Financing Sustainable Aviation Fuels 2025

Executive summary By 2030, demand for global SAF is expected to reach 17 million tonnes per annum (Mt/a), representing approximately 4-5% of total jet fuel consumption. This demand projection includes government-mandated volumes and voluntary commitments by airlines. However, current SAF adoption remains limited, with only three airlines – Air France-KLM, DHL and IAG – consuming over 1% of SAF in their fuel mix as of 2023. Government policies, such as the US SAF Grand Challenge and the European Union’s ReFuelEU mandate, aim to boost demand either through incentives or mandates, but further production scale- up will be essential to meet these targets. SAF production capacity appears to be lagging behind projected 2030 demand. By the end of 2024, installed SAF capacity globally is likely to have reached 4.4 Mt, with an additional 6.9 Mt of capacity expansion planned through both greenfield projects and retrofitting existing facilities. Reaching the anticipated level of demand in 2030 would thus require an additional 5.8 Mt of SAF production capacity, which would need to secure final investment decisions (FID) by 2026. Different technological pathways for SAF production bring unique CapEx requirements and scalability challenges, influenced by feedstock availability and technological maturity. The four principal production technologies are summarized below – each varies significantly in cost, maturity and capital requirements: 1 HEFA (hydroprocessed esters and fatty acids): The most mature and cost-effective pathway, HEFA is expected to dominate SAF production to 2030. Its lower CapEx requirements are due to existing infrastructure and proven technology, although HEFA faces feedstock constraints. 2 Alcohol-to-Jet (AtJ): AtJ is an attractive option, especially in regions with ample ethanol infrastructure. However, AtJ facilities face higher capital costs due to the need for on-site ethanol processing and specialized equipment for alcohol dehydration and oligomerization. 3 Gasification-Fischer Tropsch (G-FT): G-FT offers high scalability but requires complex infrastructure to handle solid feedstocks like biomass. This pathway is CapEx-intensive due to the need for gasification, syngas cleaning and carbon capture technologies.4 Power-to-Liquid (PtL): Although PtL holds potential for large-scale SAF production, its CapEx requirements are the highest. PtL relies on renewable electricity, electrolysis and CO2 capture, all of which are energy- and  cost-intensive. To scale-up SAF by 2030, this report presents three investment scenarios based on different technology mixes. These scenarios indicate that the industry may require between $19 billion and $45 billion in CapEx by 2030, depending on the proportion of HEFA in the production mix. Advanced pathways such as PtL and AtJ are expected to gain greater market share under more ambitious decarbonization strategies, although HEFA is likely to remain dominant in the near term. The SAF refinery lifecycle involves five critical phases: conceptualization, pre-feasibility, FID, construction and commissioning. Each phase presents distinct financial challenges. The HEFA pathway’s maturity allows for faster timelines, while AtJ and G-FT projects face extended development periods. Navigating policy, market, technology and feedstock risks, particularly through long- term policy consistency and feedstock security, is essential to attract capital investment. Based on early success stories, at least 10 financial levers can be explored to mobilize the necessary investment: 1 Research and innovation grants: Early- stage, high-risk SAF technologies need grants from governments and philanthropic organizations to reduce upfront costs and make projects more attractive to private investors. Programmes such as the UK’s Advanced Fuel Fund enable SAF developers to advance engineering and work with technology providers to de-risk their projects. 2 Multilateral development bank support: Multilateral development banks (MDBs) can offer valuable expertise, particularly in developing regions with complex regulatory landscapes. They conduct feasibility studies and may invest through debt or equity as projects near FID, exemplified by support from the European Bank for Reconstruction and Development (EBRD) for KazMunaiGas and Air Astana in Kazakhstan.Ten financial levers can be explored to scale- up SAF production and bridge additional capacity needed to reach 2030 demand. Reaching the anticipated level of demand for SAF in 2030 would require an additional 5.8 Mt of production capacity to secure final investment decisions by 2026. Financing Sustainable Aviation Fuels 4