The aviation industry is targeting net-zero CO2 emissions by 2050, a goal which deserves critical scrutiny. The industry has a history of making and breaking promises, and the 2050 timeline is a double-edged sword – distant enough for current airline CEOs to be enjoying their retirements, yet alarmingly close considering the long lead times for new SAF production facilities.
Unlike “zero”, which would mean just what it says on the tin, “net-zero” means aircraft will still be emitting CO2 (and other pollutants) but these residual CO2 emissions will be balanced by offsets or atmospheric Carbon Dioxide Reduction (CDR). The most significant lever in reducing these residual emissions is the use of SAF.
SAF comes in two primary forms: bioSAF, made from waste materials or crops, and eSAF, produced using electricity. However, neither option is without its challenges. BioSAF from crops risks competing with food production for land use (resulting in very strict rules on eligible feedstocks in the EU’s RED III, while eSAF, like other e-fuels, demands vast amounts of still-scarce renewable electricity for water electrolysis, CO2 capture, and fuel synthesis.
SAF comes in two primary forms: bioSAF, made from waste materials or crops, and eSAF, produced using electricity. However, neither option is without its challenges. BioSAF from crops risks competing with food production for land use (resulting in very strict rules on eligible feedstocks in the EU’s RED III, while eSAF, like other e-fuels, demands vast amounts of still-scarce renewable electricity for water electrolysis, CO2 capture, and fuel synthesis.
And even after all this, it’s crucial to understand that SAF is not zero-emission. Conventional jet fuel, when burnt in an aircraft engine, releases fossil carbon into the atmosphere that had previously been trapped underground for millions of years. SAF, when burnt, produces the same amount of CO2, but this carbon was recently in the atmosphere before being captured by plants or industrial processes, so the net increase in atmospheric carbon is far lower (typically accounted for by emissions from agriculture, refining, and fuel transport).
Indeed, when considering the entire “well-to-wheel” lifecycle, SAF can reduce carbon emissions by approximately 80% compared to fossil fuels – not perfect, but a big step forward. Despite its limitations, SAF remains one of the most potent levers available for aviation decarbonisation, alongside “the lever that dare not speak its name”: demand management, or lower air traffic growth.
The EU’s RefuelEU-Aviation imposes a blending mandate of 2% SAF from 1 January 2025, rising in large steps to 6% in 2030, 20% in 2035, and so on, ultimately reaching 70% in 2050 (in practice, a graduated increase of a couple of percent every year would have been preferable to these big jumps). Your flight from a European airport today therefore, probably used a 2% SAF blend, reducing its overall CO2 emissions by (2% x 80%) or some 1.6% compared with fossil fuel. A start, but only a start. How can we scale up SAF production quickly enough?
SAF project developers need long-term revenue guarantees to unlock project financing, but most airlines will not contemplate long-term fuel purchase commitments. Other market actors, are prepared to enter into multi-year offtake agreements, but this process remains onerous as the market is not yet mature or liquid enough to offer price indices on which long-term pricing can be based – and unlike Brent Crude or Home Heating Oil, SAF is not a uniform, fungible, product but a range of fuels, all certified safe for use in aircraft engines, but produced from different feedstocks with different levels of greenhouse gas reduction.
But there’s another group of players in the SAF market, whose influence may be decisive in triggering its scale-up: corporates who want to compensate for their carbon emissions. A key market demand signal – and driver of increased SAF production – is the willingness of corporate customers to acquire SAF-derived Scope 3 credits to compensate for their business travel emissions. Under the Greenhouse Gas Protocol, an airline will count the emissions from its flights under “Scope 1” (own activity), but a company whose staff travel on these flights will simultaneously count their share of the flights’ emissions under “Scope 3” (indirect emissions in the company’s value chain).
In recent years, more and more companies have been compensating for their emissions, for example by purchasing nature-based offsets, but the opportunity to add SAF-based Scope 3 credits to a carbon credit portfolio can be very attractive: the quantity of carbon saved is known, precise, and not dependent on uncertain future circumstances; use of a SAF-based credit to compensate for business travel emissions counts as insetting (within-value-chain compensation) rather than offsetting (compensation outside the value chain, for example with nature-based offsets); and bringing additional funding into the SAF market through the sale of Scope 3 carbon credits has the effect of stimulating future production increases.
Corporate purchases of Scope 3 credits are likely to give a significant impetus to production growth, but will not be sufficient by themselves. SAF blending mandates in the EU and elsewhere will drive demand, as will carbon pricing on fossil jet fuel to narrow the price gap between conventional fuel and SAF. Multiple stakeholder groups across European aviation have called for enhanced flexibility mechanisms to create a single SAF market across Europe and to avoid the need to transport SAF to all airports (at additional cost, and causing additional transport emissions). A so-called “Book and Claim” mechanism, which separates the fuel from its Scope 1 and Scope 3 attributes, can allow an aircraft operator to pay for SAF and receive the corresponding Scope 1 certificate, even if the physical fuel is loaded into another operator’s aircraft at a different airport. Rising atmospheric CO2 levels are by definition a global problem; the environmental benefits of replacing fossil fuel with SAF don’t depend on where the SAF is used. In late February 2025, the European Commission released a long-overdue report into possible enhancements to SAF flexibility mechanisms under RefuelEU-Aviation, which sets out a number of options but which, disappointingly for many stakeholders but perhaps unsurprisingly, recommends that the market be allowed to mature and that further studies be carried out before any changes are made to the flexibility mechanism. The next revision of RefuelEU-Aviation is not due until 2027, and this is now unlikely to see the inclusion of a Book and Claim system.
What is the likely way forward? SAF production in Europe and for Europe will continue to grow, driven by the RefuelEU-Aviation mandate. The resulting market inefficiencies and deadweight costs for airlines will not be eliminated any time soon, if ever. The growth in SAF, even if accelerated by corporate Scope 3 purchases, is likely to be insufficient to keep the growing aviation industry on a credible trajectory to net zero by 2050, so some form of demand management measures are likely to emerge, whether local (airport capacity restrictions), national (taxation, or inclusion of international aviation in national carbon budgets), or pan-European (regulatory measures, for example in the forthcoming review of the Air Services Regulation). More turbulence lies ahead, not only for SAF but for the wider aviation industry.
About the author.
Patrick Edmond is the Chief Marketing Officer at Future Energy Global & Green Mobility Magazine Editorial Board Member.
Patrick holds an MS in Computer Engineering from Carnegie Mellon University, an MSc in Air Transport Management from Cranfield University, and an MBA from Purdue University.
Before joining Future Energy Global, Patrick led the commercial and strategy functions for a numbr of airlines and airports, and founded the aviation strategy and sustainability consultancy Altair Advisory. He is based in Ireland.
