Pathways to Sustainable Aviation Fuel (Asia Pacific Edition)
Dear reader,
This report has been developed in anticipation of the Sustainable Aviation Futures Asia Pacific Congress, taking place from 4-6 November 2024 in Singapore. The three day congress will establish APAC’s SAF and aviation decarbonisation roadmap and bring together over 250 leading experts from across the aviation and energy value chain to discuss how the region can unlock its vast potential to become a leading global SAF market.
With policy announcements and feedstock opportunities attracting investment to Asia Pacific’s sustainability and decarbonisation goals, the event offers a vital insight into the opportunities and challenges the region faces on its pathway to becoming a key player in the SAF industry. The program features high level panel discussions and case studies exploring regulatory frameworks, investment strategies, feedstock capabilities, policy overviews and future market insights.
80 expert speakers from airlines, governments and energy industry heavyweights will sharing strategies into scaling SAF production, overcoming market entry challenges, achieving net-zero aviation pathways, and establish how the world’s fastest-growing aviation market can balance growth with sustainability. The event also offers unmissable networking opportunities, one-to-one meeting spaces, and an evening drinks reception. Join the foremost leaders in the sustainable aviation space to learn how Asia Pacific can shape the future of global aviation.
WELCOME
For over 15 years, SimpliFlying has been a trusted partner to airlines, airports, and technology firms worldwide. We have been on a mission to help build trust in aviation. To empower the industry to soar to new heights through digitalisation, innovation, and a steadfast commitment to sustainability.
We're not just sought after strategy consultants, we are passionate advocates for meaningful change. Headquartered in Singapore, our global team based out of Canada, India, Spain and the UK is dedicated to equipping aviation and technology executives with the tools, insights, and strategies needed to navigate the complexities of sustainable aviation.
From major airlines and airports to aircraft manufacturers and travel technology companies, our extensive client base underscores our reputation as a trusted partner in the aviation industry since 2008.
HOW CAN WE HELP?
At SimpliFlying, we're committed to helping you navigate the complexities of sustainable aviation and thrive in an ever-changing landscape.
Here are some ways we can help you in your sustainability journey:
Share your vision with a global audience
Like 100+ other CxOs in the industry, enlist your CEO or Head of Sustainability to be interviewed by Shashank Nigam. Share your vision for the future of travel on the world’s best-known sustainable aviation podcast "Sustainability in the Air".
Find out more on becoming a partner
Grow your brand in aviation
SimpliFlying has helped a multitude of technology firms scale up in aviation – from launching an airplane to marketing an Airbus A380 engine. We can help you amplify your brand and help build awareness with key decision-makers.
Stay
informed, stay ahead
We deliver in-depth monthly or quarterly briefings to the senior leadership teams on a topic/issue of your choosing. You can also sign up for a series of briefings that cover key aspects of the present and future of sustainable aviation.
Discover the next wave of sustainable travel technology
The SimpliFlying Launchpad brings ready-to-scale technologies that can help accelerate sustainable travel to decision-makers in aviation. We curate the best startups and scaleups, help them build an aviation-specific brand strategy, and introduce them to airlines and airports ready to put a pilot in place.
Connect
sustainable tech startups with investors and industry
SimpliFlying Immersions pioneer a new era of real-life connections through immersive experiences, deep learning, and cutting-edge innovation exchange. We do this by facilitating site visits and bringing aviation leaders to startup facilities to offer a platform for tangible collaborations to take shape.
Stay Informed. Stay Ahead.
green.simpliflying.com
EXECUTIVE SUMMARY
The Asia Pacific (APAC) region is emerging as a pivotal player in the global Sustainable Aviation Fuel (SAF) landscape. This report examines the current state of SAF development in APAC, highlighting key initiatives, challenges, and opportunities across the region. APAC countries are making significant strides in SAF production and adoption. China, for instance, has set a target for using 50,000 tonnes of SAF by 2025, while Japan aims to substitute 10% of aviation fuel with SAF by 2030. Singapore will implement a SAF mandate for all departing flights from 2026, starting at 1% and aiming for 3-5% by 2030.
Source: ExxonMobil Asia Pacific
The region's approach to SAF development is diverse, reflecting the varied resources and priorities of different countries. While some, like Malaysia and Indonesia, are exploring palm oil-based SAF, others such as Australia and India are focusing on agricultural residues and waste-to-fuel technologies.
However, challenges remain. The high cost of SAF production, limited feedstock availability, and sustainability concerns surrounding certain feedstocks like palm oil pose significant hurdles. Additionally, the varying sustainability standards across different regions complicate international SAF trade and adoption.
While the APAC region faces significant challenges in SAF development, the region's abundant resources, technological capabilities, and increasing policy support provide a strong foundation for future growth. As APAC countries refine their SAF policies and invest in key technologies, they have the potential to become leaders in sustainable aviation, contributing significantly to global decarbonisation efforts in the aviation sector.
EXECUTIVE SUMMARY
INTRODUCTION
Is APAC lagging behind?
The APAC region, home to some of the world's fastest-growing aviation markets, is at a critical juncture in the pursuit of sustainable aviation. While Europe and North America have seized the headlines with ambitious SAF mandates and investment figures, APAC's approach has been a mixed bag.
At first glance, the region might appear to be trailing its Western counterparts. However, a closer examination reveals a more complex picture. Japan, for instance, has set a goal of replacing 10% of aviation fuel for international flights with SAF by 2030. Singapore will introduce a SAF mandate from 2026, starting at 1% and aiming for 3-5% by 2030. China's 14th Five-Year Plan for Green Civil Aviation Development aims to increase the cumulative consumption of SAF to over 50,000 tonnes by 2025.
The diversity of APAC – in terms of economic development, technological readiness, and natural resources – means that a one-size-fits-all approach to SAF adoption simply wouldn't work. What we're seeing instead is a mosaic of approaches, each tailored to the specific circumstances of individual countries. Some, like Japan and Singapore, are setting clear targets and mandates. Others, like China and India, are focusing on developing robust domestic SAF production capabilities.
Source: ESGtoday
Moreover, APAC's perceived lag might actually prove advantageous in the long run. By observing the successes and challenges faced by early adopters in Europe and North America, APAC countries can potentially avoid pitfalls and implement more effective policies and technologies.
As we delve deeper into the SAF landscape in APAC, it becomes clear that the region is not so much lagging behind as it is charting its own course towards sustainable aviation, one that could potentially reshape the global SAF industry in the years to come.
SAF is currently the linchpin in aviation's quest for decarbonisation. Unlike technologies like hydrogen-powered or electric aircraft, SAF offers a near-term solution that can be used in existing aircraft with minimal modifications.
The International Air Transport Association (IATA) projects that SAF could contribute around 65% of the emission reductions needed for the industry to reach net-zero by 2050. This is particularly crucial for long-haul flights, which account for the majority of aviation emissions and for which electric or hydrogen propulsion remains unfeasible in the foreseeable future.
The importance of SAF is underscored by the growing demand for air travel in the APAC region. As of January 2023, there were 5,976 aircraft on order by Asia-Pacific airlines, surpassing pre-pandemic levels. Narrowbody types dominate these orders, with 46.8% for Airbus narrowbodies and 25.6% for Boeing narrowbodies.
Asia-Pacific Airline Orders* by Aircraft Family
*As of Jan. 29
Source: CAPA
SAF offers several key advantages that make it the most promising near-term solution for aviation decarbonisation:
• Drop-in capability: Can be used in existing aircraft engines without requiring significant modifications.
• Infrastructure compatibility: Can use existing fuel storage and distribution infrastructure.
• Scalability: If production technologies mature and economies of scale kick in, SAF might be produced in volumes sufficient to meet growing demand.
• Lifecycle emissions reduction: Reduced lifecycle emissions by up to 80% compared to conventional jet fuel.
