Covid-19 Pandemic: Perfect Opportunity To Address Price Gap Between Jet And Sustainable Aviation Fuel

The growing aviation fuel industry has developed a thirst for sustainable aviation fuel (SAF). Thanks to incentive programs from various governments and self-governance by airlines, the SAF industry has quickly become the highest growing industry.

According to Allied Market Research, the global aviation fuel market is expected to hit $238.5 billion by 2026, growing at a CAGR of 3.5% from 2019 to 2026. This is because of increased demand from the military and the advent of sustainable biofuels for aviation. The growing popularity of SAF and dire need to save nature from its degradation, this would be the right time in investing in SAF.

The Covid-19 pandemic has hit the aviation industry harder than ever. The air travel during the pandemic and in the post-pandemic world would center around sanitation and rethink new strategies to prevent infection by integrating sneeze guards and removing the middle seat. However, the world would continue to reevaluate in-flight experiences and we need to address the issue of environmental changes more openly.

According to a survey, U.S. aviation is responsible for around 2.6% of the total domestic greenhouse gas emission. Due to pandemic, we have seen how the international travel ban has been fruitful for the earth’s atmosphere. Thus, the post-pandemic, the world should invest more in SAF and this is the perfect time for developing a post-pandemic recovery plan for the aviation industry.

Sooner or later, the ban on international travel would revoke and the nod toward a SAF would become necessary for the greener future. In fact, more than 40 airlines have already invested and implemented SAF on some level and it is expected that over 200,000 commercial flights have been using SAF since 2011. In addition, the order for 1.6 billion gallons for SAF places to continue the purchase agreements.

This means, the SAF is already in place and would gain more and more importance in the future as it powers the aircraft with lesser greenhouse gas emissions. This is vital for the communities located around airports, especially in developing nations.

In 2020, Neste started commercial sales of SAF in the U.S. and it has delivered its first shipment to California. This deal has been beneficial for both the company and the U.S. On the other hand, airlines and fuel producers seem to work perfectly to develop a profitable market for SAF and develop new policies that suitable for a greener future. For now, the SAF is considered as a supplement to the existing emission policies that deal with ground transportation.

However, the is a challenge of cost. The prices of conventional aviation fuels are constantly increasing and are expected to rise. The cost of aviation fuel is the biggest cost for the industry and the cost of SAF is even higher than conventional jet fuel. Thus, there need careful policies that offer a reasonable price on carbon to resolve the issue of the price gap between jet fuel and SAF. The ban on air travel due to pandemic is a perfect opportunity to take time and address such issues and talk openly about developing federal policies to encourage the use of SAF in the future.