.
• United Airlines has launched a dedicated investment fund to scale future SAF production.
• In the UK, the RAF is deploying renewable HVO fuel across its operations4 — proof that sustainable fuels can deliver both performance and carbon reductions.

These examples show that with policy clarity, investment, and collaboration, SAF adoption is already creating tangible operational and environmental benefits.

Government and industry collaboration: lessons from fusion

Large-scale coordination between governments and industry can accelerate the deployment of breakthrough energy technologies. A prominent example outside aviation is the international nuclear fusion project, where over 20 countries are collaborating in a multi-billion-dollar experiment5 to demonstrate a proof of concept.

This demonstrates the potential for global cooperation to overcome technical and financial barriers, a model that could be applied to scaling SAF. Coordinated action, combined with policy certainty and investment support, is key to the success of high-cost, high-impact projects in aviation.

Challenges and market realities: learning from setbacks

While SAF adoption is critical, the sector faces economic and operational hurdles. Shell’s decision to cancel its Rotterdam biofuels plant provides a stark example. The facility was planned to produce up to 820 000 t of biofuels, half intended for SAF from waste cooking oils and animal fat, but after technical delays5 and market reassessments, the project was deemed “insufficiently competitive” and scrapped.

This highlights the complex interplay of cost, investment risk, and policy stability. Even technically viable projects can fail if SAF prices are too high, if airlines delay offtake agreements, or if government incentives are unclear. The consequences are significant: delayed projects reduce near-term SAF supply, potentially jeopardising Europe’s ReFuelEU 2030 targets, and signal to investors that high-capital projects require stronger policy backing.

The Shell example reinforces the need for predictable, long-term frameworks, coordinated action, and financial mechanisms like Contracts for Difference. Without these, the SAF transition risks slowing just when demand is set to increase sharply.

Policy tools to bridge the cost gap

To reach ReFuelEU’s 2030 targets, producers must begin building large-scale plants now. Yet financing remains difficult without predictable regulation or price support. Policy shifts or delayed mandates could trigger shortages just as demand accelerates.

“Contracts for Difference are one of the most effective tools available,” says Axel Vanmeulder. “They give producers confidence to build multi-billion-dollar plants today by bridging the gap between the high cost of production and what airlines are willing to pay in the future.”

Government-backed instruments like Contracts for Difference and carbon price guarantees can de-risk investment by ensuring stable revenues. Without such mechanisms, projects will struggle to reach final investment decisions — putting 2030 supply goals at risk.

Maintaining credibility and momentum

As the SAF sector scales, maintaining market integrity is essential. Rigorous certification and transparent auditing must underpin every link in the value chain to prevent reputational damage and ensure real emission reductions.

“Credibility is everything,” says Axel Vanmeulder. “If there’s any suspicion of weak certification or greenwashing, the entire market loses trust.”

Looking ahead: building an energy transition in motion

Pilot programmes are already demonstrating SAF’s technical viability, while rapid innovation in hydrogen-based and synthetic fuels is expanding future feedstock options. The transition must now move from pilot to scale.

Over the next decade, SAF will be central to global flight decarbonisation. The challenge — and opportunity — is ensuring policy, finance, and technology progress in lockstep.

CFP Energy and industry partners are calling for:

• Consistent, long-term regulation that gives investors and airlines confidence.
• Clear certification standards to protect market credibility.
• Sustained investment incentives to bridge the cost gap.

“We need to treat this as an energy transition in motion, not one waiting to happen,” concludes Axel Vanmeulder.

References

1. EU ReFuelEU Aviation mandate, 2025 – 2050. .
2. UK SAF Mandate targets and financial support mechanisms. .
3. ICAO CORSIA requirements for international flights. .
4. RAF HVO renewable fuel deployment. .
5. Shell scraps construction of Rotterdam biofuels plant, Guardian, 3 Sep 2025.

For more information, please visit: https://www.cfp.energy