Sustainable Aviation Fuels Need a Faster Takeoff

By  Diana Dimitrova Jérôme Rein Nicolas Salomon, and  Pelayo Losada
Article 12 MIN read

Key Takeaways

New fuels can decarbonize the commercial aviation industry, but stakeholders will need to move faster to achieve 2030 targets. To identify challenges and opportunities, BCG surveyed more than 500 executives across the aviation ecosystem that included aircraft and engine OEMs, system and component manufacturers, airlines, lessors, and project developers.
  • Although production of sustainable aviation fuel (SAF) has been growing fast, progress has slowed due to economic uncertainty and the capital-intensive nature of production plants.
  • Most survey respondents anticipate being an observer to the SAF market in 2030, rather than a leader. Among the biggest barriers is the lack of a clear business case to justify investments in the technology.
  • Ecosystem-wide collaboration can create a virtuous circle between supply and demand.
  • To spur overall demand for SAF, aviation stakeholders should join forces to aggregate demand and set standards for trading SAF. On the supply side, the industry should scale SAF projects and collaborate on innovation beyond 2030.
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Sustainable aviation fuels (SAFs) have massive potential to decarbonize the commercial aviation industry, but most players can do more to capture that opportunity. Despite rapid growth in SAF production over the past few years, the industry is projected to fall short of its 2030 sustainability targets.

To identify the challenges and opportunities related to SAF adoption, we recently surveyed more than 500 executives at approximately 200 companies across the global aviation ecosystem. Our sample included aircraft and engine OEMs, system and component manufacturers, airlines, lessors, and SAF project developers—the majority from North America and Western Europe but covering other regions as well. Among the key findings:

Critically, the results also point to specific recommendations for stakeholders across the aviation value chain to make faster progress on SAF adoption. A common thread is the need to create a virtuous cycle in which SAF supply increases demand and vice versa. Decarbonizing commercial aviation is a massive challenge; the industry is tightly integrated and currently oriented around fossil fuels, and no individual segment wants to take the lead on SAFs without knowing that others will join them. Success will require coordination among many moving parts in the aviation ecosystem. By working together, all participants can create a stronger business case for future investment in SAFs, and ultimately for cleaner skies.

Strong Growth in SAF Production—But More Is Needed

In relative terms, SAF production is growing fast. Over the past three years, supply has increased 1,150% worldwide. (See Exhibit 1.) This remarkable surge has been driven by supportive policy frameworks, expanding corporate commitments, and early investments among early adopters, signaling a strong push to decarbonize aviation.

Sustainable Aviation Fuels Need a Faster Takeoff | Exhibit 1

In absolute terms, however, the picture looks different. The dramatic increase in supply occurred against a very small base. SAF represented just 0.3% of global jet fuel production in 2024, according to the International Air Transport Association (IATA), and new production capacity is slowing. Project announcements for new SAF facilities declined 50% to 70% from 2022 to 2023, due primarily to economic uncertainty and higher energy and operating costs that squeezed company margins. (See Exhibit 2.)

Sustainable Aviation Fuels Need a Faster Takeoff | Exhibit 2

While there is some renewed momentum in 2024 and 2025, commercial aviation faces a real risk that it will fall short of decarbonization goals.The industry had set a 2030 SAF production target as part of the sector’s broader effort to limit global warming to 2°C above preindustrial levels, and currently it will fall short of that target for the two main types of sustainable aviation fuels.

This shortfall is compounded by the sluggish pace of project approvals, with fewer than 30% of SAF initiatives reaching a final investment decision (FID). Given that facilities typically take three to five years after being funded to start producing at-scale, the risk of failing to meet 2030 targets is mounting.

Global economic uncertainty has further compounded these challenges, pushing companies to prioritize cost management and supply chain resilience over long-term investments in sustainability. Legislative delays have also hindered progress. In the European Union, for example, final SAF eligibility criteria under the ReFuelEU Aviation initiative and clarifying implementation timelines were delayed, slowing new project announcements. These setbacks have raised concerns about the reliability of regulatory-driven demand.

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Key Survey Results

The results of our survey indicate substantial levels of uncertainty and hesitancy among industry leaders, presenting challenges to reaching 2030 targets. Respondents also see carbon pricing playing a role in the transition to SAF.

Investment levels have been uneven, with no clear market orchestrator.
Overall, about half of commercial aviation players now allocate more than 4% of their revenue or budget allocations to SAF investments. But some segments are ahead of others. Project developers and aircraft and engine manufacturers have led the charge, channeling significant resources to develop the market. (See “Aircraft OEMs Are at the Forefront of SAF Adoption.”) In contrast, airlines and airports, constrained by tighter financial margins, have invested just 1% to 3%, often prioritizing aircraft fleet renewal over riskier SAF projects. (See Exhibit 3.)

