Asia Pacific Sustainable Aviation Fuel Market: Current Analysis and Forecast (2024-2032)

The Asia Pacific Sustainable Aviation Fuel Market is growing at 41.0% in the forecast period, owing to increased environmental regulations and emissions reduction targets. The transportation sector, including Asia Pacific, is a significant source of emissions worldwide. Aviation, encompassing domestic and global flights, constitutes a remarkable portion of transportation emissions, contributing to environmental challenges, weather change, and air pollution. In reaction, governments and regulatory bodies in the Asia Pacific region enforce guidelines and set targets to curb greenhouse gas emissions, improve air quality, and promote sustainable practices. For instance, in the 2023 report, "ASEAN transport sector CO2 Emissions," the global transport forum stated that aviation accounts for 16% of transport-related CO2 emissions in the ASEAN region, higher than the worldwide average. The Asian Development Bank, in its June 2023 publication "Decarbonizing Asia's Aviation Sector," highlighted that Asia Pacific's aviation emissions have grown by 150% since 2000, emphasizing the urgent need for sustainable solutions.

Based on fuel type, the Asia Pacific market is segmented into biofuel and power-to-liquid. The biofuel segment captured the most significant share, and it is anticipated that the same fashion will be followed for the forecast period. Biofuel is produced from biomass renewable resources like agricultural residues, algae, or garbage. These fuels have lower GHG emissions per energy content when combusted compared to conventional fossil fuels, hence having the potential to mitigate the negative impacts of aviation on the environment. Further, biofuels can be mixed with the traditional fossil fuel in different proportions, this enables the operators to gradually transition from fossil fuel, while at the same time experiencing little disruption mainly due to the chain requisites of their operations. Most countries have adopted targets for limiting greenhouse gas emissions for the aviation industry, and biofuels are considered an essential solution. According to the International Energy Agency's "Renewables 2023" report released in June, Asia Pacific is set to account for over 30% of global biofuel production by 2025, with a significant portion destined for the aviation sector. Additionally, the Indian government's SATAT (Sustainable Alternative Towards Affordable Transportation) initiative announced plans to produce 5 billion cubic meters of biogas/bio-CNG annually by 2025, with a portion earmarked for conversion into sustainable aviation fuel.

Based on aircraft type, the market is bifurcated into fixed wings and rotorcrafts. The fixed wings hold a significant market share in 2023 and are expected to showcase the same trend in the forecast period due to fixed-wing aircraft being more commonly used for long-haul flights, which require more fuel and, therefore, more SAF. Furthermore, developing more efficient and environmentally friendly fixed-wing aircraft, such as the Airbus A220 and the Boeing 787 Dreamliner, is also expected to drive the demand for SAF in the fixed-wing market. The regulatory environment for SAF is also more favorable for fixed-wing aircraft. Boeing's "Commercial Market Outlook 2022-2041," released in September 2022, predicts that Asia Pacific will need 17,840 new fixed-wing planes by 2041, accounting for 40% of global demand, driving more sustainable fuel options.

Based on the platform, the Asia Pacific sustainable aviation fuel market is bifurcated into commercial and military aviation. Commercial aviation holds a significant market share in 2023. It is expected to showcase the same trend in the forecast period due to the growing demand for SAF in the commercial aviation sector, the increasing awareness of the environmental impact of traditional fossil fuels, and the need for more sustainable and environmentally friendly alternatives. The International Air Transport Association (IATA), in its June 2023 "Asia-Pacific Air Transport Report," revealed that the region's commercial aviation sector is expected to handle over 3.6 billion passengers annually by 2040, necessitating a shift towards sustainable fuels. In its Sustainable Development Report, the Cathay Pacific Group committed to using SAF for 10% of its total fuel consumption by 2030, setting a new benchmark for commercial airlines in the region.

For a better understanding of the market of the Asia Pacific sustainable aviation fuel market, the market is analyzed based on its presence in Asia Pacific (China, Japan, South Korea, India, and the Rest of Asia Pacific). China dominated the market in 2023 and is expected to behave similarly in the forecast period. This dominance reflects China's massive aviation market, its ambitious environmental targets, and its government's strong support for technological innovation in sustainable aviation. Additionally, the Commercial Aircraft Corporation of China (COMAC), announced that its C919 narrow-body airliner, set to compete with Boeing and Airbus models, has been designed to be fully compatible with sustainable aviation fuels, showcasing China's commitment to cleaner aviation technology. Furthermore, significant collaborations and partnerships in the country to produce SAF are also pushing the market positively and, hence, a foreseeable future. For instance, in March 2024, TotalEnergies and China Petroleum and Chemical Corporation ("SINOPEC") signed a Heads of Agreement (HoA) to jointly develop a Sustainable Aviation Fuel (SAF) production unit at a SINOPEC refinery in China. The planned unit, jointly owned by SINOPEC and TotalEnergies, will have the capacity to produce 230,000 tons of SAF per year and will process local waste or residues from the circular economy (cooking oils and animal fats). SINOPEC has developed its own SAF production technology called SRJET. TotalEnergies, already one of Europe's leading SAF producers, will bring its experience and expertise to the technical, operational, and distribution fields.

Some of the major players operating in the market include Neste, Fulcrum BioEnergy, World Energy, LLC, TotalEnergies, Gevo, Avfuel Corporation, Aemetis, Inc., Preem AB, SkyNRG, Northwest Advanced Biofuels, LLC.