The Challenge of Financing SAF Projects
Sustainable Aviation Fuel (SAF) is widely recognized as a key enabler of aviation decarbonization, yet scaling up production remains a significant challenge. One of the primary roadblocks? The lack of sufficient bankable long-term offtake agreements. Without these structured contracts, securing financing and reaching Final Investment Decision (FID) remains impossible for SAF producers.
Airlines are reluctant to commit to fixed-price, long-term contracts due to uncertainty around SAF price evolution, driven by the expectation of cost reductions as production scales and technologies enhance. On the other hand, SAF producers require stable, long-term agreements to de-risk investments and unlock project financing. This fundamental disconnect has resulted in a financing valley of death, limiting SAF expansion at a pace insufficient to meet ambitious climate targets.
What Makes a SAF Offtake Agreement Bankable?
For financiers, it must demonstrate:
✅ Price and Margins Predictability: Reducing exposure to fluctuating feedstock and energy costs.
✅ Creditworthiness of the security package : Ensuring financial stability to honor agreements over 10+ years.
✅ Volume Commitments: Securing minimum purchase obligations to support plant economics.
Structuring Bankable SAF Contracts
The difficulties in SAF contracting does not satisfy either producers or buyers. The industry requires an innovative approach that de-risks long-term offtake agreements without placing an undue financial burden on taxpayers.
🔹 Aggregating Demand: by structuring multi-airline aggregation of offtake agreements, we ensure diversified counterparty risk and improve contract bankability. Today’s fragmented demand landscape increases uncertainty for SAF producers, making it difficult for them to attract investment and secure necessary financing. By combining the purchasing power of multiple airlines, aggregation plays a crucial role in improving the bankability of offtake agreements for producers. As you probably know, the airline margins are thin and many airlines don’t have the strength of balance sheets to actually support many long term offtake agreements. The aggregation of airlines offtakes provides producers with the assurance of bankable offtake agreements. This not only provides investors with greater confidence but also enables SAF projects to achieve Final Investment Decision (FID) more rapidly.
Furthermore, aggregated demand ensures volume stability and security for producers, which is essential for reducing production costs through economies of scale. Large-volume commitments allow SAF producers to plan long-term feedstock procurement strategies, leverage on financing structure, optimize plant operations, and leverage bulk purchasing power for raw materials and logistics. These efficiencies translate to more competitive SAF pricing, benefiting both airlines and the broader aviation industry.
Ultimately, demand aggregation strategy enhances SAF offtake contracts bankability by reducing counterparty risk, stabilizing pricing, and fostering an ecosystem where SAF production and consumption can scale efficiently. This approach unlocks investment in new SAF projects, accelerates deployment, and provides a structured pathway toward achieving the aviation sector’s decarbonization targets.
🔹 Indexation & Risk Sharing: The way to secure airlines' competitiveness is by implementing long-term, market-aligned aggregated SAF index pricing that evolves alongside the maturation and scaling of the overall SAF industry. This ensures that airlines benefit from fair pricing mechanisms that reflect the evolution and improvements of production costs and reduction in fuel green house gas emissions, preventing them from facing a first-mover disadvantage by being locked into overpaying for early-stage offtake agreements based on flat-price long-term agreements. By dynamically adjusting pricing as the industry matures, airlines can maintain a cost-competitive advantage while ensuring SAF adoption aligns with their financial sustainability. This aggregated SAF index pricing is at the core of ATOBA’s value proposition and disruptive advantage for airlines.
On the producers’ side, financing their project cannot be achieved if their price is indexed to an overall SAF market price that is disconnected from their real production costs. Pricing structures should acknowledge the nuances of feedstock availability, production efficiency, and local economic conditions that enable producers to reach Final Investment Decision (FID) with confidence. By aggregating various producers’ cost structures, we are able to replicate average SAF market benchmarks, and thus we create a robust, investment-ready framework that is viable for both airlines and SAF developers.
So what’s to remember about the added value of a midstream SAF aggregator like ATOBA?
✅ For SAF Producers: Bankable contracts that provide revenue predictability, unlocking financing and enabling more projects to reach FID.
✅ For Airlines: Indexed aggregated SAF pricing models that ensure cost competitiveness over the length of the offtake contact.
✅ For Investors: De-risked SAF projects with credible long-term revenue streams become attractive, scalable investment opportunities.
The Road Ahead
Unlocking SAF’s full potential requires more than just ambition — it demands structured financial solutions that work for all stakeholders. At ATOBA, we are actively partnering with airlines, producers, financiers, and all parts of the SAF value chain to turn this vision into reality.
🚀 Want to learn more?
Let’s discuss how structured SAF contracts can unlock the next wave of aviation decarbonization. Reach out to our team to explore solutions tailored to your needs.
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