• Feedstock flexibility: Can be produced from a variety of feedstocks, allowing for adaptation to local resources and conditions.
However, the task of scaling up SAF production to meet the industry's needs is formidable. By the end of 2021, SAF amounted to less than 0.1% of global fuel consumption. To scale its production, significant investments in SAF production facilities, feedstock supply chains, and distribution networks are needed.
For the APAC region, with its rapidly growing aviation market and diverse resource base, SAF represents both a challenge and an opportunity. The region's ability to scale up SAF production and use will be crucial not only for its own sustainability goals but for the global aviation industry's net-zero ambitions.
Source: Neste
THE NEED FOR URGENCY
The APAC region urgently needs climate action due to its extreme vulnerability to climate change impacts and its critical role in global emissions reduction. Despite historically lower contributions to global CO2 emissions, six of the ten countries most at risk from extreme weather events are in APAC, including Myanmar, the Philippines, Bangladesh, Pakistan, Thailand, and Nepal.
The region is already experiencing severe consequences: eight of the eleven strongest landfalling tropical cyclones in recorded history occurred here, with six in the past decade alone. Melting Himalayan glaciers and intensifying monsoons have led to catastrophic floods, like Pakistan's 2022 disaster that displaced 7.9 million people. These climate impacts exacerbate existing challenges such as poverty, air pollution, and political instability.
Extreme high temperatures vs extreme precipitation, index scores for APAC countries
Bubble size = Net Foreign Direct Investment (FDI) 2022 (USD)
Source: Verisk Maplecroft, IMF
Moreover, as home to 60% of the world's population and the fastest-growing economies, APAC now contributes the largest share of global greenhouse gas emissions. Countries like China, India, Japan, and Indonesia are major emitters. The region's development trajectory will significantly influence global climate outcomes.
Urgent action is crucial not only to protect vulnerable populations but also to ensure sustainable development.
Spotlight on aviation
Recent research from the International Council on Clean Transportation (ICCT) has brought into sharp focus the urgent need for rapid decarbonisation in the aviation sector. Released in July 2024, the study assesses whether current manufacturer delivery projections are consistent with the net-zero target set forth by the International Civil Aviation Organization (ICAO) at its 41st Assembly.
The ICCT defines a net-zero carbon budget of 18.4 billion tonnes for the aviation sector, calculated as an average from four industry decarbonisation roadmaps. According to the study, the existing in-service fleet as of 2023 is projected to emit about 9 billion tonnes of CO2 before being retired. This amounts to almost half of the netzero carbon budget, leaving little room for emissions from new aircraft deliveries.
The ICCT modelled lifetime CO2 emissions from the 2023 global fleet and new aircraft deliveries through 2042 under three decarbonisation scenarios: a businessas-usual (Baseline) scenario, and two optimistic scenarios involving aggressive implementation of SAF and fuel efficiency improvements.
Even in the most optimistic scenario, which assumes substantial SAF uptake and aggressive fuel efficiency improvements, the carbon budget would still be exhausted by 2037. It is therefore imperative that all new aircraft delivered by the mid-2030s produce net zero CO2 emissions throughout their operational lifetimes. In other words, manufacturers must transition to net-zero emissions about 15 years before airlines.
Consumption of aviation carbon budget from cumulative lifetime emissions of projected fleet
Source: ICCT
For the APAC region, these findings are particularly relevant. As the fastest-growing aviation market, APAC has the potential to be either a major contributor to aviation emissions or a leader in their reduction. The ICCT's research underscores the need for urgent action in scaling up SAF production and use in the region.
Industry snapshot: Air New Zealand's dropped targets
This urgency is further highlighted by Air New Zealand's recent decision to abandon its 2030 target to reduce carbon emissions by nearly 29%. The airline cited two main reasons for dropping its target: delays in fleet renewal due to global manufacturing and supply chain issues, and difficulties in procuring sufficient quantities of SAF at an economically viable price.
For the APAC region, Air New Zealand's experience offers valuable lessons. It underscores the need for a coordinated approach to SAF development, one that addresses not just production but also distribution and pricing. It also highlights the importance of policy support to help bridge the cost gap between SAF and conventional jet fuel.
Moreover, Air New Zealand's situation illustrates the interconnected nature of the aviation industry's sustainability efforts. Delays in aircraft manufacturing in one part of the world can have knockon effects on airlines' ability to meet their emissions targets in another. This global interdependence emphasises the need for international cooperation in addressing aviation's climate impact.
Similarly, New Zealand's broader climate policies may have also forced Air New Zealand’s hand. The country's recent policy shifts, including the reversal of the ban on offshore oil and gas exploration, the delay
in pricing agricultural emissions, and cuts to climate action projects, highlight the challenges of balancing economic interests with environmental goals. The government's reliance on future technological solutions and carbon offsetting, rather than immediate emissions reductions, has been criticised by climate scientists as a "high risk" approach.
Source: New Zealand
The ICCT's research and Air New Zealand's decision converge on a single point: the need for urgent and decisive action on SAF. Without swift action to scale up SAF production and use, the region risks seeing its aviation emissions spiral upwards, potentially undermining global efforts to combat climate change.
TYPES OF SAF AND THEIR PRODUCTION PATHWAYS
SAF can be broadly categorised into three generations, each with its own production pathways and feedstock requirements. Understanding these different types of SAF is crucial for comprehending the opportunities and challenges facing the APAC region in its pursuit of sustainable aviation.SAF can be broadly categorised into three generations, each with its own production pathways and feedstock requirements. Understanding these different types of SAF is crucial for comprehending the opportunities and challenges facing the APAC region in its pursuit of sustainable aviation.
First-generation SAF
First-generation SAF, also known as conventional biofuels, represents the earliest forays into sustainable aviation fuel. These fuels are primarily derived from food crops such as corn, sugarcane, and vegetable oils like soybean or palm oil.
The most common production pathway for first-generation SAF is the Hydroprocessed Esters and Fatty Acids (HEFA) process. This involves treating used cooking oil (UCO) or animal fats with hydrogen to remove oxygen and create hydrocarbon chains suitable for use as jet fuel. HEFA-based SAF is the only type of SAF commercially available today, and IATA predicts that in the next 5 years, nearly 85% of all the upcoming SAF facilities will deploy the HEFA process for production.
While first-generation SAF offered a starting point for the industry, it has faced some criticism for potentially competing with food production and, in some cases, for having questionable sustainability credentials.
PALM OIL AND USED COOKING OIL
Countries like Malaysia and Indonesia, the world's largest palm oil producers, have been keen to promote its use in SAF production. Palm oil cultivation, however, has always raised concerns about deforestation, biodiversity loss and has had a complex history in South-east Asia.
In 2013, Wilmar International, one of the largest palm oil companies in the world, had pledged to end palm-oil driven deforestation with its 'No Deforestation, No Peat, No Exploitation' policy. What followed was a decade where deforestation plummeted to about 90% and consistently remained low. The industry was even
Source: Mongabay
lauded for clearing up its act, a far-cry from what it was infamous for – clearing up forests. However, deforestation has resurfaced in recent years. Nearly 30,000 hectares of forest was cleared in 2023, most of which were carbon-rich peatlands, primarily in Borneo and Papua. Given these concerns, the EU plans to ban the import of palm oil and implement stricter import rules to prevent deforestation-linked products.
Used Cooking Oil (UCO), often touted as a more sustainable alternative, also faces unique challenges of its own. The rapid increase in demand for UCO-based biofuels in Europe and the US has led to a heavy reliance on imports from Asia, raising questions about the traceability and true sustainability of these feedstocks. However, the kicker lies not around these questions but sheer availability of such feedstocks for the region’s own SAF development. In fact, according to a report by Transport & Environment (T&E), China could run out of its UCO supply given the increasing demand. This could, in turn, open more routes for the use of palm oil as a feedstock instead which comes with its own controversies and complications.
