Is Sustainable Aviation Fuel (SAF) Really More Expensive?  

As the aviation industry confronts the urgent challenges of climate change, the quest for more sustainable practices has led to a significant innovation: Sustainable Aviation Fuel (SAF). Made from non-petroleum feedstocks, SAF emerges as a game-changer with the potential to reduce greenhouse gas emissions by up to 94% compared to conventional jet fuel. The versatility of SAF production—from waste oils and fats to non-food crops—positions it as a key player in transitioning to a cleaner aviation sector. Notably, sustainable aviation fuels are lauded for their ability to seamlessly integrate with current fuel infrastructure and aircraft technologies, offering a solution that recycles CO2 and mitigates competition with food resources and water supplies.

The exploration of sustainable aviation fuel delves into its economic viability, a pressing concern that often garners scepticism about its broader adoption. The article aims to demystify the financial implications of SAF and analyse its cost metrics in relation to traditional jet fuel. Subsequently, the discourse extends to the complexities entailed in the economic landscape of SAF, including regulatory frameworks and market-driven incentives that could bolster its adoption. This analysis sets the stage for a more nuanced understanding of the road ahead for sustainable aviation fuels as the industry and policymakers collectively strive towards the ambitious goal of net-zero emissions by 2050—an objective in which SAF is expected to play a substantial role. Through a comprehensive examination, the article clarifies SAF’s relative costs and encapsulates the concerted efforts required to ensure its affordability and sustainability in the not-so-distant future.

Understanding Sustainable Aviation Fuel (SAF)

Sustainable Aviation Fuel (SAF) is a ground-breaking development in the aviation industry, offering a pathway to reduce the environmental impact of air travel significantly. Here, we delve into the specifics of SAF to understand its composition, production process, and compatibility with existing aviation systems:

  • Composition and Lifecycle Emission Reductions:
    • Produced from a variety of sustainable feedstocks, SAF is designed to mirror the chemical properties of traditional fossil jet fuel, ensuring compatibility with existing aircraft engines.
    • The potential reduction in carbon emissions can reach up to 80% over the lifecycle of the fuel, compared to conventional jet fuel. This reduction varies based on the type of feedstock used, the production methods employed, and the logistics involved in delivering the fuel to airports


  • Feedstocks and Production Process:
    • SAF utilises diverse feedstocks such as used cooking oil, animal or plant waste oils, solid municipal waste, forestry residues, and energy crops.
    • Sustainable aviation fuel (SAF) is a renewable alternative to traditional aviation fuel, with various pathways for production approved by ASTM. These pathways include Fischer-Tropsch (FT), Hydroprocessed Esters and Fatty Acids (HEFA), and Hydroprocessed Fermented Sugars to Synthetic Isoparaffins (HFS-SIP), among others. SAF can be blended at levels ranging from 10% to 50%, depending on the feedstock and production method.


  • Cost Factors and Industry Commitment:
    • Despite its environmental benefits, SAF currently bears a higher cost than traditional jet fuel, primarily due to the limited availability of sustainable feedstocks and the nascent stage of production technologies.
    • Organizations like the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO) are actively promoting the adoption of SAF by setting ambitious goals such as achieving net-zero carbon emissions by 2050 and facilitating the development and deployment of SAF through policy-making, capacity building, and dissemination of information.


By understanding the intricacies of SAF production and use, stakeholders in the aviation industry can better assess the economic and environmental implications of its broader adoption. The commitment from international organisations underscores the industry’s dedication to a more sustainable future, with SAF playing a crucial role in this transformative journey.

The Economic Challenges of SAF

The economic challenges of integrating Sustainable Aviation Fuel (SAF) into the aviation industry are multifaceted and substantial. These challenges are pivotal in understanding the broader context of SAF’s current market position compared to traditional jet fuel.

