Sustainable Aviation Fuel (SAF) is the most viable near-term solution for decarbonizing aviation, capable of reducing lifecycle CO₂ emissions by up to 80%. However, despite ambitious industry goals, SAF still accounts for less than 0.5% of global jet fuel consumption in 2024.
What’s preventing large-scale adoption?
💡 Key Barriers to SAF Growth 💡
✅ The Investment Bottleneck – Reaching FID
SAF facilities need billions in investment, but many projects stall before reaching Final Investment Decision (FID) due to the absence of bankable offtake agreements. Airlines demand SAF, but without structured long term contracts and price risk mitigation, securing financing remains a challenge.
✅ High Costs & Market Immaturity
SAF costs 2-8x more than conventional jet fuel, depending on feedstocks and technology. Airlines should not lock themselves into high prices long-term commitments, as new technologies will decrease costs with industry scaling and efficiency improvements. Pricing mechanisms, risk-sharing agreements, and reliable SAF indices are needed to align financial incentives across stakeholders.
✅ Technological Uncertainty & Scalability Issues
While HEFA is commercially available, its feedstock supply is limited. Other pathways like Alcohol-to-Jet (AtJ), Gas Fischer-Tropsch (GFT), and Power-to-Liquid (PtL) offer scalability but face high capital costs and efficiency uncertainties. Investors and airlines must balance short-term feasibility with long-term potential.
⚡ The Path Forward ⚡
1️⃣ Bankable Long-Term Offtake Agreements Structured SAF contracts are essential for unlocking financing and reaching FID. But that’s a little easy to say. But that’s a little easy to say without providing a solution that enables them to do so without asking them to take unmanageable risks nor asking tax payer money to simply pay for the risk mitigation. We will focus on this topic in our next article.
2️⃣ Technology Diversification & Strategic Investments
Balancing short-term availability (HEFA) with long-term scalability (FT, AtJ, PtL) is crucial. Airlines need a strategy to manage diverse SAF portfolios without bearing all the complexity and risk. We will focus on this topic in a future article.
💬 What do you see as the biggest challenge to scaling SAF? Let’s discuss.
About ATOBA energy
ATOBA is the midstream Sustainable Aviation Fuel (SAF) aggregator that provides to airlines and jet fuel resellers long-term SAF contracts to optimized market SAF pricing indexes thanks to demand and supply aggregation. We bring high security and competitiveness to the SAF supply chain of our airline partners via offtake from diversified producers and technologies, best-in-class sector expertise, and strategic participations to the SAF projects’ equity. ATOBA aggregation strategy enables the scaling of the SAF industry by providing long term offtake agreements to producers that support their Final Investment Decisions for their production projects.
For media inquiries: press@atoba.energy