SAF market projected to reach US$50 billion by 2036

The global SAF market is projected to reach US$50 billion by 2036, according to forecasts published in the report“Sustainable Biofuels & E-Fuels Market 2026-2036: Technologies, Players, Forecasts” by IDTechEx. Transportation currently accounts for approximately 20% of global CO2 emissions, with aviation and maritime decarbonisation requiring significant volumes of low-carbon fuels to meet global net-zero targets.

The year 2025 marked a turning point for sustainable aviation fuel, as binding blending mandates came into force in both the UK and the EU under regulatory frameworks such as ReFuelEU Aviation. These measures created large-scale mandatory demand for SAF, with demand expected to continue rising as decarbonisation regulations expand globally.

SAF can be produced through several technological pathways, with HEFA (Hydroprocessed Esters and Fatty Acids) playing a major role in early market growth. HEFA feedstocks include used cooking oils and animal fats and represent the lowest-cost SAF production route, with pricing relatively close to that of conventional jet fuel.

However, HEFA feedstocks are limited. Beyond 2030, the global SAF market is expected to face a “HEFA tipping point”, where growing demand driven by regulation outpaces available HEFA supply. This is expected to accelerate the transition toward alternative SAF pathways, including alcohol-to-jet, gasification combined with Fischer Tropsch synthesis, and e-SAF. While these technologies are less mature, scaling has already begun. An example is the Freedom Pines Fuels alcohol-to-jet facility, which came online in 2025 with annual output of 9 million gallons of SAF and 1 million gallons of renewable diesel. High production costs remain a key challenge for many emerging pathways.

Beyond aviation, renewable diesel production is also expected to expand. The United States is projected to remain a leading market, supported by multiple policy mechanisms including the Renewable Fuel Standard, the 45Z tax credit, and the California Low Carbon Fuel Standard. Globally, combined renewable diesel and SAF production capacity is forecast to exceed 67 million tonnes per year by 2036, with a compound annual growth rate of 8.1% between 2026 and 2036.

Also read → Slowing SAF production raises concerns as IATA urges policy correction ahead of e-SAF mandates

Renewable methanol production is also expanding rapidly, with several facilities of approximately 100,000 tonnes per annum already under construction. China is expected to emerge as a leading region due to its established methanol market, lower capital expenditure requirements, and access to biomass and green hydrogen resources. Demand for low-carbon methanol is being driven by marine fuel decarbonisation, the chemical sector, and its use as a feedstock for SAF through the methanol-to-jet pathway.

The report identifies policy measures, including SAF mandates in the EU and UK and fiscal incentives in the US, as key drivers of sustainable fuel market growth, alongside pressure from airlines and fleet operators to reduce carbon emissions. At the same time, the sector faces challenges related to energy efficiency, feedstock availability, lengthy project development timelines, financing requirements, and achieving cost parity with conventional fossil fuels.

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