There are also concerns about potential fraud in UCO supply chains, which could undermine the credibility of SAF as a decarbonisation solution for aviation.
Second-generation SAF
Second-generation SAF, also referred to as advanced biofuels, aims to address the shortcomings of HEFA fuels by using non-food biomass as feedstock. This includes agricultural residues, forestry waste, municipal solid waste, and purpose-grown energy crops on marginal land.
Several production pathways exist for second-generation SAF:
• Gasification-Fischer-Tropsch (FT) synthesis: Converts biomass into syngas, which is then converted into liquid hydrocarbons through the FT process.
• Alcohol-to-Jet (AtJ): Converts alcohols (ethanol or butanol) derived from biomass into jet fuel.
• Hydrothermal liquefaction: Uses high temperature and pressure to convert wet biomass directly into bio-crude oil, which can then be refined into jet fuel.
Source: Energy Industry Review
Second-generation SAF holds particular promise for the APAC region. Countries like India and China, with their vast agricultural sectors, have significant potential for producing SAF from crop residues. For instance, India is exploring the use of rice straw, which is otherwise a major contributor to air pollution when the crop residue is burnt in fields, as a feedstock for SAF production. An ethanol plant, set up in August 2022 in Haryana, now produces 100,000 litres of bioethanol daily from rice straw. The government intends to use this bioethanol to make AtJ SAF.
In Malaysia, Japan's Euglena, Malaysia's Petronas and Italy's Eni are constructing a 1.3 billion USD biofuel production plant that uses second-generation feedstocks, and has a production capacity of 650,000 mt/year.
Third-generation SAF
Third-generation SAF or synthetic fuels represent the cutting edge of SAF technology. This category includes fuels synthesised using renewable electricity, also known as Powerto-Liquid (PtL) or e-fuels.
PtL fuels are produced by combining green hydrogen (produced through electrolysis using renewable electricity) with captured CO2. This process, while energy-intensive, has the potential to produce truly carbon-neutral fuels if powered entirely by renewable energy.
Source: Airbus
In 2023, Cathay Pacific and the State Power Investment Corporation (SPIC) announced plans to develop four PtL facilities in China, each capable of producing 50,000-100,000 tonnes of SAF annually.
In Japan, IHI Corporation has also partnered with Singapore’s Institute of Sustainability for Chemicals, Energy and Environment (ISCE) to install a small-scale CO2 and hydrogen-toSAF plant in Singapore. IHI is also conducting research on algae-based SAF production. Algae-based SAF has generated significant interest due to its high oil content and rapid growth rate. Algae can be cultivated on non-arable land and in saline water, avoiding competition with food crops. However, the technology for large-scale algae cultivation and oil extraction is still in development.
THE ROLE OF CDR AND GREEN HYDROGEN IN APAC
The APAC region is making significant strides in the development of green hydrogen and Carbon Dioxide Removal (CDR) – two technologies essential for the production of PtL SAF.
• China, the global leader in hydrogen advancements, aims to produce up to 200,000 tonnes of hydrogen annually by 2025, with plans for 70% of its hydrogen to be green by 2050. The country's local governments are introducing favourable policies to encourage investment in hydrogen projects. By the end of 2024, it aims to install 2.5 gigawatts (GW) of electrolyser capacity which could yield up to 220,000 tonnes of green hydrogen annually, 6 kilotons per annum more than the rest of the world combined. This mirrors China's dominance in solar panel manufacturing, suggesting potential for rapid cost reductions.
• Japan, taking a different tack, has legislated long-term support. Its Hydrogen Society Promotion Act promises 15-year subsidies for low-carbon hydrogen, both domestic and imported. The impact on SAF production remains to be seen, but the policy signals clear intent.
• India is investing INR 45,000 (~USD 5.3 billion) crore to establish 15,000 megawatt (MW) of electrolyser capacity for green hydrogen production by 2026. Undertaken via India’s National Green Hydrogen Mission, this initiative could help create significant SAF feedstock for PtL production.
• Singapore with its planned USD 20 million ocean CO2 removal facility aims to extract 3,650 metric tons of CO2 annually, starting 2025. While not directly linked to SAF, it hints at potential synergies in future PtL processes.
However, integrating these technologies into SAF production faces hurdles. Both require substantial renewable electricity, straining existing infrastructure. Current high costs also impede economic viability.
Moreover, technological readiness varies. While electrolysers for green hydrogen production are beginning to be commercially available, large-scale CDR technologies are still nascent. The recent Singapore project, for instance, scales up a technology that previously extracted merely 100 kilograms or (0.1 ton) of CO2 daily.
Policy support differs markedly across the APAC region. China's approach leans towards industrial policy, while Japan's new law suggests a more market-oriented strategy. India's massive investment signals state-led development, contrasting with Singapore's publicprivate partnership model in CDR.
While theoretically promising, the practical challenges of integrating green hydrogen and captured CO2 into jet fuel production at scale are formidable. The aviation industry's tight margins further complicate adoption of potentially costlier fuels.
As APAC countries invest in these technologies, their success in SAF production will depend on overcoming these technical, economic, and policy hurdles. The region's diverse approaches offer a real-world laboratory for the future of sustainable aviation.
THE REGULATORY LANDSCAPE IN APAC
The regulatory environment for SAF in APAC is diverse and rapidly evolving. While approaches vary, there's a clear trend towards more ambitious SAF targets and supportive policies.
China
According to the World Airport Traffic Forecasts (WATF) released earlier this year by ACI World, China is the world's second-largest aviation market, and contributes to about 11% of the world’s jet fuel consumption. The forecast also estimates that China would contribute about 21% of global passenger traffic growth in the next two decades and overtake the US as the largest aviation market in the world before 2035.
Top 10 countries globally by passenger traffic growth contribution (2019-2041)
Given the predicted growth of aviation traffic, China is taking a methodical approach to SAF development. The country's 14th Five-Year Plan, released in 2022, sets a target for SAF consumption to exceed 50,000 tonnes by 2025.
This goal, however, isn’t binding in nature, and no clear pathways were defined to achieve it. According to a 2022 report by the Institute of Energy at Peking University, Chinese policies lacked systematic top-down designs and clear policy signals about SAF usage from the government.
Source: ACI Asia-Pacific and Middle East
Source: South China Morning Post
However, in a series of positive developments in 2023, the Civil Aviation Authority of China (CAAC) launched the country's first technical centre for SAF in Chengdu. This centre is tasked with mapping out industry policy, setting up standards for products and quality control, and setting up test facilities for new products. The CAAC is also looking to establish a Chinese certification system for SAF. It is also expected that China will unveil its policy for SAF use for 2030 this year.
The HEFA pathway is currently the most dominant pathway of SAF production. According to the Institute of Energy, China holds significant potential for SAF production due to its feedstocks, which, if optimally utilised, could result in an annual production of nearly 46 million tons of SAF annually.
Potential availability of SAF feedstocks in China
Source: Institute of Energy, Peking University
Source: Airbus
• Export potential: If China can fully leverage its feedstock potential, it could become a significant global SAF supplier, with production potentially exceeding domestic demand.
• Green hydrogen and PtL production: Over ten provinces in China have developed explicit plans for hydrogen development, which could support PtL SAF production in the future.
• HVO capacity conversion: The Institute of Energy estimates that if no new SAF or Hydrogenated Vegetable Oil (HVO) production is added before 2025, and China dedicates its existing and planned SAF and HVO capacities solely to SAF production, the total SAF production in China could reach 2.05 million tons, amounting to roughly 4.5% of China’s total aviation fuel consumption.
• Renewable electricity advantage: China is on track to reach 1,200GW of installed wind and solar capacity by the end of 2024, which is twice the capacity of the rest of the world. This vast capacity for renewable electricity generation could drive the commercialisation and scaling of PtL SAF production.
