Supply-side and demand-side policies will need to mutually reinforce each other to scale up SAF production and demand
Policies to support SAF consumption and boost growth are needed to make SAF more widely available and economically viable.
On the demand side, blending mandates provide clear long-term demand signals beyond offtake agreements. Low-carbon fuel standards provide less clarity on required volumes, but this is balanced by providing a clear regulatory framework to reduce the lifecycle emissions of SAF. By combining blending mandates with GHG emissions and sustainability criteria, regulatory frameworks such as the proposed ReFuelEU Aviation aim to achieve market certainty at the same time as incentivising uptake of less mature and higher cost SAF production pathways in the mid- to long term.
Funding and financial de-risking will be needed to promote continued innovation around sustainable production processes including novel feedstocks (wastes, residues, marginal land, double cropping) and support the leap from demonstration to commercial plants. This will also be needed to drive investment at all stages of research, and to enable power-to-liquids jet kerosene to scale up rapidly.
Both supply and demand of SAF are highly concentrated in advanced economies today. Meeting the growing demand for air travel in emerging and developing economies will require technical assistance and capacity building to accelerate the availability and use of SAF. Such support can help emerging market and developing economies to leverage domestic natural resource endowments such as biomass, solar and wind, and thereby scale up high value-add industries in the clean energy economy.