  • Production Costs and Scale: The production of SAF is encumbered by high costs, significantly exceeding those of traditional jet fuel. Key factors influencing these costs include:
    • The use of feedstocks that compete with food production, which can drive up prices due to the dual demand.
    • Complex production processes that require significant technological investment and development.
    • Lower economies of scale, as the SAF industry is still in its infancy, lacking the production volume to reduce costs through mass production.
  • Infrastructure and Distribution: The lack of a widespread infrastructure dedicated to the production, storage, and distribution of SAF contributes to its higher costs. This infrastructure deficit hampers the ability of SAF to compete on a level playing field with traditional jet fuel, given the latter’s established and efficient supply chain.
  • Policy and Regulation: The economic landscape for SAF is further complicated by policy and regulatory challenges. The absence of robust incentives or subsidies to support SAF production and utilisation, coupled with potential regulatory barriers, impedes the economic feasibility of SAF. These challenges necessitate a proactive approach to policy reform to create an environment conducive to SAF growth.
  • Market Acceptance: Airlines’ hesitancy to adopt SAF, owing to its higher costs and uncertainties regarding performance or compatibility with existing aircraft and infrastructure, presents a significant economic hurdle. Overcoming this reluctance is essential for SAF to gain traction in the market.
  • Data Management and Forecasting: For airlines to effectively implement SAF, a robust, centralised, cloud-based data management system is crucial. Such a system would enable airlines to:
    • Monitor carbon emissions in real time.
    • Optimize the balance of fuel blends.
    • Forecast future SAF usage accurately.
    • Audit operational efficiency.
    • Avoid potential government penalties by ensuring compliance with emission standards.
  • Lifecycle Carbon Emissions Analysis: The growth of the SAF market is contingent on the precise analysis of carbon emissions throughout the fuel’s lifecycle. This analysis is vital to ensure that the environmental benefits of SAF are maximised and accurately quantified.
  • Sustainable Supply Chains: Establishing sustainable fuel supply chains is imperative to maximise the reduction of overall greenhouse gas (GHG) emissions within the industry. This effort requires a careful balance to ensure sustainability while minimising the impact on food production and land use.
  • Financial Incentives: Although the high cost of SAF represents a considerable expense for airlines, financial mechanisms such as tax credits—like those provided by the U.S. Inflation Reduction Act—can help to mitigate these costs and encourage SAF adoption.
  • Production and Sustainability Goals: The industry faces the challenge of increasing SAF production while ensuring that sustainability goals are met and impacts on food production and land use change are minimised. This delicate balancing act is crucial to the industry’s ability to meet environmental commitments.

Cost Analysis: SAF vs. Traditional Jet Fuel

In the present landscape, sustainable aviation fuel (SAF) carries a higher price tag than conventional jet fuel. However, this cost differential is projected to diminish as the industry scales up and embraces more robust supply agreements. Here’s a closer look at the cost dynamics between SAF and traditional jet fuel:

  • Production and Pricing Trends:
    • As of 2022, SAF was priced at approximately 2400 USD per tonne, approximately 2.5x the price of conventional jet fuel. This disparity is largely attributed to SAF’s small production runs.
    • The cost of waste-based SAF sources hovers around twice that of traditional jet fuel, while synthetic fuels created through carbon capture can be up to 6-10 times more costly.
    • Despite these figures, the aviation sector has committed to six billion litres of SAF in forward purchase agreements, indicating a strong move towards this sustainable alternative.
  • Cost Projections and Market Dynamics:
    • Analysts predict that the expense associated with SAF will decrease over time, especially as production facilities expand and the volume of forward purchase agreements by airlines rises.
    • The anticipated reduction in SAF costs contrasts with the yearly increase in the price of traditional jet fuel envisioned long-term.
    • By 2040, with supportive policies in place, the price of SAF could align with that of jet fuel and the associated costs of CO2 emissions.
  • Current Usage and Future Requirements:
    • In 2023, SAF production reached over 600 million litres, doubling from the previous year.  
    • European demand for SAF is estimated to require 14.8 million tonnes of annual production by 2024, and 28.6 million tonnes by 2050.

The integration of SAF into the aviation industry’s fuel mix presents a promising avenue for reducing carbon emissions. As sustainable aviation fuels become more prevalent and production processes more efficient, the cost gap between SAF and traditional jet fuel is expected to narrow, paving the way for a more sustainable future in air travel.