China has not yet set specific SAF targets. However, the country's broader ambition to peak carbon emissions before 2030 and achieve carbon neutrality by 2060 suggests that more ambitious SAF policies may be on the horizon. While China's SAF market shows significant potential, realising it will require stronger policy support, technological advancements, and market incentives.
India has the third-largest domestic aviation market, with a domestic airline capacity of about 15.6 million (up from 8 million in 2014). As its aviation sector grows, India is in the process of developing a comprehensive SAF roadmap.
The current policy landscape for SAF in India is still in its nascent stages, with no specific policies directly targeting SAF production or use. However, in 2023, the National Biofuels Coordination Committee set an indicative SAF blending target of 1% in 2027, which could increase to 2% by 2028, initially for international flights. The government is also considering a 1% SAF blending mandate by 2025, potentially increasing it to 5% by 2030. This timeline aligns with India's planned participation in the second phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
SAF production in India is limited to demonstration projects and flights at the moment. A few notable ones include a 2018 SpiceJet flight using a 25% SAF blend, produced by the Indian Institute of Petroleum using Jatropha seeds. Last year, Vistara became the first Indian carrier to operate a commercial domestic flight on a wide-body aircraft using a 17% SAF blend. Earlier this year, Praj Industries launched a demonstration facility that uses proprietary technology to process agricultural feedstocks for SAF production.
India's Airline Capacity (Domestic and International | 2005 - 2024)
India possesses substantial feedstock potential for SAF production. According to estimates by a Clean Skies for Tomorrow report, about 166 million tonnes of various feedstocks are available annually in India which could potentially yield over 22 million tonnes of SAF. This would require a mix of feedstocks.
India’s competitive renewable electricity costs also make PtL SAF production a promising prospect. With the country's solar power costs as low as 20-40 USD/ MWh (Megawatt Hour), PtL SAF production could become economically viable sooner than in other markets. The AtJ pathway also holds significant potential, given India's
Source: OAG Analyser
established sugar industry. Estimates suggest that surplus sugar production of 3-5 million tonnes annually could yield 1-1.5 million tonnes of SAF.
The government is also exploring policy interventions such as incorporating SAF under the National Biofuels Policy and offering viability gap funding to stimulate industry growth. These measures could provide crucial support for early-stage SAF projects. India has also launched a National Green Hydrogen Mission, to position the country as a leading global hub for the production, use, and export of green hydrogen, and support the transition towards clean energy.
Five main categories of feedstock could yield far more SAF than will be required in 2030
Source: Deploying Sustainable Aviation Fuels at Scale in India: Clean Skies for Tomorrow
Australia
Australia’s aviation industry accounts for roughly 1% of the country’s greenhouse gas emissions, with most of the emissions from medium to long haul flights. On a per capita basis, Australia is second only to the US in terms of annual emissions from domestic flights. To substantially cut aviation emissions, the Australian government is pushing for a shift to alternative fuels, specifically SAF.
Recently the Australian Government released an Aviation White Paper outlining its vision for the aviation sector through 2050, aiming to enhance safety, competitiveness, productivity, and sustainability. The White Paper presents a plan with 56 policy initiatives across ten key areas, including improving passenger experiences, increasing sector efficiency, supporting net zero goals, enhancing regional connectivity, and integrating new technologies. The government is also considering implementing a SAF blending mandate starting 2027, aligning with the second phase of CORSIA.
While there are no official government targets, Qantas aims to use 10% SAF by 2030 and 60% by 2050. The government is
Source: InnovationAus
Source: World Grain
actively developing a regulatory framework, and has allocated 1.5 million AUD for a regulatory impact analysis of potential SAF mandates and 18.5 million AUD to create a SAF certification scheme.
There are several SAF projects under development in Australia. Jet Zero Australia is planning a facility in Queensland to produce 100 million litres of SAF annually by 2027 using LanzaJet's AtJ technology. bp is advancing a SAF project using the HEFA process in Kwinana, Western Australia. Meanwhile, Ampol and ENEOS are conducting a feasibility study for an advanced biofuels manufacturing plant in Brisbane that could produce up to 500 million litres of SAF annually.
Australia has significant potential for SAF production due to its abundant agricultural and waste feedstocks. Moreover, sugarcane and sorghum could supply increasing portions of the nation’s fuel demand over time. According to the CSIRO’s 2023 SAF Roadmap, utilising 10% of Australia’s projected sugar and 40% of bagasse production through 2050 could produce enough SAF to meet 10% of the country’s fuel demand.
Potential SAF production from Australian sugar, bagasse and sorghum and contribution toward domestic fuel demand
Japan's SAF landscape is rapidly evolving, with the government setting ambitious targets and implementing supportive regulations. In 2021, the country laid out its Growth Strategy Through Achieving Carbon Neutrality plan, to achieve net zero emissions by 2050. In line with this strategy, Japan aims to replace 10% of jet fuel consumption with SAF by 2030, amounting to nearly 1.71 million kilolitres (451 million gallons) annually. Japan plans to introduce these regulations by mid-2024.
An analysis by ICF reveals significant domestic feedstock availability in Japan, with the capacity to produce 11 million kilolitres (2,906 million gallons) of SAF by 2050. Alongside SAF, this feedstock could also produce 4.6 million kilolitres (1,215 million gallons) of renewable diesel and naphtha co-products. The analysis also estimates that the sheer volume of domestic feedstocks could help achieve up to 80% of Japan’s total jet fuel demand by 2050.
However, Japan's limited production capacity restricts the country's ability to process its feedstocks. The ICF analysis
indicates that the primary obstacle lies with the challenge of requiring new supply chains, technologies, and commissioning refining capacity to convert these feedstocks into SAF. Moreover, technologies to convert advanced feedstocks, including AtJ, FT, and PtL, require additional time and investment to de-risk and scale. ICF estimates a total of 3-5 advanced feedstock facilities (AtJ or FT) could come online in Japan by 2030, however, the imports of either feedstocks or the fuel itself would be needed to meet the country’s demand.
Feedstock opportunity for Japan
Source: Charting the path: SAF Ecosystem in Japan, ICF
Singapore
Singapore, a key aviation hub in the region, is taking a proactive approach to SAF adoption. The country has mandated the use of SAF from 2026 on all departing flights. The current SAF target is set at 1% by 2026, and will likely increase to 3-5% by 2030. This policy is a part of Singapore’s Sustainable Air Hub Blueprint launched earlier this year by the Civil Aviation Authority of Singapore (CAAS), which lays down the country's action plan for decarbonising its aviation sector.
Source: Changi Airport
In addition to the mandate, CAAS will also introduce a SAF levy to support the purchase of SAF. This levy will vary based on factors such as distance travelled and class of travel. For example, to support the levy, it is expected that an economy class passenger flying from Singapore to London might pay an additional 16 SGD (12 USD) to support the 1% SAF uplift in 2026. Premium passengers will pay higher levies.
Singapore also plans to centralise SAF procurement to manage costs. The collected SAF levies will be leveraged to aggregate SAF demand, and scale production to achieve economies of scale. The procurement system will also potentially be used to manage SAF credits. SAF credits will be allocated to airlines based on the SAF levies collected, and for businesses credits will be given in proportion to the amount of SAF they purchase voluntarily.
Singapore's strategy leverages its position as a major aviation hub and its expertise in oil refining and petrochemicals. The country is positioning itself as a potential regional SAF hub, aiming to play a crucial role in SAF distribution and potentially production.
Indonesia
Indonesia has established several regulations to promote SAF development and use. According to an official decree of the Ministry of Energy and Mineral Resources (MEMR), the use of bio-jet fuel was mandated in Indonesia as early as 2016. The decree required 2% bio-jet fuel blending in 2016 and 5% by 2025.
To meet that goal, Indonesia’s government established the Indonesian Aviation Biofuels and Renewable Energy Task Force (ABRETF). However, the task force missed the deadline for the 2016 blending target.
Source: ANTARA/HO-Pertamina
In 2021, Indonesia's crude palm oil production reached approximately 46.89 million tons. Indonesia's primary focus for SAF production is palm oil, of which it is the world's largest producer. State-owned oil and gas company Pertamina has developed two palm oil-based biofuels (or bioavtur), the 2% blend called J2.0, and and the 2.4% blend called J2.4. Indonesia has also successfully conducted test flights using these SAF blends.
While these bioavtur fuels have been tested and certified by Indonesia’s Oil and Gas Testing Agency (LEMIGAS), and meet the ASTM D1655 standards for conventional Jet A-1 fuel, have yet to get their certification under the ICAO CORSIA scheme, mainly due to the sustainability concerns associated with palm oil.
Beyond palm oil, UCO and sugarcane are also promising feedstocks for Indonesia. In 2019, Indonesia consumed 16.2 million kilo litres of cooking oil, generating significant amounts of UCO. However, only 3 million kilo litres were successfully collected, with 2.4 million kilo litres recycled or exported. Meanwhile sugarcane production reached about 2.3 million tons in 2021, offering significant potential for SAF production. PT Pertamina plans to begin the production of bioethanol from sugarcane and cassava.
Malaysia
Malaysia, another major palm oil producer, has established a SAF blending mandate under the National Energy Transition Roadmap (NETR) published in August 2023. It proposes a blending mandate of 1% to begin with, and increasing it to 47% by 2050. The country has also adopted ICAO’s net-zero carbon emissions goal for aviation by 2050, aligning its national objectives with global standards.
Malaysia has also released the Malaysia Aviation Decarbonisation Blueprint (MADB) to further support the SAF target put forward by the NETR. The blueprint underscores the need for cross-ministerial
and multi-sectoral cooperation to map out necessary incentives to make SAF costeffective. It also recommends the need for a National Strategy for SAF and 100% SAFcompatible aircraft as some of the ways to decarbonise aviation.
To support SAF development, the Malaysian government announced 10 flagship catalyst projects in 2023, including a Future Fuel Biofuels Hub to be developed in Pengerang, Johor. This hub is expected to serve as a catalyst for creating facilities to produce a range of bio-based products, including SAF, HVO, and biochemicals. The government is also exploring collaborations
to fund and catalyse investments in SAF infrastructure.
Malaysia's feedstock potential for SAF production is substantial and diverse. The country's abundant palm oil resources present a significant opportunity for SAF production. Moreover, palm oil derivatives, including palm oil mill effluent (POME) and empty fruit bunches (EFB), which are recognised under CORSIA, are also being promoted by the Malaysian government.
UCO is also being explored in Malaysia, with an estimated potential of approximately 240 kilo tonnes per year. EcoCeres is aiming to start a SAF/HVO facility in Malaysia in 2025, and plans to use UCO as one of its primary feedstocks.
Malaysia is also investing in novel feedstocks such as microalgae. The Sarawak state government has identified 10,000 acres of land in Bintulu for algae plantation, with plans to produce significant volumes of SAF by 2030.
To address sustainability concerns, particularly regarding palm oil, Malaysia has implemented the Malaysian Sustainable Palm Oil (MSPO) certification scheme, which has been mandatory since January 1, 2020.
The government is actively working to promote the sustainability of its palm oil industry and is addressing challenges presented by international regulations such as the European Union Deforestation Regulation (EUDR) through the MSPO certification scheme.
Like Indonesia, Malaysia's SAF strategy is closely linked to its palm oil industry. However, the country is also looking to diversify its feedstock options to address sustainability concerns and align with global SAF standards.
Malaysia's net zero trajectory
Source: Malaysia Aviation Decarbonisation Blueprint
Philippines
The Philippines, an archipelagic country with a fast-growing aviation sector, is beginning to incorporate SAF into its sustainability strategy and is in the process of developing its SAF regulations. Recently, the Philippines’ Department of Energy (DOE) also announced that a SAF roadmap is currently in the works.
Source: National Geographic
The Philippine government is currently working on a comprehensive SAF roadmap to provide a framework for local SAF production and usage, setting the stage for more concrete policies in the near future.
To further promote SAF production, the Department of Science and Technology (DOST) and DOE have called for SAF research proposals. The DOE has also reported increased investor interest in bioenergy projects in the Philippines, due to improved regulations and policies, which could benefit SAF development. Further, Airbus has also committed to collaborating with the Department of Transportation (DOTr) on SAF initiatives and carbon energy extraction from landfills, potentially revolutionising the aviation sector’s energy sourcing.
The Philippines has various potential feedstock sources for SAF production, including used cooking oil, agricultural waste, forestry residues, and municipal solid waste. With Metro Manila alone generating around 10,000 metric tonnes of garbage per day, waste-to-fuel SAF projects could address both waste management and sustainable aviation challenges. The country's significant coconut oil production, currently used for biodiesel, could also be leveraged for SAF.
While the Philippines' SAF market is still in its early stages, there are significant developments underway and numerous opportunities for growth in the coming years.
Policy comparision table
• Absence of regulatory framework and incentives: While the governments promote SAF use, more explicit strategies, incentives, or mandates are needed to guide the industry and attract investments. This also creates uncertainty for potential investors and producers.
• Cost competitiveness: SAF remains 2-5x more expensive than jet fuel, requiring innovative financing mechanisms and policy support to bridge the cost gap.
• Supply chain development: Efficient collection and processing systems for feedstocks, particularly for agricultural and forestry wastes, need to be developed. Transportation and storage systems need to be established as well. For instance, agricultural residue collection faces challenges due to seasonal availability and dispersed sources.
• Competition for feedstocks: Competition with other biofuel sectors, such as road transport, could potentially limit SAF production scale-up.
A COMPARISON WITH SAF POLICIES GLOBALLY
United States
The United States is relying heavily on tax incentives and voluntary targets at the federal level, combined with state-level initiatives like low-carbon fuel standards.
Federal policies and targets
The United States has implemented several federal policies and targets to promote sustainable aviation fuel (SAF) development and usage:
• In 2021, the Biden Administration announced the Sustainable Aviation Fuel Grand Challenge, setting ambitious goals of producing 3 billion gallons of SAF annually by 2030 and 35 billion gallons by 2050, with $4.3 billion in funding opportunities for SAF projects and producers.
• The Renewable Fuel Standard (RFS) Program, implemented by the Environmental Protection Agency, requires transportation fuel blenders to incorporate certain volumes of renewable fuel into their products.
State policies and initiatives
• The Inflation Reduction Act (IRA) of 2022 introduced a two-phase credit system for SAF production. SAF producers can receive $1.25 to $1.75 per gallon based on emissions reduction. The IRA also provides additional tax credits for clean electricity, hydrogen production, carbon capture, and advanced energy projects, all of which can support SAF development.
• The Federal Aviation Administration’s (FAA) Fueling Aviation’s Sustainable Transition (FAST) grant allocates $244.53 million for SAF production, transport, blending, and storage; and $46.53 million for low-emissions aviation technologies.
At the state level, California's Low Carbon Fuel Standard (LCFS) provides tradable credits to SAF producers based on fuel carbon intensity. Oregon has a similar Clean Fuels Program, while Washington implemented its Clean Fuel Standard in 2023 to create a market-based program incentivising cleaner transportation fuels. Several US states are looking to follow suit and introduce their SAF incentive programs.
In a landmark move, British Columbia (BC) has become the first jurisdiction in North America to implement a SAF mandate.
The mandate will have three strategic aspects:
• Carbon intensity reduction (2026-2030)
Starting in 2026, fuel suppliers must reduce the carbon intensity of their products by 2%, with this requirement escalating to a 10% reduction by 2030. This goal can be achieved through either the incorporation of SAF or the creation of carbon offsets, providing flexibility for suppliers to meet the mandate.
