Global Electro-Sustainable Aviation Fuel (e-SAF) Market Outlook, 2031

The global electro-sustainable aviation fuel industry, commonly called e-SAF, e-kerosene or power-to-liquid jet fuel, covers synthetic aviation fuels made from hydrogen produced by electrolysis using renewable or low-carbon electricity, combined with carbon dioxide captured from biogenic sources, industrial flue gases or directly from the air. The hydrogen and carbon are converted into hydrocarbons mainly through two routes: the Fischer-Tropsch pathway, in which carbon dioxide is first converted to carbon monoxide through a reverse water-gas shift reaction and then synthesised into long-chain hydrocarbons that are upgraded to jet fuel, and the methanol-to-jet pathway, in which renewable methanol is converted to aviation fuel through dehydration, oligomerisation and hydrogenation. e-SAF is a drop-in fuel that can be blended with conventional kerosene and used in existing aircraft and airport infrastructure, and it can reduce lifecycle greenhouse gas emissions by 70% to more than 90% compared with fossil jet fuel. Unlike bio-based SAF made from used cooking oil, animal fats or agricultural residues, e-SAF is not limited by biomass supply, making it essential for long-term aviation decarbonisation. The value chain includes renewable power developers, electrolyser makers such as Siemens Energy, Nel, Thyssenkrupp Nucera, Sunfire and Topsoe, carbon capture providers such as Climeworks and 1PointFive, technology licensors including Topsoe, Johnson Matthey, Sasol, Honeywell UOP, Axens and Infinium, project developers such as Infinium, HIF Global, Norsk e-Fuel, Arcadia eFuels, Zaffra, Concrete Chemicals, INERATEC, Synhelion, Twelve and Ørsted's former FlagshipONE, and airline and fuel supplier offtakers.

e-SAF demand is being created mainly by regulation. The European Union's ReFuelEU Aviation regulation requires fuel suppliers at EU airports to supply at least 2% SAF from 2025, rising to 6% in 2030, 20% in 2035 and 70% in 2050, with a dedicated synthetic fuel sub-mandate of 1.2% in 2030 and 2031, rising to 35% in 2050. The UK SAF Mandate, which took effect in January 2025, requires 10% SAF by 2030 and 22% by 2040, with a power-to-liquid obligation starting in 2028 and reaching 0.5% in 2030. In its first year, ReFuelEU was exceeded, with about 1.1 million tonnes of SAF supplied at EU airports in 2025, equal to 2.8% of aviation fuel, according to the European Union Aviation Safety Agency's annual report published in September 2026. However, almost all of this was bio-based SAF, and EASA identified around 60 e-SAF projects in development in Europe, none of which had reached a final investment decision. High production costs, estimated at several times the price of fossil kerosene, uncertain long-term offtake, expensive renewable electricity and hydrogen, and debate over whether the EU might weaken the mandate have delayed investments, and industry groups warned in 2026 that projects must take investment decisions soon to meet 2030 obligations. Public support is growing: Concrete Chemicals, backed by Zaffra and ENERTRAG, secured €350 million in German state aid for a 30,000 tonne a year e-SAF plant in Schwedt, and several projects in the United States, Norway, Denmark, Chile, the Middle East and Central Asia are advancing, including Infinium's Project Roadrunner in Texas.

Market Dynamics

Market Drivers
• Binding Mandates in Europe and the UK:ReFuelEU Aviation's synthetic fuel sub-mandate of 1.2% in 2030, rising steeply to 35% by 2050, and the UK's power-to-liquid obligation starting in 2028 create legally binding demand that cannot be met by bio-based fuels. Penalties for non-compliance in the EU are set at twice the price difference between SAF and fossil fuel, giving fuel suppliers a strong incentive to secure e-SAF supply. These mandates underpin offtake agreements and project financing.
• Feedstock Limits of Bio-Based SAF and Net Zero Commitments:Bio-based SAF relies on limited supplies of waste oils, fats and residues, and competition for these feedstocks will cap their contribution, making power-to-liquid fuels essential to reach high SAF shares. Airlines have committed to net zero emissions by 2050 through IATA, and ICAO adopted a goal of a 5% reduction in carbon intensity through cleaner fuels by 2030. Corporate travel buyers and cargo customers purchase SAF certificates to reduce their Scope 3 emissions.

