Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment

The report identifies a significant gap between projected 2030 SAF demand (17.1 Mt/a) and current capacity, estimating that an additional 5.8 Mt/a of capacity must reach final investment decisions by 2026. It details the capital expenditure (CapEx) requirements across four primary technological pathways—HEFA, Alcohol-to-Jet (AtJ), Gasification-Fischer Tropsch (G-FT), and Power-to-Liquid (PtL)—with total investment needs estimated between $19 billion and $45 billion by 2030. The document outlines the five-phase project lifecycle of a SAF refinery and the associated policy, market, technology, and feedstock risks. To mitigate these, it proposes ten financial levers, including research grants, multilateral development bank support, long-term offtake agreements, and green bonds, supported by case studies from entities such as LanzaJet, IAG, and Neste.

• Global demand for SAF is projected to reach 17.1 million tonnes per annum (Mt/a) by 2030, which is approximately 5% of total jet fuel demand. This demand is driven by government mandates and targets in regions including the EU, UK, Brazil, and Korea, as well as voluntary airline commitments.
• There is a projected supply gap for 2030; while installed capacity by the end of 2024 is likely 4.4 Mt/a, an additional 5.8 Mt/a of production capacity is required to meet demand. This new capacity must secure final investment decisions (FID) by 2026 due to the four-to-six-year development timeline for greenfield facilities.
• The total capital expenditure (CapEx) required to meet 2030 SAF demand is estimated between $19 billion and $45 billion, depending on the technology mix used. HEFA is the least CapEx-intensive pathway, while Power-to-Liquid (PtL) is the most expensive.
• Four primary SAF production pathways exist with varying maturity and costs: HEFA is the most mature and cost-effective; Alcohol-to-Jet (AtJ) is attractive in ethanol-rich regions but has higher costs than HEFA; Gasification-Fischer Tropsch (G-FT) is CapEx-intensive due to complex solid feedstock handling; and Power-to-Liquid (PtL) has the highest CapEx due to its reliance on renewable electricity and CO2 capture.
• The SAF refinery lifecycle consists of five phases: conceptualization, pre-feasibility, FID, construction, and commissioning. The journey from conceptualization to FID typically takes two-and-a-half to five years, followed by two to three years to reach commissioning.
• Investment in SAF is hindered by four main risk categories: policy risk (e.g., inconsistent mandates), market risk (e.g., price volatility), technology risk (e.g., maturity of first-of-a-kind plants), and feedstock risk (e.g., availability and sustainability of oils/fats).
• Ten financial levers are proposed to mobilize investment: research/innovation grants, multilateral development bank (MDB) support, guarantees/insurance, strategic industry investments, long-term offtake agreements, book-and-claim mechanisms, private equity, infrastructure investors, tolling models, and green bonds.
• Long-term offtake agreements are critical for reaching FID as they provide predictable revenue and reduce demand uncertainty. Lenders typically require 70-80% of annual capacity to be covered by such agreements, and some require 100%.
• Book-and-claim systems allow for 'carbon insetting' by decoupling the environmental attributes of SAF from the physical fuel, enabling corporate travellers and shippers to fund the green premium and diversify revenue streams for producers.
• A tolling model, though currently theoretical for SAF, could mitigate market risk by charging a fixed fee for refinery capacity while customers supply feedstock and retain ownership, potentially lowering the cost of debt financing.

APA

World Economic Forum (2025). Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment. https://reports.weforum.org/docs/WEF_Financing_Sustainable_Aviation_Fuels_2025.pdf

Chicago

World Economic Forum. Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment. 2025. https://reports.weforum.org/docs/WEF_Financing_Sustainable_Aviation_Fuels_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment |date=February 2025 |url=https://reports.weforum.org/docs/WEF_Financing_Sustainable_Aviation_Fuels_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025financing, author = {{World Economic Forum}}, title = {{Financing Sustainable Aviation Fuels: Case Studies and Implications for Investment}}, institution = {World Economic Forum}, year = {2025}, month = feb, url = {https://reports.weforum.org/docs/WEF_Financing_Sustainable_Aviation_Fuels_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }