10 minute read 26 Apr 2023
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Adopting sustainable aviation fuel technology: trends and insights

Rosco Newsom

EY-Parthenon Principal, Aerospace & Defense, Ernst & Young LLP

Virginia native. Cool nerd. Outgoing introvert. Fitness, Sour Patch Kids, people-watching, and deep couch-sitting enthusiast. Passionate about volunteer work.

Raman Ram

EY Americas Aerospace & Defense Leader

Value-focused A&D leader. Transforms organizations. Turns facts and insights into practical strategies. Accelerates performance and value realization. Enjoys hiking and building home theater systems.

10 minute read 26 Apr 2023

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Accelerating the adoption of sustainable aviation fuel will depend on investments, production capacity, and government mandate.

In brief

  • Public sector and the aviation industry are positioning themselves to adopt more sustainable practices, including the use of green jet fuel technology.
  • The use of sustainable aviation fuel (SAF) is on the rise with increased SAF adoption presenting market opportunities across the value chain.
  • SAF market stakeholders must consider geopolitics, economics, and commercial viability as they progress in their adoption roadmap.

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  • Download the full whitepaper: Sustainable aviation fuel (SAF) on the rise

Sustainable aviation fuel (SAF) has been on a slow rise to replace conventional jet fuel and is widely accepted as the most promising path to achieve net zero air travel in the short to medium term. From governments to airlines, aggressive SAF goals have been implemented, but actions and policies required to meet these goals fall short. An unpredictable geopolitical and economic environment over the next five years further adds to the complexity of widespread SAF adoption. SAF adoption and capacity will likely be impacted as countries shift toward establishing bloc alliances and focus on developing policies that strengthen technologies related to energy independence and national security. It is critical to understand how different geopolitical scenarios shape the future of SAF in order to participate in the SAF economy effectively and capitalize on the promising opportunity it presents.

How SAF could be the key to greener skies

Recent advancements in green technology for the aviation sector are dramatically shifting sentiment away from the often-held, but false, view that environmental sustainability and commercial air travel are conflicting concepts.

SAF has the potential to deliver the performance of petroleum-based jet fuel, with up to a 100% reduction in net CO2, giving airlines better footing for decoupling greenhouse gas emissions (GHGs) from air travel. SAF could also be a dynamic investment opportunity for those looking for new ways to tap into the sustainability market.

The EY SAF Survey 2022 explored SAF adoption trends and a five-year market outlook. The survey included responses from industry practitioners, investors, travel industry partners and service providers. Seventy-six percent of the survey respondents consider the SAF industry to be in the emerging phase. Being in the emerging phase means there are new SAF producers entering the market rapidly to test new technology and gain market share.

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  • Chart Description#Hide Description

    SAF adoption trends

    • 76% Emerging phase
    • 10% Growth phase
    • 5% mature phase
    • 0% declining phase

    Source: EY SAF Survey 2022

    Emerging: early development and proof of concept stage for a novel technology

    Growth: beyond proof of concept and available for use in small capacity

    Mature: widely available and utilized as a preferred solution

    Declining: losing demand in the market with risk of being replaced by an alternative technology


Organizations and governments working to promote sustainable air travel see SAF as having the most impact in achieving net zero carbon emission by 2050, while other technologies are being explored. Electric and hydrogen technologies are often presented as alternatives to conventional jet fuel along with SAF, but those technologies are relatively less mature, require major infrastructure changes for both aircraft and airport logistics, and, in the case of electric, are unlikely to have sufficient range for long-haul commercial flights by 2050.

The technology of SAF

As sustainability and technology continue to become intertwined with the acceleration of decarbonization efforts, those working toward bringing SAF into everyday use have an opportunity to lead the transformation of the aviation industry. Work continues to accelerate to develop new feedstocks and new methods of making SAF a reality. Nine SAF technologies have received American Society for Testing and Materials (ASTM) approval, meaning that they can be used for commercial flight. In our report, we included four SAF technologies that are most likely to scale and attract industry attention:

  • Chart Description#Hide Description

    SAF technology assessment 

    - Hydrotreated Esters and Fatty Acids (HEFA)

