Analysis-Asia's green jet fuel ambitions exceed demand, heralding exports

Trixie Yap

Sun, Mar 16, 2025, 10:54 PM 5 min read

By Trixie Yap

SINGAPORE (Reuters) - Asia's quality to proviso sustainable aviation substance volition outpace determination request this twelvemonth and adjacent arsenic much accumulation comes online, expanding exports and perchance lowering prices for the fuel, lipid executives and analysts said.

Planned SAF accumulation could instrumentality a deed if determination request remains tepid and prices autumn beneath accumulation costs, manufacture sources say, though Asia's accrued capableness is bully quality for airlines that person been complaining SAF is excessively costly and hard to source.

At slightest 5 SAF projects successful Asia, extracurricular of China, person started up oregon are earmarked to commencement accumulation this year, targeting exports regionally and to Europe.

Unlike successful Europe, wherever flights departing EU and UK airports indispensable present usage 2% SAF successful their tanks, Asia's mandated request remains debased with compulsory usage of the renewable substance successful immoderate nations to commencement lone aboriginal this decade.

Low depletion and a deficiency of argumentation guidance person led to delays of immoderate SAF projects successful China.

"Asian airlines are inactive much focused connected ramping up flights and SAF is not a apical precedence fixed it is inactive costlier than pitchy substance and airlines volition marque little profit," said Shukor Yusof, laminitis of aviation consultancy Endau Analytics.

Aviation accounted for 2.5% of planetary c emissions successful 2023. SAF, made from discarded lipid and biomass, is cardinal toward reducing those emissions, but is costlier than accepted substance and lone accounted for 0.3% of planetary pitchy substance production, planetary airlines assemblage IATA said.

The Asia-Pacific region's SAF accumulation capableness is acceptable to scope 3.5 cardinal metric tons per twelvemonth (77,671 barrels per day) by end-2025, forecasts from Argus Consulting showed, versus 1.24 cardinal tons successful 2024.

However, the archetypal compulsory usage of SAF successful Asia volition not statesman until 2026 erstwhile Singapore and Thailand enforce a 1% mandate. These requirements are expected to assistance SAF request from these countries to astir 14% of their accumulation capableness by 2026, Reuters calculations based connected commercialized information showed.

Anticipated accumulation capableness does not mean that overmuch SAF volition really beryllium produced fixed an manufacture absorption connected profitability and existent demand.

IATA said 1 cardinal tons of SAF was produced globally successful 2024, beneath forecasts of 1.5 cardinal tons, and described accumulation arsenic disappointingly slow.

Recent task delays constituent to a precise existent hazard that SAF penetration whitethorn really statesman to autumn adjacent arsenic request grows, said Ellis Taylor of aviation analytics steadfast Cirium.

South Korea's 1% SAF usage volition commencement successful 2027, and Japan has a 10% mandate by 2030.