SAF production to triple to 1.5 mil mt in 2024 but progress slow: IATA

Production of sustainable aviation fuel in 2024 will triple from 2023 levels to 1.875 billion liters, or 1.5 million mt, still a tiny share of aviation's supply needs and governments have more work to do, the International Air Transport Association said Dec. 6.

The 2024 level will account for a mere 0.53% of aviation's fuel requirements and 6% of renewable fuel capacity as large shares of renewable fuel capacity coming online are earmarked for other renewable fuels, the IATA said in a statement.

SAF as a portion of all renewable fuel production will only grow to 6% in 2024 from 3% in 2023, an allocation which keeps prices high, whereas aviation needs between 25% and 30% of renewable fuel production capacity to go to SAF, IATA Director General Willie Walsh said.

"Until such levels are reached, we will continue missing huge opportunities to advance aviation's decarbonization. It is government policy that will make the difference," Walsh said.

Platts assessed SAF CIF ARA at $2,845.75/mt Dec. 5, compared to NWE CIF Jet cargoes at $849.75/mt, S&P Global Commodity Insights data showed.

"Governments must prioritize policies to incentivize the scaling-up of SAF production and to diversify feedstocks with those available locally," Walsh said.

The Third Conference on Aviation Alternative Fuels (CAAF/3) hosted by the International Civil Aviation Organization agreed a global framework to promote SAF production in all geographies for fuels used in international aviation to be 5% less carbon intensive by 2030. To reach this level, about 14 million mt of SAF needs to be produced, IATA said.

Aviation has no viable alternatives for long-haul flight decarbonization other than SAF, market watchers have noted.

Demand not a problem

Demand is not the issue as every drop of SAF produced has been bought and used. In fact, SAF added $756 million to a record-high fuel bill in 2023, according to IATA figures. At least 43 airlines have already committed to use some 13 million mt of SAF in 2030, with more agreements being announced regularly, the association said.

The majority of SAF currently in use is produced by the HEFA process, a similar method used to make renewable diesel. It is favored by refiners given the ability to convert existing refining units to run and/or co-process renewable feedstocks.

HEFA feedstocks include readily available soybean oil, beef tallow and used cooking oil, with the SAF produced needed to be blended with 50% of petroleum-based jet fuel to be viable as a drop-in fuel.

But as global SAF demand grows, the HEFA method of SAF production will not be sufficient to meet demand, nor the ever-tightening mandates for lower carbon intensity fuels and lower greenhouse gases.

Global SAF supply in 2023 is pegged at 1.29 million mt, with HEFA-based SAF accounting for 1.21 million mt of total supply, according to estimates from S&P Global.

In 2024, S&P Global estimates global SAF supply will reach 2.13 million mt, of which 2.03 million mt will be HEFA-produced SAF.

However, global SAF demand consistently lags supply, estimated at 1.24 million mt in 2023 and rising to 2.156 million mt in 2024, S&P Global said.

IATA recommended Dec. 6 that governments accelerate investments in SAF by traditional oil companies, ensure renewable fuel production incentives encourage sufficient SAF quantities, focus stakeholders on regional diversification of feedstock and SAF production, identify and prioritize high potential production projects for investment support, and deliver a global SAF Accounting Framework.