• Volumetric SAF requirement (20282030)
From 2028, a physical volumetric requirement for SAF will be introduced. It begins at 1% SAF in 2028, equivalent to 22 million litres, increases to 2% in 2029, and reaches 3% by 2030, translating to 66 million litres of SAF. This gradual increase allows the industry time to adapt and scale up SAF production and integration.
• Impact and feasibility
The mandate's targets are considered both modest and achievable. By 2030, it is projected to increase the cost of a typical three-hour flight from Vancouver by only 1.5%, making it a cost-effective approach to reducing aviation emissions. Due to limited Canadian production in the initial stages, SAF will likely be imported from Asia to meet the mandate's requirements.
British Columbia, Canada European Union
The European Union, meanwhile, has implemented union-wide mandates for SAF blending with specific, increasing targets over time, including separate targets for e-fuels:
• The ReFuelEU Aviation Regulation, part of the "Fit for 55" package is aimed at meeting the EU's 2030 climate goals. This regulation mandates increasing SAF blending requirements, starting with 2% by 2025 and reaching 70% by 2050. It also includes specific requirements for e-fuels, mandating 1.2% by 2030 and increasing to 35% by 2050.
Source: Advanced Biofuels Canada
• The EU Emissions Trading System (EU ETS), which has included the aviation sector since 2012, follows a 'cap and trade' approach to deal with emissions. It sets a 'cap' on how much CO2 can be emitted and creates a market where carbon allowances can be 'traded'. The EU ETS has also broadened its scope to establish a monitoring, reporting and verification (MRV) system for non-CO2 effects, which will come into effect in 2025.
• Research and development support for SAF is provided through programmes such as Horizon Europe, which funds research into sustainable aviation technologies. Financial support is also available through the European Investment Bank, which provides loans and guarantees for SAF projects.
United Kingdom
The United Kingdom is combining mandates with financial support and industry collaboration, focusing on both near-term deployment and long-term research and development:
• The UK has developed the Jet Zero Strategy, which aims to achieve a netzero aviation sector by 2050. As part of this strategy, the UK plans to introduce a SAF mandate of a 2% blend in 2025, which will increase to 10% in 2030 and then to 22% in 2040.
• Supporting measures include the £165 million Advanced Fuels Fund to support first-of-a-kind SAF production plants and consideration of a revenuecertainty mechanism, such as a Guaranteed Strike Price, to encourage investment. The UK government is also funding SAF research through various programmes and collaborating with industry through initiatives like the Jet Zero Council, a partnership aimed at delivering zero-emission transatlantic flight.
Source: Menzies
Comparing APAC and international policy approaches
While APAC is generally behind in policy development, its feedstock resources and growing aviation market present significant potential for future SAF production and use, given appropriate policy support and regional coordination.
The global nature of aviation implies that APAC airlines flying to destinations in the EU or UK will need to comply with those regions' SAF mandates. This is likely to accelerate SAF adoption in APAC, even in countries with less stringent domestic policies.
The sustainability criteria for SAF set by other regions will also impact the APAC market. For instance, the EU's exclusion of palm oil-based SAF has significant implications for countries like Malaysia and Indonesia, pushing them to diversify their feedstock options and improve the sustainability of their palm oil production.
While APAC's SAF policies are generally less stringent than those in the EU or UK, they are evolving rapidly in response to both domestic priorities and international pressures. The region's approach tends to be more flexible, allowing for a diversity of strategies tailored to each country's unique circumstances.
The interplay between APAC's SAF policies and international regulations will be crucial in shaping the region's sustainable aviation landscape.
IMPACT OF INTERNATIONAL REGULATIONS ON THE APAC MARKET
FIVE KEY CHALLENGES FACING THE SAF INDUSTRY
I The growing debate around the S in SAF
The 'S' in SAF stands for 'Sustainable', but what exactly constitutes sustainability in aviation fuel is a matter of growing debate. This issue is particularly pertinent in the APAC region, where feedstock choices and production methods vary widely across countries.
At the heart of this debate is the question of lifecycle emissions. While SAF can significantly reduce emissions at the point of use, the entire production processfrom feedstock cultivation to fuel refinement - must be considered to truly assess sustainability.
For instance, the use of palm oil as a SAF feedstock, favoured by countries like Malaysia and Indonesia, has faced criticism due to concerns about deforestation and biodiversity loss. The European Union's decision to exclude palm oil-based biofuels from its renewable energy targets has created tension with these APAC nations and highlighted the need for globally accepted sustainability criteria.
Similarly, the sustainability of agricultural residues as feedstock is being questioned. While using these residues for SAF production can prevent them from being burned in fields (a major source of air pollution in countries like India), there are concerns about soil health if too much organic matter is removed from agricultural lands.
The debate extends to more advanced SAF pathways as well. While PtL fuels can reduce overall lifecycle emissions since it uses CDR and renewable electricity as inputs, they are extremely energy intensive to produce.
As the SAF industry in APAC grows, it will need to grapple with these sustainability questions. Developing robust, internationally recognised sustainability criteria will be crucial to ensure that SAF truly lives up to its name and to facilitate global trade in these fuels.
Source: Green Air
II Availability of sustainable feedstocks
The availability of sustainable feedstocks in sufficient quantities is another major challenge. In countries like India and China, agricultural residues present a significant opportunity. However, efficient collection systems need to be developed to gather these dispersed resources. Competing uses for these residues, such as power generation or use as animal feed, must also be considered.
The use of palm oil and UCO as SAF feedstocks is a particularly contentious issue in the APAC region as mentioned previously. Moreover, as demand for UCO grows, there are concerns about its diversion from other uses, such as animal feed, which could have unintended environmental consequences.
Source: Mongabay
III Certification schemes
Interestingly, the sustainability of palm oil production is a complex issue. Despite significant environmental concerns, the industry argues that palm oil is a highly efficient crop that, if managed sustainably, could be a viable SAF feedstock. The challenge for the APAC region is to demonstrate that palm oil can be produced sustainably and to gain acceptance for this feedstock in global markets.
Addressing these issues will be crucial to establishing a credible and sustainable SAF industry. This may involve developing more robust tracking systems for UCO, investing in research to improve the sustainability of palm oil production, and diversifying feedstock options to reduce reliance on any single source.
Certification schemes play a crucial role in ensuring the sustainability and quality of SAF. However, the proliferation of different schemes across the globe presents a challenge for the APAC SAF industry.
Currently, several certification schemes are recognised for SAF, including the Roundtable on Sustainable Biomaterials (RSB), the International Sustainability and Carbon Certification (ISCC), and the Roundtable on Sustainable Palm Oil (RSPO). Each of these schemes has its own criteria and methodologies for assessing sustainability.
Certification process
Source: IATA
For APAC producers looking to export SAF to markets like Europe or North America, navigating these different certification requirements can be complex and costly. There's a risk that smaller producers might be priced out of the market due to the expenses associated with multiple certifications.
Moreover, there are ongoing debates about the adequacy of existing certification schemes in addressing indirect land use change and other complex sustainability issues. As our understanding of these issues evolves, certification schemes will need to adapt, potentially creating further complexity for producers.
The challenge for the APAC region is to engage with the development of these certification schemes to ensure they are appropriate for local contexts while still meeting global sustainability standards. There's also a need for greater harmonisation of certification schemes to reduce complexity and costs for producers.
IV Tackling high costs and limited production
The high cost of SAF compared to conventional jet fuel remains a significant barrier to widespread adoption. Currently, SAF can cost 2-5 times more than conventional jet fuel, a price premium that is challenging for airlines operating on thin profit margins.
This price differential is driven by several factors. The feedstocks used for SAF are often more expensive than crude oil. The production processes, particularly for advanced SAF pathways, are more complex and energy-intensive. And the current limited scale of production means that SAF doesn't benefit from the same economies of scale as conventional jet fuel.
