The renewable or bio jet fuel market is poised to grow at highest pace owing to growing production of sustainable aviation fuels across major aviation markets.
Renewable or bio jet fuel refers to aviation fuels that are derived from hydrotreated fatty acid esters and fatty acids (HFFFAs), which are produced from camelina, jatropha, algae and other biomass feedstocks. It has almost similar properties as conventional jet fuel and can be seamlessly used to power aircraft. Renewable jet fuel provides significant reduction in greenhouse gas emissions over its lifecycle as compared to conventional jet fuel which is driving its adoption. It has emerged as one of the viable solutions to decarbonize aviation sector.
The Global renewable or bio jet fuel market is estimated to be valued at US$ 299.4 Mn in 2024 and is expected to exhibit a CAGR of 3.4% over the forecast period of 2024 to 2031.
Key Takeaways
Key players operating in the renewable or bio jet fuel market are Abbott Laboratories, Aurobindo Pharma USA, Boehringer Ingelheim International GmbH, Cipla Limited, Hikma Pharmaceuticals plc, Jubilant Cadista Pharmaceutical, Sanofi S.A., Solco Healthcare (Prinston Pharmaceutical Inc.) and Torrent Pharmaceuticals Ltd.
The growing demand for lowering carbon emissions from the aviation sector is driving the Renewable Or Bio Jet Fuel Market Demand . Stringent regulations regarding reduction of greenhouse gas emissions are forcing major airlines as well as aircraft manufacturers to use higher blends of biofuels.
Technological advancements in biodiesel production processes are further catalyzing the demand for renewable jet fuels. New technologies such as hydrothermal liquefaction of biomass are helping produce bio jet fuels more efficiently and economically.
Market Trends
First, Sustainable Aviation Fuel (SAF) blending targets by major airports and airline operators are expected to drive higher volumes of renewable aviation fuel consumption. Major aviation hubs like Los Angeles International Airport have set an ambitious target of supplying 10% of jet fuel consumption through SAF by 2028.
Second, favorable policies and incentives by regulatory bodies are encouraging production of renewable jet fuels. Policies like tax exemptions and minimum blend mandates provide the necessary impetus to renewable fuel producers and users.
Market Opportunities
First, partnerships along the renewable jet fuel value chain offer significant opportunities. Collaborations between fuel producers, technology developers, airports and airlines will help commercialize advanced biofuel technologies and ramp up supplies.
Second, emerging technologies to produce drop-in biofuels from agricultural residues and municipal solid waste offer a huge market potential. Newer feedstocks and innovative processes can help achieve commercial scale production of affordable renewable aviation fuels.
Impact of COVID-19 on Renewable or Bio Jet Fuel Market Growth
The COVID-19 pandemic has significantly impacted the growth of the renewable or bio jet fuel market. During the initial phase of the pandemic, international as well as domestic travel restrictions led to a steep decline in aviation activities across the globe. This directly reduced the demand for conventional jet fuel as well as renewable or bio jet fuel in 2020. However, various government bodies and market players recognized aviation biofuels as a strategy to boost economic recovery and reduce carbon footprint of the aviation industry post-COVID. They encouraged research and development of sustainable aviation fuels through initiatives such as tax incentives, investment programs and blending quotas. This helped the renewable or bio jet fuel market maintain positive growth during the pandemic despite challenges. With mass vaccination programs underway, the aviation industry is gradually restarting operations. Though scheduled passenger traffic is yet to return to pre-COVID levels, cargo operations have rebounded faster. This has provided some momentum to the renewable or bio jet fuel market. As airline travel picks up pace across regions in coming years, the demand for environmentally friendly drop-in jet fuels is also anticipated to rise steadily. The industry may witness higher adoption of renewable or bio jet fuels to meet sustainability goals and decarbonization targets set by various countries and airlines.
Geographical Regions with Highest Concentration of Renewable or Bio Jet Fuel Market Value
Currently, the regions with highest market value for renewable or bio jet fuels are North America and Europe. The US and countries like France, Germany and Italy have implemented supportive policies to drive the production and usage of sustainable aviation biofuels. For instance, the US provides tax incentives for companies producing biofuels that meet certain environmental criteria. Europe has set a goal of incorporating at least 2 million tons of renewable jet fuel annually by 2030. Both the regions are also home to major aircraft manufacturers and have presence of large airlines supportive of bio jet fuel deployment. Going forward, Asia Pacific region with thriving aviation sectors in China and India is expected to witness fastest value growth for renewable or bio jet fuels to substitute a portion of conventional jet kerosene.
Fastest Growing Region for Renewable or Bio Jet Fuel Market
Asia Pacific region is anticipated to emerge as the fastest growing regional market for renewable or bio jet fuels during the forecast period from 2024 to 2031. This is supported by factors like expanding aviation networks, rising passenger traffic, increasing number of flights and progressive government initiatives in the region. Countries like India and China are investing in domestic production of sustainable aviation fuels. For example, Indian Oil Corporation has collaborated with US-based Gevo to build renewable jet fuel units. Major airports in Asia Pacific have also started supplying bio jet blends. With strong economic growth, growing environmental concerns and rapid aviation infrastructure development, the demand for renewable alternatives to fossil jet fuel is predicted to surge in the Asia Pacific region at a significant pace compared to mature markets of North America and Europe.
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