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By Marleen Kaesebier
(Reuters) - The sustainable aviation fuel (SAF) industry is falling short of its 2030 targets with production not ramping up quickly enough, Boston Consulting Group (BCG) found in a report published on Thursday.
European airlines are this year expected to meet a mandate of 2% SAF use in their jet fuel, with that set to rise to 6% by 2030. But many have lamented the high cost of the fuel, which is typically three to five times more expensive than traditional jet fuel.
The report found that airlines and airports are investing only 1% to 3% of revenue or budget allocation to SAF, with high production costs and fuel prices remaining the major challenges to adoption.
"We are going in the positive direction, but clearly not at the speed we need," BCG Managing Director and Partner Pelayo Losada said of his findings in the co-authored report that surveyed more than 500 executives at about 200 aviation-related companies.
"Despite continuing to scale the availability of sustainable aviation fuel, and we see that trend very clearly, there is a slowdown in the development of projects and even bigger gaps to some of the commitments that some of the companies have made," Losada said.
Reuters reported last month that low consumption and a lack of policy guidance have led to delays of some SAF projects in China.
While the global aviation industry is aiming to reach net-zero emissions by 2050 and some countries have SAF mandates in place, the fuel accounted for only about 0.3% of global jet fuel production in 2024.
BCG's report highlights that while SAF supply increased 1,150% worldwide over the last three years, announcements for new production facilities fell by 50% to 70% from 2022 to 2023.
BCG says this was largely due to economic uncertainty and higher energy and operating costs.
It now projects supply to fall 30% to 45% short of commercial aviation's 2030 targets.
Losada said many industry participants had adopted a mentality of "others will solve the problems for me", and he called for cross-industry collaboration.
(Reporting by Marleen Kaesebier and Joanna Plucinska; Editing by Jamie Freed)