In the APAC region, where low-cost carriers play a significant role in the aviation
market, the high cost of SAF poses a particular challenge. Airlines need to balance their sustainability commitments with maintaining affordable air travel.
Limited production capacity is another key issue. While several APAC countries have announced plans for SAF production facilities, current output remains a drop in the ocean compared to total jet fuel demand. Scaling up production will require significant investment in facilities and infrastructure.
Moreover, for producing e-fuels the availability of green hydrogen will be crucial. This, of course, is extremely energy intensive – and hence expensive – to produce. However, the region could benefit from some of the lowest renewable
electricity costs, particularly in India and China. According to IRENA, green hydrogen costs in Southeast Asia could become competitive with fossil-based hydrogen before 2030, with the region potentially producing up to 500 million tonnes at prices below 2 USD per kg.
However, challenges remain, including high initial costs, lack of infrastructure, and the
V Political uncertainties
need for significant capital investments. Addressing these challenges will require a multi-faceted approach. Government support, in the form of incentives for SAF production and use, will be crucial. Innovations in production technologies could help bring down costs. And as production scales up, economies of scale should lead to price reductions.
Political uncertainties can significantly impact the development of SAF in the APAC region, as evidenced by recent policy shifts in countries like New Zealand. Changes in government can lead to the reversal or weakening of climate policies, potentially derailing progress in SAF development and adoption.
For instance, New Zealand's new coalition government has backtracked on several climate initiatives, pushing back deadlines and relaxing targets. Such policy reversals can create an unstable environment for SAF investments and research. Similarly, political uncertainties can influence corporate strategies, potentially slowing down commitments to sustainable fuel alternatives.
In the APAC region, where many countries are still in the early stages of SAF policy development, political shifts could significantly alter the trajectory of SAF initiatives. Changes in government priorities, such as focusing on economic growth over environmental concerns, could result in reduced funding for SAF research or weakened mandates for its adoption.
Moreover, the reliance on "immature technologies" and offsetting rather than emissions reduction, as criticised in New Zealand's approach, could be replicated in SAF strategies across APAC. This approach carries risks, as these technologies may not develop as quickly as anticipated, potentially hindering SAF progress.
Source: Geoff Marshall / Alamy
FINANCING AND FUNDING SAF PROJECTS
Different countries in the APAC region are taking varied approaches to this financing challenge. Japan, for instance, has established the Green Innovation Fund, allocating 114.5 billion yen to help develop new fuels. Singapore has introduced a levy system to fund SAF uptake, spreading the cost across the aviation sector. In 2023, the Monetary Authority of Singapore (MAS) also launched the Singapore-Asia Taxonomy for Sustainable Finance. The taxonomy aims to provide a clear classification system to ensure companies align with Singapore's and the region's environmental goals, including the Paris Agreement's target to limit global warming to 1.5°C. This includes Singapore’s commitment to achieve net zero emissions by 2050 and the targets outlined in the Singapore Green Plan 2030.
Other countries are exploring innovative financing mechanisms. Green bonds and sustainability-linked loans are gaining traction as ways to fund SAF projects. Some governments are considering loan guarantee programmes to help de-risk investments in SAF production facilities. Despite these efforts, securing sufficient funding remains a significant hurdle. Many APAC countries, particularly developing economies, face competing priorities for limited government resources. Private sector investors, while increasingly interested in sustainable investments, often require higher returns to compensate for perceived risks.
Addressing this financing challenge will be crucial for scaling up SAF production in the APAC region. It will likely require a combination of government support, innovative financial instruments, and efforts to de-risk investments through policy certainty and technological advancements.
Source: Meric Dagli / Unsplash
Making e-fuels commercially viable
While several SAF projects are underway in the APAC region, making e-fuels commercially viable remains a significant challenge. The high energy input required for e-fuel production, coupled with the current high costs of green hydrogen production, indicates that e-fuels are not yet cost-competitive with conventional jet fuel or even other SAF pathways.
HIF Global’s upcoming e-fuel facility in Tasmania, which is set to begin production in 2028-2029, is an interesting case study in point. The project has been shortlisted for the Australian Government’s 2 billion USD Hydrogen Headstart funding program. HIF has also partnered with Idemitsu and Mitsui to develop an e-Fuels supply chain between HIF facilities and Japan. HIF plans to produce 36,000 barrels of e-Fuel per day by 2030.
However, to improve the commercial viability of e-fuels in the APAC region, the following factors will be critical:
• Decreasing renewable energy costs: As the cost of solar and wind power continues to fall, the economics of green hydrogen production – a key component of e-fuels –will improve. China, for instance, has the world's largest renewable energy pipeline and is expected to see further decreases in electricity prices as coal is phased out.
• Technological advancements: Ongoing research and development efforts are likely to increase the efficiency of electrolysis and fuel synthesis processes, potentially reducing production costs. Japan, for example, has technological strengths in several hydrogen-related areas and holds the world's largest number of patents for hydrogen fuel cells.
• Carbon pricing: As more countries implement carbon pricing mechanisms, the relative cost of e-fuels compared to fossil fuels could become more favourable. The EU ETS, which includes aviation, provides a model that APAC countries might consider.
• Scale effects: As production scales up, economies of scale could help bring down the cost of e-fuel production. China's track record in rapidly scaling up new technologies, as seen in solar panel manufacturing, suggests potential for rapid cost reductions in e-fuel production.
Source: Hydrogen Insight
• Policy support: Government incentives, mandates, and other supportive policies could help bridge the cost gap between e-fuels and conventional jet fuel. For instance, India has allocated approximately 2.4 billion USD for its National Green Hydrogen Mission, which could indirectly support e-fuel production.
Ultimately, realising the potential of e-fuels will require sustained investment, supportive policies, and collaboration between governments, industry, and research institutions. Moreover, the role of CDR technologies will also be crucial in making e-fuels commercially viable.
However, the high energy intensity of both CDR and green hydrogen production requires substantial renewable electricity, which could compete with other sectors. Additionally, the current high costs of these technologies need to be addressed to make e-fuels economically viable.
Source: Mongabay
DIRECTORY OF SAF PRODUCERS AND PROJECTS IN APAC
Accurate as of August 2024. Please note we seek to be as accurate as possible with this list, but acknowledge that the industry is constantly changing. If you believe an organisation is missing or an amendment is required, please contact us directly.
Ampol
Founded: 1936
Country: Australia ampol.com.au
Jet Zero Australia
Founded: 2021
Country: Australia jetzero.com.au
Nuseed
Founded: 2006
Country: Australia nuseed.com
Beijing Shougang & LanzaTech
Founded: 2011
Country: China shougang.com.cn/news
Cathay Pacific & State
Power Investment Corp.
Founded: 2023
Country: China cathaypacific.com
Oriental Energy
Founded: 1996
Country: China
Junheng Biology
Founded: 2012
Country: China
Wagner Sustainable Fuels
Founded: 2024
Country: Australia wagnersustainablefuels.com.au
Jiaao Enprotech
Founded: 2003
Country: China jiaaoenprotech.com
EcoCeres
Founded: 2008
Country: China eco-ceres.com
Sinopec
Founded: 2000
Country: China sinopec.com
Country: China chinadhe.com junhengbiotech.com haikegroup.com
The APAC region's diversity in terms of resources, technological readiness, and policy approaches presents both opportunities and obstacles. On one hand, this diversity allows for multiple pathways to SAF production, from palm oil-based fuels in Malaysia and Indonesia to AtJ technologies in India. On the other hand, it creates a complex landscape that could hinder regional cooperation and standardisation.
A few themes stand out:
• Feedstock sustainability: The reliance on palm oil in some countries raises significant sustainability concerns. While it offers a readily available feedstock, its production has been linked to deforestation and biodiversity loss. This could potentially limit the acceptance of APAC-produced SAF in global markets, particularly in Europe where stricter sustainability criteria are being implemented.
