How U.S. Policy and Industry Failures Are Slowing Sustainable Aviation Fuel Deployment | Shale Magazine

Sustainable aviation fuels (SAF) are clean fuels, made from sources such as used cooking oil, agricultural residues and other waste, that can be used to power aircraft in place of or alongside conventional jet fuel. Governments worldwide have been investing heavily in research and development into SAF in a bid to decarbonize one of the hardest-to-abate industries – aviation. However, recent moves by the Trump administration threaten to stall progress on U.S. innovation and the production of SAF. 

Why We Need SAF and How to Accelerate Deployment

Air traffic is expected to double by 2042, from around 12 billion passengers a year at present. Aviation contributed 2.5% of global energy-related CO2 emissions in 2023, having grown faster between 2000 and 2019 than rail, road, or shipping, according to the International Energy Agency (IEA). 

There is a range of SAFs currently being used or trialed in various aircraft. SAF can reduce carbon emissions by up to 80% on a lifecycle basis. While other alternative green aviation solutions are being developed, such as batteries and hydrogen fuel cells, SAF appears to be the most viable in the mid-term, with several airlines already blending SAF with conventional jet fuel to reduce emissions. 

The global SAF market was valued at $2.06 billion in 2025 and is expected to grow at a compound annual growth rate of 65.5% over the next five years to reach $25.62 billion by 2030. Production is forecast to increase from 0.30 billion gallons in 2025 to 3.68 billion gallons in 2030. 

However, many companies are deterred from using SAF, instead of jet fuel, due to the high price tag, which is expected to remain between two and three times more costly through 2030. Scaling up production would likely drive down cost, but demand remains tepid at present due to cost. 

The CEO of Dubai Airports, Paul Griffiths, said, “The global jet fuel market is worth around $254 billion per year, with SAF representing just 0.7% of total fuel production.” Meanwhile, if SAF production doubles every two years, it would take over seven and a half years for 10% of total jet fuel to come from sustainable sources, according to Griffiths. He believes, “Industry and governments have got to work together to create a level playing field of investment that doesn’t incentivize poor behavior.” Griffiths recommends introducing a levy on aviation fuel or ticket prices to invest in SAF innovation and production. 

Progress before Budget Cuts

In the United States, investment into SAF research and development has increased in recent years thanks to favorable climate policies and financial incentives introduced under the Biden Administration’s 2022 Inflation Reduction Act (IRA). 

Under Biden, the U.S. aimed to be producing 3 billion gallons of SAF a year by 2030, with the aim of scaling up output to supply all commercial flights by 2050. However, the recent rollback of a wide range of climate and energy-related incentives under the Trump administration is making achieving this target seem increasingly unlikely. 

In June, the U.S. Senate tax-writing committee proposed cutting the 45Z tax credit’s additional subsidy for SAFs. Political moves such as these have created greater uncertainty across the alternative fuel industry and may deter investors from funding projects. 

Several U.S. startups focusing on SAF have reported project delays in recent months, as well as a loss of interest from investors. If the sector cannot sustain political backing, developing the SAF needed to support aviation decarbonization aims will be an uphill battle. In addition, greater deregulation under the Trump administration may make aviation companies less eager to invest in emissions reduction efforts. 

While domestic SAF operations may falter, the industry is expected to continue growing on a global scale, as governments and airlines strive to decarbonize. SAF production in Europe and Asia will grow significantly in the coming decades, in countries such as France, the Netherlands, and Japan, supported by favorable government policies. 

Industry Failings

It is not just U.S. policy that is limiting SAF progress, as several industry failings have been seen in recent years, which undermine many of the global SAF targets for the coming decades. 

Several airlines have been accused of greenwashing by overstating their mid-term SAF targets without the production pipeline to back it up. The International Air Transport Association (IATA) expects SAF will contribute just 0.7% of total jet fuel this year, up from 0.3% in 2024. The IATA set the goal of net zero emissions by 2050, which would require airlines to increase SAF to 118 billion gallons a year, at more than 300 times the current production rate. 

While airlines have announced 165 SAF projects over the past 12 years, only 36 have come to fruition, according to a report by Reuters. If all the pending projects announced by airlines reached their maximum potential, it would only add 12 billion gallons of SAF production, the Reuters analysis found, which is around 10% of what’s needed to achieve the net zero target. This suggests that greater collaborative efforts need to be made by political actors, fuel companies and the aviation sector, on an international level, to enhance SAF production and better regulate the sector to encourage uptake. 

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