Market Challenges
• High Production Costs and Energy Requirements:e-SAF currently costs several times more than fossil jet fuel because it requires large amounts of renewable electricity, costly electrolysers, carbon capture and complex synthesis plants. Producing one tonne of e-SAF requires roughly 20 to 30 megawatt hours of electricity, so access to cheap, abundant renewable power is critical. Costs are expected to fall with scale, but early projects face high capital costs and financing risk.
• Investment Uncertainty and Slow Final Investment Decisions:Despite dozens of announced projects, very few large e-SAF plants have reached final investment decisions, because developers need long-term offtake contracts at high prices, certainty that mandates will remain in place and clear rules on eligible carbon sources and renewable electricity. Debates in the EU about possible simplification or delay of green regulations, and weak price signals, have made airlines and investors cautious, risking a supply shortfall in 2030.



Market Trends
• Public Funding, Contracts for Difference and Book-and-Claim:Governments are introducing support mechanisms to close the cost gap, including state aid such as Germany's funding for the Schwedt project, EU Innovation Fund grants, the European Hydrogen Bank, the UK's proposed revenue certainty mechanism for SAF, and US tax credits. Book-and-claim systems allow airlines and corporations to buy the environmental attributes of e-SAF produced elsewhere, helping early projects find buyers, while airlines and fuel suppliers sign long-term offtake agreements with project developers.
• Global Production Hubs with Low-Cost Renewables:Developers are locating e-SAF plants in regions with abundant, low-cost solar and wind power and access to carbon dioxide, including the Nordic countries, Spain, Portugal, the United States, Chile, Brazil, Australia, the Middle East, Morocco and Central Asia. Projects such as HIF Global's e-fuels plants in Chile and the United States and planned facilities in Uzbekistan aim to export e-SAF to Europe to meet mandates, supported by certification systems.

Segment Analysis

Fischer-Tropsch power-to-liquid is the most established e-SAF production pathway, while methanol-to-jet is a fast-developing alternative with growing project interest. The Fischer-Tropsch pathway converts captured carbon dioxide and green hydrogen into synthesis gas through a reverse water-gas shift reaction or co-electrolysis, then synthesises hydrocarbons that are hydrocracked and fractionated into jet fuel, diesel and naphtha. Fischer-Tropsch synthetic paraffinic kerosene is already approved under ASTM D7566 for blending up to 50% with conventional jet fuel, and it is the route chosen by most European projects, including those by Norsk e-Fuel, INERATEC, Arcadia eFuels and Concrete Chemicals, using technology from Sasol, Topsoe, Johnson Matthey and others. The methanol-to-jet pathway first produces e-methanol from hydrogen and carbon dioxide, then converts methanol into jet fuel through olefin synthesis, oligomerisation and hydrogenation, and it benefits from the growing e-methanol industry for shipping; ASTM approval for methanol-to-jet fuels is being pursued, and ExxonMobil, Honeywell UOP and Topsoe offer technologies. Other routes include co-electrolysis, in which steam and carbon dioxide are electrolysed together in solid oxide electrolysers by companies such as Sunfire and Topsoe, direct carbon dioxide electrolysis to carbon monoxide by Twelve, and solar thermochemical fuel production by Synhelion. Ethanol-to-jet using electrochemically produced ethanol is also being explored. The choice of pathway affects product slate, efficiency, cost and certification timelines.

Biogenic carbon dioxide is currently the main carbon source for e-SAF projects, while direct air capture is expected to grow as costs fall and regulations tighten. Biogenic carbon dioxide, captured from bioethanol plants, biogas upgrading facilities, pulp and paper mills, waste-to-energy plants and biomass power stations, is the preferred carbon source for most early e-SAF projects because it is relatively concentrated, cheaper to capture and qualifies under EU rules for renewable fuels of non-biological origin. Industrial point-source carbon dioxide from cement, steel, chemical and refinery plants is also used, but under EU rules, fossil-derived carbon dioxide will only be eligible until 2040 for industrial sources and 2035 for power generation, encouraging a shift to biogenic and atmospheric carbon. Direct air capture, which removes carbon dioxide from ambient air, offers unlimited supply and is location-flexible, but it is currently more expensive; companies such as Climeworks, 1PointFive and Heirloom supply projects, and some developers plan to integrate direct air capture into e-SAF plants in the longer term. Carbon dioxide from fermentation processes such as ethanol production is especially valuable because of its high purity. Securing long-term carbon dioxide supply agreements is a critical step for project developers, and carbon transport infrastructure is being developed in the North Sea region and the United States.