• Technology gaps: The disparity in the development of a hydrogen ecosystem could lead to uneven development of advanced SAF pathways like PtL across the region.
• Policy inconsistencies: The varying levels of government support and different policy approaches across APAC countries could create a fragmented SAF market. This lack of uniformity might complicate cross-border trade and investments.
• Economic viability: The high cost of SAF production, particularly for e-fuels, remains a significant barrier. While some countries like China have the potential to reduce costs through economies of scale, others may struggle to make SAF economically competitive without substantial government support.
Source: Joshua Paul / Bloomberg
• Infrastructure challenges: The development of SAF production facilities and the necessary distribution infrastructure requires significant investment. Not all countries in the region may have the financial capacity to make these investments, potentially leading to an uneven playing field.
The path forward for APAC will require addressing these challenges while capitalising on the region's strengths. This could include, but is not limited to:
Developing a regionally agreed sustainability criteria for SAF feedstocks to ensure global market acceptance.
Fostering technology transfer and collaboration to bridge the gaps in technological readiness across the region.
Working towards greater policy harmonisation to create a more unified APAC SAF market.
Exploring innovative financing mechanisms to support the high upfront costs of SAF production facilities.
Investing in research and development to improve the efficiency and reduce the costs of advanced SAF pathways like PtL.
Leveraging the region's growing renewable energy capacity to support green hydrogen production for e-fuels.
The APAC region has the potential to become a global leader in SAF production and use. However, realising this potential will require concerted effort, strategic planning, and regional cooperation. As the global aviation industry moves towards decarbonisation, the decisions and actions taken by APAC countries in the coming years will play a crucial role in shaping the future of sustainable aviation.
GLOSSARY OF TERMS
This glossary covers the main terms and abbreviations used throughout the document.
• APAC: Asia Pacific region
• SAF: Sustainable Aviation Fuel - a type of fuel derived from sustainable resources that can be used as an alternative to conventional jet fuel
• HEFA: Hydroprocessed Esters and Fatty Acids - a type of SAF produced from oils and fats
• PtL: Power-to-Liquid - a type of SAF produced by combining green hydrogen with captured CO2
• CDR: Carbon Dioxide Removaltechnologies that actively remove CO2 from the atmosphere
• CCS: Carbon Capture and Storage - the process of capturing and storing carbon dioxide before it enters the atmosphere
• Green Hydrogen: Hydrogen produced through electrolysis powered by renewable energy
• E-fuels: Synthetic fuels produced using renewable electricity
• CORSIA: Carbon Offsetting and Reduction Scheme for International Aviation - a global market-based measure adopted by ICAO to address CO2 emissions from international aviation
• ICAO: International Civil Aviation Organization
• CBAM: Carbon Border Adjustment Mechanism - a climate measure that puts a carbon price on imports of certain goods from outside the EU
• IEA: International Energy Agency
• GHG: Greenhouse Gas
• EU ETS: European Union Emissions Trading System
• Electrolysis: The process of using electricity to split water into hydrogen and oxygen
• Feedstock: Raw material used for fuel production
• Biofuel: Fuel produced from organic matter or waste
• UCO: Used Cooking Oil - a common feedstock for SAF production
• ISCC: International Sustainability and Carbon Certification - a certification system for sustainability and greenhouse gas emissions
• Blending Mandate: A requirement to blend a certain percentage of SAF with conventional jet fuel
• Net-Zero: Achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere
• CCUS: Carbon Capture, Utilisation, and Storage - processes that capture carbon dioxide from fuel combustion or industrial processes, transport it, and either use it as a resource or store it permanently
• SAF Congress APAC: Sustainable Aviation Futures Congress - Asia Pacific Region
Separating the signal from the noise in sustainable travel through the industry’s leading podcast, book, and newsletters.
Podcast
with first-hand
insights
from industry leaders
Hosted by Shashank Nigam, CEO and Founder of SimpliFlying
Launched in 2022, our podcast provides a platform for open dialogue on sustainability strategies and aviation’s path to net zero. Featuring over 100 distinguished guest speakers, like Scott Kirby (United Airlines), Marie Owens Thomsen (IATA), and Amelia DeLuca (Delta Air Lines), we bring honest perspectives and best practices from the heart of the industry.
Listen Now
The book showcasing stories of innovation and change
Co-authored by
Shashank Nigam and Dirk Singer, Head of Sustainability at SimpliFlying
Discover the inspiring stories of pioneers within aviation and climate tech as they tackle climate challenges and lead the charge toward a more sustainable future. This groundbreaking book is a must-read for anyone passionate about the future of aviation.
Get your copy
Knowledge Hub: Your go-to source for the latest in sustainable aviation
Our Sustainability in the Air platform offers a wealth of resources, including weekly articles on cutting-edge sustainable aviation brands and tech startups, comprehensive reports on topics like SAF and eVTOLs, and newsletters that thousands of industry professionals trust to keep them updated on the fast-evolving sustainable aviation landscape.
Explore the hub
THE SIMPLIFLYING LAUNCHPAD INTRODUCING
Initially launched in 2020 as an accelerator programme, the SimpliFlying Launchpad addressed pressing industry concerns around COVID-19 restrictions and rebuilding public trust in travel health. Several dozen startups successfully passed through the Launchpad, with many piloting their initiatives alongside partner airports and airlines.
Today, the industry faces a new credibility challenge: climate change.
In response, we've reinvented the Launchpad to connect cutting-edge sustainable technologies with the aviation sector. The program's core mission is to
How is it different?
identify and cultivate promising startups developing solutions to significantly mitigate air travel's environmental impact.
The revamped Launchpad focuses on eight critical areas of innovation:
Sustainable aviation fuels
Carbon capture
Electric propulsion
Eco-friendly infrastructure
Hydrogen technology
Sustainable cabin solutions
Retrofitting and
AI-driven efficiency improvement
The Launchpad's unique value proposition lies in its curated approach.
For aviation stakeholders: The Launchpad fosters collaboration with emerging technologies. Through structured support, expert mentorship, and access to resources, we help global airlines and airports de-risk assumptions, validate green innovations, and transition from plain demos to successful adoptions.
For investors: It offers access to pre-screened, cutting-edge startups building nextgeneration technologies in sustainable aviation.
For startups: It is the fastest ways to pilot with airlines and airports globally, presenting a rare opportunity to gain momentum in a traditionally conservative industry.
The programme has cultivated a robust ecosystem comprising major corporations, investors, industry experts, and strategic partners. This network is poised to accelerate the development and adoption of sustainable aviation technologies.
Interested in joining the Launchpad as an investor, airline, airport, or startup?
Dear reader,
This report has been developed in anticipation of the Sustainable Aviation Futures Asia Pacific Congress, taking place from 4-6 November 2024 in Singapore. The three day congress will establish APAC’s SAF and aviation decarbonisation roadmap and bring together over 250 leading experts from across the aviation and energy value chain to discuss how the region can unlock its vast potential to become a leading global SAF market.
With policy announcements and feedstock opportunities attracting investment to Asia Pacific’s sustainability and decarbonisation goals, the event offers a vital insight into the opportunities and challenges the region faces on its pathway to becoming a key player in the SAF industry. The program features high level panel discussions and case studies exploring regulatory frameworks, investment strategies, feedstock capabilities, policy overviews and future market insights.
80 expert speakers from airlines, governments and energy industry heavyweights will sharing strategies into scaling SAF production, overcoming market entry challenges, achieving net-zero aviation pathways, and establish how the world’s fastest-growing aviation market can balance growth with sustainability. The event also offers unmissable networking opportunities, one-to-one meeting spaces, and an evening drinks reception. Join the foremost leaders in the sustainable aviation space to learn how Asia Pacific can shape the future of global aviation.
