Global sustainable aviation fuel (SAF) production is expected to increase to 97,000 barrels per day by 2028, up from a projected 60,000 barrels per day in 2026, according to forecasts from S&P Global Energy Horizons. However, high production costs, uncertain regulatory frameworks and limited supply continue to constrain the fuel’s wider adoption across the aviation industry.
The forecast reported puts global SAF production at 72,000 barrels per day in 2027 before reaching the 2028 target. Despite this projected growth, SAF remains significantly more expensive than conventional jet fuel, creating a challenge for airlines seeking to reduce emissions without increasing operating costs.
SAF Prices Remain Above Conventional Jet Fuel
According to Platts, part of S&P Global Energy, hydroprocessed esters and fatty acids (HEFA)-based SAF was priced at $2,498.75 per metric tonne on a CIF Northwest Europe basis on October 19, 2026. This represented a 52% premium over conventional jet fuel.
The price differential has narrowed considerably in recent months. On February 27, before the start of the Iran-Israel conflict, SAF was reportedly 176% more expensive than conventional aviation fuel. By October 19, the premium had fallen to 52%.
Rising conventional jet fuel prices amid higher oil prices have contributed to the narrowing gap. However, the reduction in the relative price difference does not necessarily mean SAF has become more affordable in absolute terms.
The persistent cost premium remains a significant obstacle to adoption, particularly for airlines operating on narrow profit margins and facing pressure from higher fuel expenses.
Dubai Airports CEO Calls for Supply-Side Incentives
Dubai Airports CEO Paul Griffiths told Platts that SAF accounts for approximately 1% of global aviation fuel consumption, against total aviation fuel demand of 7–8 million barrels per day.
Griffiths argued that policymakers and industry stakeholders should prioritise expanding production capacity rather than focusing primarily on stimulating demand.
“The only way forward is to incentivize the supply of SAF. Don’t start with demand, start with supply,” he said, highlighting the shortage of available SAF relative to global aviation fuel requirements.
He said additional investment in production infrastructure would be essential to achieving economies of scale and reducing costs. One option could involve establishing a financial consortium to mobilise capital for large-scale SAF production facilities.
The industry faces a circular investment challenge: producers are reluctant to expand capacity without predictable demand, while airlines are hesitant to commit to larger purchases while SAF remains substantially more expensive than conventional jet fuel.
Airport-Level Blending Could Distribute SAF Costs
Griffiths identified blending SAF with conventional aviation fuel directly at airports as one possible mechanism for distributing the additional cost across the fuel supply chain.
Under the approach he described, a blend containing 10% SAF, with the sustainable fuel costing twice as much as conventional jet fuel, would spread the premium across the overall fuel supply rather than concentrating it on individual SAF purchases.
The approach could reduce the additional cost attributed to each unit of fuel consumed by airlines, although the overall cost of the blend would still depend on fuel prices, blending proportions and the applicable supply arrangements.
Implementing the model would require coordination among fuel suppliers operating at individual airports. SAF would need to be incorporated into shared refuelling infrastructure rather than supplied separately to individual aircraft.
Griffiths acknowledged that securing agreement across competing suppliers could be difficult because fuel costs directly affect airline competitiveness.
He identified Singapore, London Heathrow and Amsterdam Schiphol as airports that have made progress in integrating SAF into their supply chains. Measures used at these airports include passenger-ticket surcharges, government blending requirements and sustainability-related obligations.
However, he questioned whether passengers’ willingness to choose airlines with stronger environmental commitments would be sufficient to drive adoption without broader policy and financial support.
Regulatory Differences Create Investment Uncertainty
Fragmented government policies remain another barrier to expanding SAF production. According to Griffiths, the United States and European Union have adopted different approaches to encouraging the market.
He described the US approach as focusing on supply-side production incentives without mandatory consumption requirements, while the EU has established mandatory SAF-use rules but has yet to achieve full implementation.
Griffiths argued that stronger and more coordinated regulatory requirements would help provide the long-term demand certainty needed to attract investment.
“Unless more governments introduce this as a mandatory requirement, there will be virtually no incentive to invest in sustainable aviation fuel production,” he said.
He also warned that regulatory and economic uncertainty has affected airline commitments. Some airlines that previously announced SAF purchasing programmes and carbon-offset initiatives have reportedly abandoned or scaled back those plans after concluding that they were not economically viable.
Increasing the proportion of SAF in aviation fuel blends could create further financial pressure. Griffiths warned that a 30% SAF share could result in additional fuel costs large enough to undermine the competitiveness of airlines absorbing the expense.
High Oil Prices Pose a Further Risk
The outlook for SAF adoption is also exposed to volatility in conventional fuel markets. Griffiths said a prolonged period of high oil prices could increase air travel costs and weaken passenger demand.
Although higher conventional jet fuel prices can narrow SAF’s relative price premium, they can also raise airlines’ overall operating expenses. The resulting pressure may make it more difficult for carriers to absorb the additional costs associated with sustainable fuels.
The industry’s ability to expand SAF use will therefore depend on more than production growth alone. Lower production costs, predictable regulations, long-term investment and workable mechanisms for sharing additional expenses will all influence the pace of adoption.
Bioenergy Business Analysis
S&P Global Energy Horizons’ forecast points to continued growth in SAF production through 2028, but the projected increase must be considered against the scale of the aviation fuel market. Even at 97,000 barrels per day, SAF production would remain small relative to the reported global aviation fuel consumption of 7–8 million barrels per day.
The central challenge is converting production growth into commercially viable, sustained demand. Supply-side incentives could help producers secure financing and expand capacity, while blending mandates and coordinated airport infrastructure could create more predictable routes to market. However, these mechanisms would need to account for the additional costs imposed on airlines and the potential effects on ticket prices.
The narrowing SAF price premium is also an incomplete measure of progress. Because conventional jet fuel prices have risen, the relative gap can shrink even when the absolute cost of aviation fuel remains high. Policymakers and investors will need to assess production costs, available volumes and long-term offtake commitments together.
For the SAF market, the key indicators to watch through 2028 will be whether announced capacity translates into actual output, whether producers secure long-term buyers and whether regulatory frameworks provide sufficient certainty for investment. Without progress on these fronts, projected production growth may not translate into widespread adoption across the global aviation sector.