Commercial aviation accounts for the vast majority of expected e-SAF demand, while cargo, business aviation and military users form important early adopter segments. Commercial passenger airlines are the largest source of e-SAF demand, driven by mandates on fuel supplied at EU and UK airports and by voluntary commitments. Airlines such as Lufthansa, Air France-KLM, IAG, SAS, Finnair, easyJet, Ryanair, United, Delta, Alaska and Southwest have signed offtake agreements or invested in e-SAF developers, and some have committed to use e-SAF as a share of their fuel by 2030. Cargo and logistics airlines, including DHL, FedEx, UPS and Amazon Air, use SAF to meet customer demand for lower-emission shipping and have signed agreements with e-SAF producers. Business and general aviation operators, including private jet companies such as NetJets and airports serving business aviation, are early adopters because customers are willing to pay a premium. Military aviation, including the US Air Force and European air forces, is interested in synthetic fuels for energy security and supply resilience, since e-SAF can be produced domestically. Corporate buyers purchase SAF certificates through book-and-claim schemes to reduce business travel emissions, including technology companies, banks and consulting firms. Helicopters, drones and advanced air mobility are smaller segments. Airports and fuel suppliers, including Shell, TotalEnergies, Neste, bp and Repsol, act as intermediaries meeting blending obligations.

Blending mandates and compliance markets drive most e-SAF demand, while voluntary corporate purchases and offtake agreements support early project financing. Compliance demand under ReFuelEU Aviation and the UK SAF Mandate is the main driver of e-SAF markets, as fuel suppliers must meet synthetic fuel sub-targets or pay penalties, and they are expected to pay premiums for e-SAF certificates. The EU Emissions Trading System provides airlines with free allowances to cover part of the price difference for SAF use through its SAF allowances scheme, supporting uptake. Voluntary demand from airlines and their corporate customers, including scope 3 emissions reduction programmes and green fare options for passengers, adds early demand. Long-term offtake agreements between airlines, fuel suppliers and producers, often covering ten years or more, are essential for project financing, and several airlines have signed agreements with projects in Europe and the United States. Government procurement, including military purchases, and public funding mechanisms such as contracts for difference and hydrogen auctions support demand. In the United States, the Inflation Reduction Act's clean fuel production credit and state low carbon fuel standards in California, Oregon and Washington provide incentives, although changes to federal clean energy policy in 2025 reduced some support. Japan, South Korea, Singapore and India are introducing SAF targets that could include synthetic fuels.

Regional Analysis

Europe leads the e-SAF market because of binding synthetic fuel sub-mandates under ReFuelEU Aviation and the UK SAF Mandate, the largest pipeline of projects and strong public funding, while North America, the Middle East, Latin America and Asia-Pacific are developing production capacity. Europe is the leading region for e-SAF, driven by ReFuelEU Aviation's synthetic fuel sub-mandate from 2030 and the UK's power-to-liquid obligation from 2028. Around 60 e-SAF projects are in development across Europe, according to EASA, concentrated in the Nordic countries, Germany, the Netherlands, Spain, Portugal and France, but none had reached a final investment decision by September 2026, prompting calls for stronger public support. Germany's €350 million aid for the Schwedt project, Norway's Norsk e-Fuel projects, Denmark's power-to-X initiatives and Spain's renewable hydrogen projects are among the most advanced. North America has significant e-SAF activity, led by the United States, where Infinium is building Project Roadrunner in Texas with support from Brookfield and offtake from American Airlines and others, HIF Global is developing e-fuels in Texas, and Twelve operates a demonstration plant in Washington state; policy changes in 2025 reduced some federal incentives, while state programmes remain. Latin America offers low-cost renewables, with HIF Global's Haru Oni pilot in Chile and projects in Brazil and Uruguay targeting exports. The Middle East, including Oman, the UAE and Saudi Arabia, and Central Asia, including Uzbekistan's planned Allied Biofuels complex with about 4 GW of solar power, aim to become export hubs. Asia-Pacific is developing through Japan's and Singapore's SAF policies, Australia's renewable hydrogen projects and China's growing e-methanol capacity.

Considered in this report

Historic Year: 2020
Base Year: 2025
Estimated Year: 2026
Forecast Year: 2031

Aspects covered in this report

Global Electro-Sustainable Aviation Fuel (e-SAF) Market with its value and forecast along with its segments
Various drivers and challenges
Ongoing trends and developments
Top profiled companies
Strategic recommendation

By Production Pathway
• Fischer-Tropsch Power-to-Liquid
• Methanol-to-Jet
• Co-Electrolysis
• Other Pathways

By Carbon Source
• Biogenic Carbon Dioxide
• Industrial Point-Source Carbon Dioxide
• Direct Air Capture

By End User
• Commercial Airlines
• Cargo and Logistics Airlines
• Business and General Aviation
• Military Aviation

By Demand Driver
• Regulatory Mandates
• Voluntary Corporate Purchases
• Long-Term Offtake Agreements
• Government Procurement