Regulatory and Market Incentives for SAF Adoption

In aviation, adopting sustainable aviation fuel (SAF) is not merely a matter of environmental stewardship but also of regulatory compliance and market adaptation. Both the U.S. and the European Union (EU) are spearheading efforts to encourage SAF uptake, albeit through differing strategies:

  • U.S. Incentives:
    • The U.S. government has implemented a carrot approach, offering volumetric tax credits to producers of SAF mixtures that achieve at least a 50% reduction in life cycle greenhouse gas (GHG) emissions, as outlined in the Inflation Reduction Act (P.L. 117-169).
    • These incentives are designed to stimulate the low-carbon aviation fuel market by making SAF production more economically viable.
    • Producers and importers of SAF must be registered with the IRS under Sec. 4101 to qualify for these benefits, ensuring a regulated and accountable market growth.
  • EU Legislation:
    • In contrast, the EU favours a stick approach, as seen in initiatives like ReFuelEU Aviation, which mandates the production and usage of SAF and imposes penalties for non-compliance.
    • This legislation clearly indicates that for air transporters, incorporating SAF is becoming a prerequisite for their “license to fly,” especially as aviation CO2 emissions account for a significant portion of global emissions.
  • Economic Considerations:
    • Despite the higher costs of SAF compared to fossil kerosene, subsidies and legislative measures can make SAF competitive. However, the price premium for SAF, influenced by feedstock supply limitations and less cost-efficient pathways, can potentially affect airfare and profitability.
    • In the EU, the cost of CO2 emissions is often passed on to the consumer, with air travellers bearing the financial burden through increased airfares.
    • The challenge remains balancing mandates and incentives to avoid stifling business growth while not providing excessive advantages that could lead to cost inefficiency.

The divergent approaches of the U.S. and EU reflect the complexity of fostering an environment conducive to SAF adoption. While the U.S. tax credits aim to kick-start the market, the EU’s legislative mandates ensure a baseline level of SAF integration. Both strategies underscore the global urgency to transition to sustainable aviation fuels, with North America and Europe leading the charge. As the industry evolves, these regulatory and market incentives will be pivotal in shaping the future trajectory of SAF affordability and its role in achieving a more sustainable aviation sector.

The Road Ahead for SAF Affordability

The trajectory towards making sustainable aviation fuel (SAF) a viable, cost-effective alternative to traditional jet fuel is marked by several pivotal developments and strategic initiatives:

  • Scaling Production and Ensuring Sustainability:
    • To reduce the cost disparity between SAF and conventional jet fuel, there must be a substantial increase in production. This scale-up needs to be carefully managed to secure sustainable feedstock resources and to mitigate any adverse impacts on food security and the environment.
    • The current market dynamics reveal a paradox where increased production, which could lead to economies of scale and lower prices, is hampered by the initial high costs of SAF. A surge in production is contingent on significant investment, yet the cost barrier remains a deterrent for potential investors and adopters.
  • Legislative Support and Economic Incentives:
    • Governments play a crucial role in breaking the economic catch-22 of the SAF market. The introduction of legislation such as the Inflation Reduction Act has laid the groundwork for incentivizing SAF production, attracting investor interest by offering economic benefits to producers.
    • In the EU, the Net Zero Industry Act aims to support the production of SAF by incentivising investments, simplifying administrative burdens required to access state aid, and providing priority access to feedstocks to SAF producers.
  • The Farm to Fuselage Act and Stakeholder Engagement:
    • The Farm to Fuselage Act, a recent legislative proposal, explicitly calls for the inclusion of SAF in the 2023 Farm Bill. This act seeks to provide financial assistance for the development and construction of demonstration-scale biorefineries, which are essential for proving the commercial viability of SAF.
    • Direct engagement from key industry stakeholders, such as airlines and fuel producers, is imperative. Their commitment to adopting SAF will be instrumental in driving down costs and fostering a market where sustainable aviation fuels can thrive alongside traditional jet fuel.

These measures collectively chart the course for SAF affordability. The collaborative efforts of policymakers, industry leaders, and market participants are essential to ensure that sustainable aviation fuels emerge as both an environmentally responsible and economically viable choice.


Throughout this article, we have explored the many facets of Sustainable Aviation Fuel (SAF), from its environmental merits to its economic and regulatory challenges. As we’ve seen, SAF holds the key to significantly reducing aviation’s carbon footprint, and while it currently comes with a higher price tag, concerted efforts by the industry and policymakers are set to minimize this gap.

The road ahead for SAF is both challenging and promising as stakeholders navigate through high production costs and infrastructure developments to a future where sustainable fuels are the norm rather than the exception. The momentum gained from strategic investments, regulatory support, and market incentives will enable further research, innovation, and implementation, ensuring that SAF becomes a cornerstone in the sustainable transformation of air travel. As we move forward, continued collaboration across all sectors will be vital in making green aviation not just a possibility but a reality.