    • Description - Hydro-processing of oils and fats to produce diesel fuel
    • Feedstocks - Waste and residue lipids, vegetable oils, palm, camelina, jatropha, and used cooking oil
    • 2030 Feedstock availability - 195 Mt/year
    • Conversion rate1 - 90%
    • ASTM approval - 2011
    • Maturity - 74%

    - Classification/Fischer Tropsch (FT)

    • Description - Conversion of carbon materials into synthesis gas, then fuel
    • Feedstocks - Municipal solid waste, coal, ash, and sawdust
    • 2030 Feedstock availability - 2,290 Mt/year
    • Conversion rate1 - 13%
    • ASTM approval - 2009
    • Maturity - 53%

    - Alcohol-to-Jet (AtJ)

    • Description - Conversion of alcohol using catalytic steps to produce jet fuel
    • Feedstocks - Sugarcane, sugar beet, sawdust, plant dry matter (biomass)
    • 2030 Feedstock availability - 1,330 Mt/year
    • Conversion rate1 - 20%
    • ASTM approval - 2016
    • Maturity – 16%

    - Power-to-Liquid (PtL)

    • Description - Synthetic fuel production through combining electricity with CO2 and water to produce hydrogen
    • Feedstocks - CO2, water, renewable electricity
    • 2030 Feedstock availability - N/A
    • Conversion rate1 - 17%
    • ASTM approval - Methonal and other pathways under consideration
    • Maturity - 8%

    Source: World Economic Forum, ASTM, EY analysis

    1. Yield of total output (including aviation and road fuel) relative to feedstock

Policy can also fuel adoption

A strong government push, in terms of mandates and incentives, is expected to have a significant impact on SAF production and adoption. Based on our survey, 50% of respondents believe that increased policy incentives would be the highest impact driver of adoption, while 35% believe that imposing tax burdens on traditional energy producers and users would have the highest impact. Many countries are in the initial stages of framing policies for SAF adoption, with the US leading the way with tangible policies and goals to promote SAF production. Even though 135 member countries have submitted their state action plans to reduce aviation-related carbon emissions to the ICAO to support its long-term aspirational goal of net zero emissions by 2050, a majority of them lack targeted policies and tangible incentives for a widespread SAF adoption.

  • Chart Description#Hide Description

    SAF policy development timeline

    - United States


    • Energy Policy Act — US Renewable Fuel Standard (RFS) created updates through Energy Independence Act 2007


    • SAF Grand Challenge — 3b gallons of SAF and aviation emissions reduced 20% by 2030
    • $4.3b for SAF opportunities, including $3b loan guarantee
    • $175m in research funding for technologies to reduce SAF carbon emission
    • >$61m to advance biofuels and support low-cost SAF pathways by the FAA


    • Inflation Reduction Act — Incentives to use  SAF up to $1.75 per gallon. Infrastructure grant of $245m
    • Sustainable Aviation Tax Credit — Build Back Better Agenda with tax credit for 50% or more lifecycle GHG reduction
    • Renewable Diesel and Sustainable Aviation Fuel Parity Act — EIA to report production and import of renewable diesel and SAF
    • New sustainable aviation goal

    - European Union


    • Renewable Energy Directive (RED) — EU countries to source at least 10% of their transportation energy from renewable source by 2020


    • EC 2016 — EU energy and climate goals for 2030, renewable energy target of at least 27% of total EU energy consumption by 2030
    • Initiative Towards Sustainable Kerosene For Aviation (ITAKA) — collaborative project for a large-scale European  drop-in HEFA SAF supply chain
    • Aviation Initiative for Renewable Energy in Germany (AIREG) 2016 — support the production and use of SAF, with a bio jet target of 10% of jet fuel consumption by 2025 in Germany


    • Dutch Sustainable Aviation Agreement — zero CO2 emission from domestic aviation by 2050


    • ReFuelEU Aviation — Fit for 55 package. Proposal to provide 2% SAF by 2025, 63% SAF by 2050
    • The UK government launched £15m “Green Fuels, Green Skies” competition to provide funding to early-stage development of UK SAF plants 

Geopolitical Framework:

In the recent years, geopolitics has shifted dramatically, and the outlook for the global operating environment is increasingly unclear. Global scenario analysis reveals diverging paths for geopolitics, economic policies and company strategies. The trajectory of geopolitics will shape these trends and the global business environment across aerospace and defense (A&D), and SAF in the next five years is uncertain.