Aircraft OEMs Are at the Forefront of SAF Adoption
Among aerospace players, aircraft OEMs have taken the lead on investing in decarbonization technologies—primarily focusing on bio-SAF—followed by airlines. (See the exhibit.)

SAF production. Airbus has announced several investments, including a $200 million project alongside Qantas in Australia and a partnership with Oman on an e-SAF hub. Meanwhile, Boeing has notably invested in Wagner Sustainable Fuels to support the development of its Australian facility and partnered with SkyNRG, investing in its production unit in the US.

Emerging SAF technologies. Airbus is exploring methanol-to-jet fuel with HIF Global and testing SAF technologies in India.

New decarbonization technologies. Boeing has committed to 60,000 metric tons of CO₂ removals from Equatic, while Airbus secured 400kt of CO₂ removal credits from 1PointFive.

Financing for industry-wide initiatives. Airbus is the anchor investor of the SAF Financing Alliance, contributing $200 million to fund mature projects.

Sustainable Aviation Fuels Need a Faster Takeoff | Exhibit 3

Most of the industry is in “wait and see” mode.
Among respondents, about two-thirds say they are interested in SAFs but waiting for the market to take off. (See Exhibit 4.) More alarming, a similar share anticipates being an observer in the SAF ecosystem in 2030. Only a small subset of players has shown active leadership, and this trend is unlikely to shift without significant incentives or mandates. The lack of bold, coordinated action risks exacerbating the current shortfall, leaving the industry reliant on reactive responses to regulatory changes.

Sustainable Aviation Fuels Need a Faster Takeoff | Exhibit 4

Individual organizations may not realize the scope of the challenge ahead.
Our results also show a stark gap between confidence levels about sustainability and preparedness to meet those goals. Among respondents, 80% of companies are confident that they can achieve their 2030 SAF objectives. Yet only 14% feel well-prepared to overcome challenges along the way. Airports and lessors are particularly lagging, with just 6% and 0% readiness, respectively. (See Exhibit 5.) This lack of preparedness among key stakeholders threatens to undermine the industry’s ability to close the SAF supply gap and meet decarbonization goals.

Sustainable Aviation Fuels Need a Faster Takeoff | Exhibit 5

The lack of a clear business case is a major obstacle to greater investment.
Production costs and fuel prices remain the top obstacles, cited by 52% of SAF producers1 1 SAF producers include SAF project developers, energy companies, and banks and financing companies. and 49% of off-takers.2 2 SAF off-takers include manufacturers (OEMs, system and component suppliers, military), passenger airlines, air-freight players, airports, and lessors. The result is a vicious cycle: Limited supply keeps prices high, which in turn dampens voluntary demand and willingness-to-pay, undermines the business case for SAF, restricts supply development, and delays the critical learning needed to reduce costs.

A related challenge is that developers face difficulties securing financing for SAF projects due to the reliance on non-binding memoranda of understanding (MoUs) rather than binding, long-term off-take agreements. Current technology cost curves suggest that the cost premium for SAF over conventional A1 jet fuel may persist well beyond 2030, perpetuating the cycle of limited adoption, constrained investment, and delayed scaling of SAF technologies.

Industry players say that carbon pricing could spur adoption.
Outside of regulatory mandates, the industry sees carbon-pricing as a potential solution. By placing a financial cost on the externalities of fossil fuels, carbon pricing schemes could reset the economics of SAF versus conventional jet fuel, making SAF investments far more attractive. Considering other industries that are already under carbon pricing schemes and the potential industry-wide development of this mechanism for airlines, carbon pricing could stimulate voluntary demand for SAF by aligning economic incentives with sustainability goals, creating a more robust foundation for long-term investment.

SAF Is Ready to Take Off

Despite the challenges highlighted in our survey, the long-term momentum for structural change in the aviation industry remains strong. European regulators set the first tranche of SAF mandates at the beginning of 2025. As interest rates stabilize and inflation normalizes, product costs will decrease. Additionally, substantial policy momentum is building, with key legislative frameworks finalized in 2024 across Europe, North America, and South Asia.

These developments can accelerate the aviation industry’s decarbonization journey by improving market liquidity and boosting investor confidence. But industry stakeholders must also take action to capitalize on improving market conditions.

A Roadmap for Collaboration

Achieving 2030 SAF targets will require overcoming key adoption challenges through ecosystem-wide collaboration. Unlike other industries like steel, where fierce competition often hinders collaboration, the commercial aviation sector’s integrated structure offers a unique opportunity to drive transformational change through collective action.

