Airline Industry’s SAF Push Stalls: High Costs, Low Supply, and a Growing Gap to Net Zero
After more than a decade of promises, most sustainable aviation fuel projects are grounded before takeoff.
August 11 EST: Twelve years, 165 announcements, and barely three dozen actual projects. That’s the scoreboard for the airline industry’s push into sustainable aviation fuel a figure that would get a CEO grilled on an earnings call.
The numbers tell the story: most of those high-profile SAF ventures haven’t delivered a single gallon. Some ran out of money, some ran out of patience, and some were never more than a marketing slide backed by a carbon credit purchase.
Supply Chains That Never Took Off
Take World Energy’s Paramount plant in California. It was pitched as a cornerstone of U.S. green jet fuel production. Then the budget blew up, demand didn’t materialize, and the site went dark along with the jobs it supported. It’s not an isolated case. Reuters’ review found similar fates across multiple continents, from Europe’s early-stage biofuel refineries to U.S. projects that couldn’t get past permitting.
Right now, SAF is a rounding error in the fuel supply chain 0.7% of global jet fuel use, up slightly from 0.3% last year. For the industry to hit its 2050 net-zero goal, output would need to jump from millions to 118 billion gallons a year. That’s the equivalent of turning every craft brewery in America into an oil refinery, and doing it in just 25 years.
Economics That Don’t Add Up
Airlines know the problem: SAF is expensive. At three to five times the cost of conventional jet fuel, it’s a margin killer unless you’ve got government incentives to backstop the difference.
In the EU, where mandates and penalties are in place, executives are already warning targets may be out of reach. In the U.S., the mix of tax credits and state-level programs isn’t enough to create real certainty. Without that certainty, finance teams won’t sign off on long-term supply contracts especially in a business where a penny-per-gallon swing can make or break a quarter.
ESG Rhetoric Meets Quarterly Reality
The industry is under mounting pressure from investors and regulators to show credible carbon reduction plans. SAF is supposed to be the centerpiece of that strategy, but the gap between aspiration and capacity is widening.
Some carriers are now hedging their bets, shifting resources into carbon offsets a move that satisfies a balance sheet faster than it satisfies climate scientists. Others are leaning into operational efficiencies, lighter airframes, or future aircraft tech. Those efforts help at the margins but don’t replace the heavy lift SAF was meant to carry.
The Risk of a Hard Landing
For an industry already wrestling with thin margins, volatile fuel prices, and shifting travel demand, the SAF shortfall isn’t just an environmental problem it’s a strategic one. If production doesn’t scale, the costs of compliance, whether through offsets or penalties, will hit operating income directly.
In boardrooms, that’s already changing the conversation. What was once pitched as a growth story—“We’ll lead the green aviation revolution” —is starting to sound more like risk management. And without a breakthrough in cost or supply, SAF could become the industry’s most expensive promise.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
