Renewable aviation fuel market seen reaching $52.68 billion by 2035

The renewable aviation fuel market is projected to grow from $2.38 billion in 2025 to $52.68 billion by 2035 as new mandates in Europe, the U.S. and Asia turn sustainable aviation fuel into a compliance-driven industry. The report points to policy support, airline decarbonization goals and emerging power-to-liquid and alcohol-to-jet technologies as the main growth drivers.

Why it matters: - Sustainable aviation fuel is moving from a niche climate solution to a regulated fuel market with real commercial demand. - The shift could reshape airline procurement, refinery investment and airport infrastructure over the next decade. - The market is projected to rise from $3.42 billion in 2026 to $52.68 billion by 2035, after reaching an estimated $2.38 billion in 2025. - The forecast implies a 33.8% compound annual growth rate through 2035.

What happened: - The European Union's ReFuelEU Aviation regulation now requires a 2% sustainable aviation fuel blend from 2025, rising to 6% by 2030 and 70% by 2050. - The U.S. Inflation Reduction Act's Section 45Z production tax credits have unlocked more than $5 billion in announced SAF plant investments. - IATA projects global SAF production will reach only 2.4 million tonnes in 2026, equal to 0.8% of aviation fuel use. - The report says North America holds 45.2% of the market, while Europe is the fastest-growing region. - Asia-Pacific is emerging as a production and consumption hub.

The details: - Sustainable aviation fuel is a drop-in alternative to conventional jet fuel made from non-petroleum feedstocks. - Feedstocks include used cooking oil, agricultural residues, municipal solid waste, captured carbon dioxide and green hydrogen. - Main production pathways include Hydroprocessed Esters and Fatty Acids, Alcohol-to-Jet and Power-to-Liquid. - SAF can cut lifecycle greenhouse gas emissions by up to 80% versus fossil jet fuel. - Used cooking oil and waste fats held 43.1% of the market in 2025. - Industrial CO2 and green hydrogen are projected to grow at a 54.6% CAGR through 2035. - HEFA technology held 74.2% share, supported by ASTM D7566 certification. - Power-to-Liquid is expected to grow at a 51.3% CAGR through 2035. - The 10% to 50% blend category held 82.4% of the market. - Commercial airlines accounted for 85.1% of demand. - Cargo and freight is projected to grow at a 29.3% CAGR.

Between the lines: - The market is shifting from voluntary climate pledges to binding compliance rules that create demand floors. - Germany's 0.5% Power-to-Liquid sub-mandate within ReFuelEU has helped drive a pipeline of announced European PtL projects totaling 1.8 million tonnes of annual capacity by 2032. - e-SAF remains far behind the policy ambition, with only 0.02 million tonnes of global capacity under construction and one production site operating. - Used cooking oil supply is capped at roughly 15 million tonnes globally, which is pushing producers to diversify feedstocks. - The cost premium for SAF versus jet fuel has fallen from 4x to about 2.5x at demonstration-scale facilities using solid-oxide electrolysis and modular Fischer-Tropsch reactors. - Book-and-claim systems are becoming important because they let buyers claim SAF environmental attributes even when the fuel is not available at their airport.

What's next: - Europe will remain a key policy driver as ReFuelEU volumes step up through 2030 and beyond. - The U.S. SAF Grand Challenge still targets 3 billion gallons by 2030. - Japan is targeting 10% SAF by 2030, India 1% by 2027 and Singapore is also advancing market development. - North American capacity expansion is being supported by refinery conversions, California and Washington low-carbon fuel standards and airline offtake agreements. - Europe is adding infrastructure, with airports in Amsterdam, Paris and Frankfurt investing a combined EUR 650 million in SAF storage and hydrant blending. - Airlines and fuel suppliers are expected to keep investing in lifecycle tracking, regulatory compliance tools and digital SAF certificates.

The bottom line: - SAF is scaling fastest where policy is mandatory, not optional, and the next phase of growth depends on feedstock diversification, cheaper green hydrogen and wider infrastructure access.