Sustainable Aviation Fuel’s Tipping Point: 3 Critical Business Challenges and the Path Forward
Opening Summary
According to the International Air Transport Association (IATA), sustainable aviation fuel production reached over 600 million liters in 2023—a remarkable 200% increase from 2022, yet still representing less than 0.2% of total aviation fuel consumption. In my work with major airlines and energy companies, I’ve witnessed firsthand the paradox we’re facing: unprecedented momentum coupled with daunting scalability challenges. The World Economic Forum projects that aviation emissions could triple by 2050 without significant intervention, making SAF not just an environmental imperative but a business survival strategy. What fascinates me most about this industry’s current state is that we’re no longer debating whether SAF will happen—we’re grappling with how quickly it can scale while maintaining economic viability. Having consulted with organizations navigating this transition, I see 2024 as the year where strategic decisions made today will determine market leadership for decades to come.
Main Content: Top Three Business Challenges
Challenge 1: The Feedstock Scalability Paradox
The most pressing challenge I’m observing in my consulting engagements is what I call the “feedstock scalability paradox.” As noted by McKinsey & Company, current SAF production relies heavily on limited feedstocks like used cooking oil and agricultural waste, creating an inherent ceiling on growth. The Harvard Business Review recently highlighted that even if we diverted all global used cooking oil to SAF production, we’d only meet about 1% of aviation’s fuel needs. I’ve worked with airlines that secured offtake agreements only to discover their suppliers couldn’t source sufficient feedstock at competitive prices. This isn’t just a supply chain issue—it’s a fundamental constraint that could derail the entire SAF transition if not addressed strategically. The reality is that we’re competing with other industries for the same limited sustainable resources, creating price volatility that makes long-term planning exceptionally difficult for aviation leaders.
Challenge 2: The Green Premium Economic Model
The second critical challenge revolves around what Deloitte identifies as the “green premium”—the significant cost differential between conventional jet fuel and SAF, typically ranging from 2-5 times higher. In my strategic sessions with airline executives, I’ve seen how this premium creates a fundamental business model tension. While corporate sustainability commitments drive demand, the economic reality often forces difficult trade-offs between environmental goals and profitability. Accenture research shows that even with growing corporate travel sustainability programs, the willingness to pay premiums remains limited. What makes this particularly challenging is that SAF costs aren’t expected to reach parity with conventional fuels until massive scale is achieved—creating a classic chicken-and-egg problem. I’ve advised organizations struggling with how to absorb these costs without compromising competitive positioning, and the solutions are far from straightforward.
Challenge 3: Infrastructure Transition Complexity
The third challenge that deserves more attention is the infrastructure transition complexity. According to PwC’s analysis, the existing aviation fuel infrastructure—from pipelines to storage facilities to airport fueling systems—was designed for conventional fuels, creating significant compatibility and logistics challenges. In my work with airport authorities and fuel suppliers, I’ve seen how the physical realities of infrastructure create invisible barriers to adoption. The World Economic Forum notes that blending limitations, separate storage requirements, and transportation constraints add layers of complexity that many organizations underestimate. What’s particularly challenging is that infrastructure investments require long-term certainty about SAF adoption rates, while adoption rates depend on infrastructure availability—another circular dependency that demands strategic intervention.
Solutions and Innovations
The exciting part of my work as a futurist is identifying the breakthrough solutions emerging to address these challenges. I’m seeing three particularly promising innovations gaining traction:
First, advanced feedstock technologies are revolutionizing scalability. Companies like LanzaJet and Fulcrum BioEnergy are pioneering waste-to-fuel pathways that can utilize municipal solid waste and other non-food feedstocks. I recently consulted with an energy company implementing gasification technology that can process multiple waste streams simultaneously, dramatically expanding the potential feedstock base.
Second, power-to-liquid (PtL) technologies represent what I believe will be the ultimate game-changer. As the European Commission’s ReFuelEU Aviation initiative recognizes, PtL fuels produced from green hydrogen and captured carbon dioxide offer virtually unlimited scalability without feedstock constraints. I’m working with several forward-thinking organizations that are positioning themselves in the green hydrogen ecosystem, recognizing that early movers will capture significant value.
Third, digital fuel management platforms are addressing the economic and infrastructure challenges. Blockchain-enabled fuel tracing systems, like those being piloted by major airlines, provide transparency that justifies premium pricing while ensuring regulatory compliance. Meanwhile, AI-powered logistics optimization helps manage the complex blending and distribution challenges, reducing costs and improving efficiency.
The Future: Projections and Forecasts
Based on my analysis of current trajectories and technological breakthroughs, I project that the SAF industry will experience exponential growth between now and 2034. According to BloombergNEF, SAF production capacity is expected to reach 25 billion liters annually by 2030, representing a 40-fold increase from current levels. However, I believe this underestimates the acceleration we’ll see as new technologies reach commercial scale.
My foresight exercises with industry leaders point to several key milestones: By 2026, I predict we’ll see the first commercial-scale PtL facilities coming online, fundamentally changing the scalability equation. By 2028, I expect SAF costs to decline to 1.5-2 times conventional jet fuel as production scales and technologies mature. Most significantly, by 2032, I project that SAF will account for at least 10% of global aviation fuel consumption, driven by regulatory mandates, corporate sustainability commitments, and technological breakthroughs.
The financial implications are staggering. Goldman Sachs Research estimates that the SAF market could represent a $2 trillion cumulative investment opportunity through 2050. What’s particularly compelling from my perspective is that the companies positioning themselves in the SAF value chain today—from technology providers to feedstock innovators to logistics specialists—are building what could become the energy giants of tomorrow.
Final Take: 10-Year Outlook
Over the next decade, I believe sustainable aviation fuel will transform from a niche product to a mainstream energy source, fundamentally reshaping the aviation industry’s environmental and economic landscape. The companies that thrive will be those that approach SAF not as a compliance requirement but as a strategic opportunity. We’ll see new business models emerge, new partnerships between unlikely players, and new technologies that make today’s challenges seem quaint. The risk isn’t in moving too fast—it’s in moving too slowly and missing the window to establish leadership in this rapidly evolving space. The organizations that master the SAF transition will not only reduce their environmental impact but will build significant competitive advantage in an increasingly sustainability-conscious market.
Ian Khan’s Closing
In my two decades of studying technological transformations, I’ve learned that the most significant breakthroughs happen when necessity meets innovation—and that’s exactly where we are with sustainable aviation fuel today. As I often tell the leaders I work with, “The future belongs to those who see possibilities before they become obvious.”
To dive deeper into the future of Sustainable Aviation Fuel and gain actionable insights for your organization, I invite you to:
- Read my bestselling books on digital transformation and future readiness
- Watch my Amazon Prime series ‘The Futurist’ for cutting-edge insights
- Book me for a keynote presentation, workshop, or strategic leadership intervention to prepare your team for what’s ahead
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About Ian Khan
Ian Khan is a globally recognized keynote speaker, bestselling author, and prolific thinker and thought leader on emerging technologies and future readiness. Shortlisted for the prestigious Thinkers50 Future Readiness Award, Ian has advised Fortune 500 companies, government organizations, and global leaders on navigating digital transformation and building future-ready organizations. Through his keynote presentations, bestselling books, and Amazon Prime series “The Futurist,” Ian helps organizations worldwide understand and prepare for the technologies shaping our tomorrow.