Specifically, greater SAF adoption requires creating a virtuous circle between supply and demand. Stronger and more predictable demand for SAF will improve the business case for project developers and financiers to invest in new facilities, thus increasing supply and advancing production technologies. As supply goes up, pricing comes down, which will further stimulate demand.

To create this dynamic, stakeholders in commercial aviation should focus on four catalytic, collective actions—two focused on demand and two addressing supply. Together, these actions can have an impact far exceeding what any individual player could achieve on its own.

Demand side: Aggregate demand.
Long-term, firm demand is essential to de-risk projects, attract investment, and increase production capacity. Mandates will help. The industry needs a full-fledged marketplace that can consolidate demand across a wide range of players to send strong demand signals to improve investor confidence and accelerate project timelines. Unlike supply-side factors, aggregating demand is less capital-intensive but plays a crucial role in creating the virtuous circle. Notable examples include:

While these programs are noteworthy, they are also relatively small-scale—serving primarily as a proof of concept and a foundation for more ambitious measures that can help the industry achieve critical mass.

Demand side: Set industry-wide standards for SAF markets.
The nascent stage of the SAF market entails fragmented, peer-to-peer transactions. Standardized frameworks can set consistent standards for SAF—including eligibility, contracting, and trading—leading to a transparent, liquid, scalable market.

Supply side: Scale SAF projects.
To scale SAF production effectively, industry players must collaborate through consortiums that optimize capex and leverage economies of scale through mega-production facilities. In bio-SAF, numerous jumbo projects have already been announced, notably by Cepsa, Chevron, bp, DG Fuels, and truAlt alongside consortium partners—each targeting an output of several hundred (or even a million) kilotons of production. At the same time, bio-SAF is also more technologically mature, meaning that the cost-reduction potential through scale is lower.

In e-SAF, lower technology maturity and higher risk mean that most announcements have been for smaller projects, each producing a few tens of kilotons per year. Ramping up to bigger projects will require large consortiums bound by joint risk-sharing initiatives that can develop projects on time, achieve economies of scale, advance along the cost curve, and spur greater demand. Executing this kind of project will require a lineup of highly motivated and skilled partners to mitigate risks at every step, along with providing the capital needed.

The need for a bold vision in terms of e-SAF is growing, given that European mandates will require e-SAF as part of the overall jet fuel mix by 2030. Boeing is a good example. The company recently signed a strategic partnership with European provider Norsk e-Fuel to develop one of the continent’s first industrial-scale facilities to produce e-SAF.

Supply side: Collaborate on SAF innovation beyond 2030.
As the market continues to grow beyond 2030, the commercial aviation sector must secure access to breakthrough technologies to sustain momentum, reduce costs, and meet escalating demand. Advancing underfunded areas, particularly e-SAF, will be crucial to scaling non-biomass-constrained, high-performing fuels that align with stricter decarbonization mandates. For example, breakthrough innovations such as advanced carbon capture technologies or methanol-to-jet pathways to produce e-SAF hold the potential to push the cost of SAF closer to that of fossil fuels.

Across all four catalytic actions, success requires that some entity take a leading role in orchestration. Although this could fall to multiple segments in the commercial aviation value chain, we believe that aircraft and engine OEMs are potentially the most likely candidates, as they have the size, financial strength, and credibility that some airlines may not currently have. In addition, they have strong relationships across the value chain (for example, dealing directly with airlines in ways that project developers do not).


Climate change is accelerating, and the aviation industry is not acting rapidly enough, with a real risk of missing its 2030 production targets for SAF. As our survey shows, most stakeholders are hesitant to make significant investments in SAF, primarily due to the lack of a clear business case. This should be taken as a “last call” to accelerate investment, regulation, and market maturation, creating conditions for SAF success that all players in the aviation ecosystem can reasonably accommodate. This is not a challenge that any market participant can solve on its own. Instead, cross-industry collaboration on both the supply and demand side is critical. By working together, the industry can create a more stable demand for SAF, spurring production and leading to lower costs. In that way, it can capitalize on the decarbonization potential of SAF to create cleaner skies and a healthier future for planet—in 2030 and beyond.

Authors

Managing Director & Partner

Diana Dimitrova

Managing Director & Partner
London

Managing Director & Senior Partner

Jérôme Rein

Managing Director & Senior Partner
Paris

Project Leader

Nicolas Salomon

Project Leader
Paris

Managing Director & Partner

Pelayo Losada

Managing Director & Partner
Madrid

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