“The aviation fuel market size is anticipated to cross USD 325 billion in annual value by 2028, powered by the increasing preference for air travel and the improving middle-class living patterns,” says Global Market Insights Inc.
With significant advancements in the aerospace industry and the rising popularity of air transport, the demand for aviation fuels and biofuels is depicting a prolific rise. Aviation fuels are primarily specialized types of petroleum-based fuel that are used for powering aircraft. Often refined to an optimum specification under greater quality control in comparison to their counterparts employed in less critical applications, these fuels comprise additives for reduced risk of liquid fuel icing or explosion of fuel vapor at different temperatures.
In the last couple of decades, with the increasing consumption of kerosene to operate thousands of aircraft, the aviation industry has been generating millions of tons of CO2 emissions. This has in turn increased the importance of alternative energy sources for energy security and limiting negative environmental impact. In consequence, the aviation fuel industry is expected to gain traction in the near future, mainly ascribing to the surging governmental support for more sustainability and locking the industry’s climate goals. Of late, multiple fuel-related research activities are underway to alleviate the negative emissions lifecycle while barring significant changes to the fuel supply systems and engines.
The rising emphasis of several commercial airlines on plummeting the net zero carbon emissions is expected to pave the way for increased market growth. To illustrate, in August 2022, Alaska Airlines inked an agreement with Gevo Inc., a well-known biofuel company to make a significant investment in sustainable aviation fuel (SAF). The airline purchased its most substantial SAF offtake commitment to tap 185 million gallons over five years starting in 2026.
Increase in investments to assist aviation fuel market development in the commercial sector
The commercial aviation industry is long witnessing an evolution with regards to the usage of kerosene-based fuels to more sustainable options. If estimates are to be believed, over 437,660 commercial flights are operated with the help of sustainable aviation fuel since 2011. The industry has also set long-term goals for CO2 emission reduction, in midst of managing an operational as well as economic recovery from COVID-19.
The increasing attention of some of the prominent fleets of airlines on investment strategies is anticipated to increase fuel proliferation. To illustrate, in June 2022, Qantas Airways partnered with Airbus to invest up to $200 million in accelerating the development of the sustainable aviation fuels industry across Australia to embrace the airline’s goal of lowering carbon emissions.
Rising technological advancements and other production initiatives are also assisting in catering to the growing fuel demand from the airlines. For instance, in September 2021, Chevron Corp announced its plans of producing a test batch of SAF and selling it to Delta Air Lines at the Los Angeles International Airport. The initiative is a part of a partnership between Delta and Chevron and Google and aims to leverage cloud technology to track SAF test batch emissions.
North America to emerge as a revenue-generating hub for the aviation fuel industry
The rapidly burgeoning preference for air travel and the surging consumer spending are paving the way for increased fuel adoption in North America. The IATA (International Air Transport Association) suggests that the air transport industry, comprising airlines, and its supply chain is estimated to support $641 billion of GDP in the U.S. According to the FAA (Federal Aviation Administration), aviation gasoline (avgas) is the most used aviation fuel in piston-engine aircraft. The thriving attention of major U.S. passenger and cargo carriers toward net-zero carbon emissions has also steered the rise in the number of various fuel-oriented initiatives.
The growing government support for curbing emissions across the transport sector is acting as a significant booster for the ramped-up production of aviation fuels. In September 2021, the airlines in the U.S. pledged to deploy 3 billion gallons by 2030, following a commitment from the White House for funding, producing, and incentivizing aviation biofuel. In another instance, in June 2022, Southwest Airlines Co. invested in SAFFiRE Renewables, as part of the project backed by the Department of Energy (DOE) for developing and producing scalable, sustainable aviation fuel.
In a nutshell, the aviation industry is making vast investments in innovative fuel concepts to provide environmental benefits, while solutions, including lower-carbon aviation fuels and hydrogen, are still under research and development. SAF is increasingly opted by most airlines as it is known to reduce emissions by over 80% during its full lifecycle. This is because it releases fewer conventional pollutants, sulfur oxides and particulates, carbon monoxide, and unburned hydrocarbons. Significant improvements in battery technologies for electric flight are also on the rise. As more and more fuel efficiency programs come to the forefront, aviation fuels will witness escalating demand in the forthcoming years.