Europe Leads the Way in Sustainable Aviation Fuel Mandates
Key Ideas
  • Europe, driven by EU and UK mandates, is set to become a significant consumer of Sustainable Aviation Fuel (SAF) by 2025.
  • Global SAF production capacity is projected to exceed 10mn t/yr by 2025, primarily through the hydrotreated esters and fatty acids synthetic paraffinic kerosene (HEFA-SPK) pathway.
  • Renewable diesel demand is expected to rise due to increased mandates for renewables in road transport, but projects have faced delays impacting production output.
  • The use of hydrotreated vegetable oil (HVO) over HEFA-SPK may increase among European suppliers, while barriers such as EU anti-dumping duties on biodiesel may affect imports.
Europe is poised to be a major hub for Sustainable Aviation Fuel (SAF) consumption by 2025, fueled by upcoming mandates from the EU and UK. The anticipated mandates could drive European SAF demand above 1.5mn t next year, with global SAF supply likely to meet this demand initially. Despite the positive outlook, challenges such as delays in project completion and capacity adjustments by European companies could impact actual production levels. The dominance of the hydrotreated esters and fatty acids synthetic paraffinic kerosene (HEFA-SPK) production pathway is expected to continue, although European suppliers might shift towards maximizing hydrotreated vegetable oil (HVO) production. Moreover, the renewable diesel sector is forecasted to grow amidst increasing mandates for renewables in road transport, albeit facing hurdles like EU anti-dumping duties on biodiesel. The article highlights varying mandates in Europe and beyond, emphasizing the need for fuel suppliers to integrate SAF into jet fuel deliveries. In Europe, targets for SAF blends and other synthetic aviation fuels are set to increase significantly by 2050. Initiatives outside Europe, such as China's pilot program and Asia-Pacific region targets, indicate a broader global shift towards sustainable aviation practices. Despite progress, uncertainties surrounding US policies post-election could impact the growth of the SAF market, primarily fueled by federal and state incentives.
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