We highlight four geopolitical scenarios, the economic outcome and their impact on SAF adoption:

  • Chart Description#Hide Description

    Geopolitical scenario outlooks

    Probability of outcome (%) based on EY SAF Survey 2022

    Isolationism – 5%

    • Macro impact – Trade significant reduced for most companies and more mature firms drive sector activity and development due to lack of capital 
    • SAF impact – SAF development benefits due to growing pressure for energy self-sufficiency; however, operations limited to domestic market

    Open environment – 14%

    • Macro impact – Favorable open market encourages global technology sharing and cooperation across sectors
    • SAF impact – SAF development positively impacted through expanded economic opportunities and global cooperation on supporting infrastructure 

    Cold War II – 29%

    • Macro impact – Priority placed on development of “strategic industries” tied to security and cooperation strictly limited to allied blocs
    • SAF impact – Sustainability initiatives de-prioritized relative to security, with global SAF cooperation and infrastructure severely limited to blocs

    Status quo – 52%

    • Macro impact – Global environment facilitates some international cooperation, with priority being placed on allied blocs
    • SAF impact – SAF development continues along current trajectory, with growth aligned to broader aviation sector trends
  • Scenario 1 Open Environment

    SAF adoption benefits from growing commercial air travel and the open global economic environment, with the private and commercial players pushing forward development.

    “Open environment” would be a relatively liberalized and globalized operating environment with lower geopolitical tensions. Low levels of geopolitical tensions create a more stable and predictable global operating environment for companies. Ideological blocs fade in significance as trade-driven partnerships become more important.

    Policy: US and EU policy efforts to support SAF production and adoption continue to expand and grow to support industry trends, but market forces and competition are the major driver for pushing SAF forward.

    Capacity: Greater demand for commercial air travel, and decrease in fuel and operation costs encourages SAF consumption through sustainable aviation and airline alliances. Feedstock required for SAF production is readily available and supply continues to accelerate due to better access to capital and market demand.

    Price: Investor appetite for emerging growth sectors in commercial aviation such as SAF increases in a high-growth, peacetime economy. Market forces, production efficiency and scale continue to drive SAF price down to reach parity with conventional jet fuel since policy intervention is minimal in this scenario.

  • Scenario 2 Status Quo

    SAF development continues along a positive trajectory. However, cooperation is limited to friendly blocs and alliances.

    “Status quo” would also be characterized by strong  geopolitical alliances, but trade and capital flow relatively freely among allies, leading to companies “friendshoring,” a practice of relocating production and supply chain to countries where political risk is low. Despite these divisions, geopolitical tensions are at manageable levels as governments focus on supporting domestic economic growth.

    Policy: In this environment, SAF production and adoption is still reliant on collaboration and market forces and less dependent on policies and mandates set by governments. SAF collaboration and partnerships are limited to friendly nations, and potential operational constraints for SAF usage emerge on non-allied country travel routes.

    Capacity: Domestic sources are relied upon for feedstock required for SAF, and a network is established with allied blocs to cultivate critical feedstock. Still, while customer awareness of SAF usage and initiatives continues to improve, it has yet to become a priority.

    Price: Favorable policies, like those being implemented in the US, may lead to price parity in some blocs, but price parity will be highly dependent on economies of scale due to increased international collaboration and operational efficiency.

  • Scenario 3 Cold War II

    SAF is deprioritized, but may benefit from a greater focus on defense and energy security, which could mitigate weaker investment momentum due to market uncertainty.

    “Cold War II”, in contrast, would arise from a hardening of alliances and ideological competition combined with nationalist and statist economic policies. The hardening of alliances and ideological competition creates a world order defined by two distinct blocs. But in this scenario, based on current trends, one bloc is likely to be comprised of the US, the EU and their allies, and the other led by China and its allies. There is also a third, volatile bloc of largely non-aligned countries that are under pressure to choose a side.

    Policy: Strategic industries expand dramatically, guaranteeing the defense sector access to critical production inputs, but imposing greater cost and scarcity risk on sectors not directly supporting national security programs, including commercial aerospace players, particularly airlines. Military adoption of SAF and energy independence as a national security priority, would be a game-changer and a major driver for SAF adoption in an unfavorable and risk-averse economic environment.

