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Europe Renewable Aviation Fuel Market - Growth, Trends, and Forecasts (2023-2028)

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  • 100 Pages
  • April 2023
  • Region: Europe
  • Mordor Intelligence
  • ID: 5529836
The market for renewable aviation fuel in Europe is expected to grow at a CAGR of over 55% during the forecast period.

COVID-19 negatively impacted the market in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

  • Supportive government policies, such as the introduction of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) by the ICAO (International Civil Aviation Organization), are expected to boost the market. Additionally, potential economic advantages along with the long-term growth in the aviation industry, such as the increasing number of air passengers, on account of cheaper airfare, and stronger economic conditions with increasing disposable income, are the significant factors that are expected to drive the market during the forecast period.
  • On the other hand, the high cost of renewable aviation fuels is expected to hinder market growth.
  • Increasing concerns over emissions from the airline industry and government initiatives in developed economies to reduce airline emissions are expected to provide significant opportunities for renewable aviation fuel in the future.
  • Germany is expected to witness significant demand during the forecast period, owing to the aviation initiatives taken by the government for the development of SAF (Sustainable Aviation Fuel).

Europe Renewable Aviation Fuel Market Trends

Commercial Sector to be the Largest Segment

  • In the first half of 2022, air passenger transport in the European Union (EU) carried more than 338 million air passengers. Countries such as the United Kingdom, Germany, Spain, France, and Italy, accounted for a major share of air passenger count in 2021.
  • Owing to the air passenger traffic growth in 2021, the greenhouse gas emissions from the region’s aviation sector are considered one of the fastest-growing sources of emissions that contribute to climate change. As of 2021, Europe is one of the leading regions in biofuel production technologies, with a significant number of production plants under operation. The production capacity of bio-based aviation fuel in the region depends on a small number of plants, accounting for a maximum potential output of approximately 2.3 million metric tons per year.
  • The European Commission (EC), in coordination with Airbus, leading European airlines, such as Lufthansa, Air France, and British Airways, and key biofuel fuel producers, such as Neste and Biomass Technology Group, launched an initiative in 2011 called the European Advanced Biofuels Flight Path, to speed up the commercialization of aviation biofuels in Europe.
  • As of 2021, the industry mainly focuses on reducing overall fuel usage and improving fuel efficiency. However, further reduction of greenhouse gas emissions, particularly in the face of new regulations, is set to come online in the next few years and is expected to lead the industry in taking the next step, embracing renewable jet fuels.
  • To address the increasing concerns regarding rising aviation emissions, IATA has urged all major players in the industry to work on the development of sustainable solutions, which has led to the identification of renewable jet fuel as one of the most promising strategies to reduce greenhouse gas emissions. This has paved the way for companies, such as Nestle, to gain an increasingly substantial role in the aviation sector.
  • In January 2022, ExxonMobil and Neste announced a supply agreement for commercial-scale distribution of Neste MY Sustainable Aviation Fuel at the largest airports in France. The Neste MY Sustainable Aviation Fuel is produced from sustainably-sourced, 100% renewable waste and residue raw materials, such as used cooking oil and animal fat waste, and when used at 100% concentration, the Sustainable Aviation Fuel use results in up to 80% lower greenhouse gas emissions as compared to fossil jet fuel use. This step is taken to match the 1% SAF mandate introduced by the French government effective from January 1, 2022
  • Therefore, based on the factors mentioned above, the commercial sector is expected to drive the Europe Renewable Aviation Fuel Market during the forecast period.

Germany to Witness Significant Demand

  • Founded in 2011, the Aviation Initiative for Renewable Energy in Germany (AIREG) aims to promote the country's research, production, and usage of sustainable aviation fuels. Members of AIREG include universities, research institutions, plant manufacturers and operators, petroleum companies, engine and aircraft manufacturers, airports, and airlines.
  • The usage of sustainable aviation fuels in Germany is expected to be huge, and hence, the AIREG has set targets of reaching a 10% blend for SAF implementation by 2025.
  • In December 2021, British Airways announced that it had signed a multi-year agreement with the Phillips 66 Company to supply sustainable aviation fuel to the airlines by 2022. The initiative is in line with the aircraft operator’s goal of achieving zero carbon emissions by 2022.
  • As of 2021, Europe is one of the leading regions in terms of biofuel production technologies, with a significant number of production plants under operation. The production capacity of bio-based aviation fuel in the region depends on a small number of plants, accounting for a maximum potential output of approximately 2.3 million metric tons per year.
  • In June 2022, Germany carried 16265 thousand of passengers. There is an increase of 2.14% as compared to June 2021 carried 5165 thousand passengers.
  • Therefore, based on the above-mentioned factors, Germany is expected to witness significant demand in the renewable aviation fuel market during the forecast period.

Europe Renewable Aviation Fuel Market Competitor Analysis

The Europe Renewable Aviation Fuel Market is consolidated. Some of the major players (not in particular order) include Total Energies SA, Neste Oyj, Honeywell International Inc., Swedish Biofuels AB, and Fulcrum BioEnergy Inc.

Additional benefits of purchasing the report:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

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Table of Contents

1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
4.1 Introduction
4.2 Market Size and Demand Forecast in USD billion, till 2027
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.2 Restraints
4.6 Supply Chain Analysis
4.7 Porter's Five Forces Analysis
4.7.1 Bargaining Power of Suppliers
4.7.2 Bargaining Power of Consumers
4.7.3 Threat of New Entrants
4.7.4 Threat of Substitutes Products and Services
4.7.5 Intensity of Competitive Rivalry
5.1 Technology
5.1.1 Fischer-Tropsch (FT)
5.1.2 Hydroprocessed Esters and Fatty Acids (HEFA)
5.1.3 Synthesisized Iso-Paraffinic (SIP) and Alcohol-to-Jet (AJT)
5.2 Application
5.2.1 Commercial
5.2.2 Defense
5.3 Geography
5.3.1 Germany
5.3.2 France
5.3.3 United Kingdom
5.3.4 Rest of Europe
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Total Energies SA
6.3.2 Neste Oyj
6.3.3 Swedish Biofuels AB
6.3.4 Honeywell International Inc.
6.3.5 Gevo Inc.
6.3.6 Fulcrum BioEnergy Inc.
6.3.7 LanzaTech Inc.

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Total Energies SA
  • Neste Oyj
  • Swedish Biofuels AB
  • Honeywell International Inc.
  • Gevo Inc.
  • Fulcrum BioEnergy Inc.
  • LanzaTech Inc.