A strategic and regulatory turning point for aviation
176 Tuesday, 17 June 2025 16:16
2025 marks a decisive turning point for the adoption of sustainable aviation fuels (SAF). Long hampered by costs about three times higher than those of conventional kerosene, their use has until now been based on voluntary commitments. However, from now on European regulations require their incorporation thereby disrupting the dynamics of the sector.
Let's look at the main takeaways:
Sharp increase in demand
Global demand for SAF is expected to increase 15 to 17-fold by 2030 compared to 2024.
- Supply has already surged 1150% in three years.
- But it still represents only 0.3% of global aviation fuel production.
Industrial challenges
Producers of SAF and HVO (Hydrotreated Vegetable Oil), such as Neste, Total, Eni or Repsol, must adapt their value chains to meet this growing demand. The supply of sustainable raw materials (used oils, biomass, etc...) remains a major challenge. Some companies commit not to produce SAF from palm oil and want a reduction in CO₂ emissions of at least 75% over the entire life cycle.
Towards 100% SAF fuels? - Today, SAF is authorized up to 50% mixed with kerosene. The goal is to achieve 100% SAF by the end of the decade which will require developing production technologies, such as:
- HEFA (Hydroprocessed Esters and Fatty Acids)
- FT-SPK (Fischer-Tropsch from biomass)
- Alcohol-to-Jet (from ethanol or other alcohols)
- E-fuels (synthetic fuels based on green hydrogen and captured CO₂)
Impacts on airlines
Mixing requirements will increase operational costs. Companies will have to adapt their pricing strategy and improve their energy efficiency to preserve their profitability. Companies such as Air France, Lufthansa Group, KLM, United Airlines, Delta, British Airways, Qantas and Singapore Airlines have already launched flights partially powered by SAF.
- 80% of companies in the sector say they are confident of achieving the 2030 SAF objectives.
- But only 14% really feel ready to implement them.
Opportunities for engine manufacturers and aircraft manufacturers
Airbus, Rolls-Royce, MTU and Safran are well positioned to take advantage of this transition, notably thanks to SAF compatible engines and energy efficiency innovations.
Strategic perspectives
SAF is no longer an option, but a regulatory obligation and an opportunity for differentiation. Players capable of controlling costs, securing supply and innovating will be the winners of this transition. Airlines will need to demonstrate economic resilience and strategic agility to remain competitive.
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