    Capacity: Ecosystem formation is dampened, though certain sectors (e.g., defense) may see greater government-backed collaboration. In commercial aviation, diminished capital flows benefit mature firms with greater resiliency and liquidity, hampering startups and commercial innovation, more broadly. In this scenario, capacity growth will be moderate and highly dependent on domestic production and usage.

    Price: The increased support for SAF under energy independence initiatives likely leads to price parity within allied blocs. There is less opportunity to reduce production cost by scaling up operations since the demand will be dampened, which will need to be offset by government incentives and tax credits.

  • Scenario 4 Isolationism

    SAF development becomes isolated to domestic markets, and fragmentation in infrastructure and policy reigns.

    “Isolationism” would result from decaying alliances and weak economic growth pushing countries to promote domestic production and seek greater self-sufficiency. Policymakers are motivated by achieving domestic self-sufficiency and economic security, despite the high costs involved. Isolationist policies result in increased trade volatility, creating a subdued and unstable economic growth outlook. Nationalist policies, including trade barriers, price controls and other restrictive measures, further fuel inflation. Isolationism, weaker technological progress and increased conflict risks limit business investment and productivity growth.

    Policy: Energy independence becomes a national strategic priority leading to ramp-up in SAF production through government incentives and awards. SAF also gets an extra boost from defense programs adopting SAF as their fuel choice.

    Capacity: Technological collaboration and trade flow are low, and investment required by the A&D sector is huge. Large diversified SAF producers benefit, while small specialized SAF producers struggle to compete. A lack of cross-border mobility for workers in strategic industries such, as commercial aerospace and defense, as well as weak economic growth, partially offsets upward wage pressures.

    Price: In general, fuel prices would rise, and price parity would become a more realistic goal due to the fact that there would be a lower supply of traditional energy sources, which would drive up prices in that sector. Price parity will ultimately be achieved by traditional fuel price going up rather than the price of SAF going down.

Key Takeaway and Call to Action

SAF is going to continue evolving as a key part of the aerospace industry regardless of which scenario plays out over the next five years. Depending on where you sit and how you think the global environment will change in the coming years, there is a way to get involved in the development and adoption of SAF. The commercial aerospace industry is committed to sustainability, and SAF is a core part of that solution in both the near and long term. It is time to start thinking about what you can do to be a part of this change, and how you can capitalize on the promising opportunity SAF presents. Regardless of the geopolitical scenarios, for SAF to become a viable path to achieve net zero aviation, the following actions will be critical in the near term:

  1. A push for more tangible grants and policies in the US, UK and EU. The UK and EU are significantly behind in introducing meaningful incentives to accelerate SAF production and help the industry reach price parity with conventional jet fuel. 
  2. Energy producers and investors should continue to pursue less feedstock-dependent technologies, such as PtL, to de-risk from political challenges and supply chain issues.
  3. Opportunities exist for both specialized and diversified energy producers to push forward with more mature technologies and allocate capital to build capacity to capture increasing demand from the airline industry. 
  4. As specialized energy producers continue to mature technology and operations, the diversified players looking to enter the market should pursue partnerships and acquisitions to add to their alternative energy portfolios.
  5. Corporations and airlines’ partnerships will be important to keep Environmental, social and governance (ESG) goals front and center by increasing book-and-claim activity and offsetting the carbon footprint of corporate travel.

Additional contributors to this article include Erika Solem-Ruckert and Haider Ali.


The case for SAF adoption is still ever-changing, and a host of organizations and stakeholders are keeping a close watch on regulatory, business, and political scenarios that may unfold in the mid- to long-term. ESG goals will be a force that will change the business landscape of aerospace and defense. SAF production and usage will be integral in attaining those sustainability goals, but success in this front will depend on how well organizations navigate through challenges around technology, production, and regional policies.

About this article

Rosco Newsom

EY-Parthenon Principal, Aerospace & Defense, Ernst & Young LLP

Virginia native. Cool nerd. Outgoing introvert. Fitness, Sour Patch Kids, people-watching, and deep couch-sitting enthusiast. Passionate about volunteer work.

Raman Ram

EY Americas Aerospace & Defense Leader

Value-focused A&D leader. Transforms organizations. Turns facts and insights into practical strategies. Accelerates performance and value realization. Enjoys hiking and building home theater systems.