Beyond regulation: navigating the global voluntary market for SAF

It’s safe to say that the market for sustainable aviation fuel (SAF) has taken off; we’re seeing a truly global market emerge with SAF production and consumption across multiple continents. From a global production output of about 25 million gallons in 2020, we’re now looking at a market of more than 20x that output, with production capacity at double that number. SAF is no longer just a proof of concept; it is embraced as the primary solution to realize the energy transition in aviation, in favor of alternatives to liquid fuel (battery- or hydrogen-powered flight) that are difficult to scale.

Reality check: SAF still only represents 0.6%-0.8% of the total global jet fuel market. A lot more effort is necessary to scale the SAF industry to 2030, 2040, and 2050 targets.

The SAF market is currently mainly driven by governmental SAF-use mandates (the stick approach) and by incentives, subsidies, and tax breaks (the carrot). We call this the regulated market for SAF, where SAF use is encouraged and facilitated to increase the mix of renewable energy use in aviation. Both approaches seem to be effective, although there is always debate on the best approach. For obvious reasons, airlines prefer the carrot approach, and SAF producers the stick.

But there is also a voluntary market for SAF, which covers the demand from airlines and customers of airlines (businesses and consumers) who want to do their share in accelerating the energy transition in aviation, and have self-imposed emission reduction targets, sometimes inspired by initiatives such as Science Based Targets Initiative (SBTi) or by their peers. Many leading airlines have SAF use targets of 10% by 2030, and many businesses have ‘net zero’ targets by 2030 or 2035. These targets typically go well beyond the ambition level of SAF mandates or incentives. Although modest in size, this voluntary market represents additional demand on top of the volumes used for regulatory compliance.

The Regulated Market

SAF mandates today – mainly in the EU and the UK – require minimum levels of SAF use and include penalties for non-compliance. Through the ReFuelEU Aviation regulation, the EU implemented a 2% SAF use mandate from 2025, growing to 6% in 2030 to eventually 70% in 2050 (with steps in between). The UK has a similar but more gradual growing SAF mandate, from 2% in 2025 to 10% in 2030 (3.6% in 2026), with a HEFA^[1] cap to encourage 2nd generation SAF production and use. Apart from these key SAF mandates, we are watching Singapore (1% target starting in 2026), Japan (10% by 2030), and India (1% for international flights by 2027) closely as they finalize their legal frameworks. In the EU, there are also ways for airlines to capture incentives on SAF use, such as through the reduced need to buy ETS (EU emission rights), and through a fund that rewards airlines with free allowances for SAF use.

The U.S. market is different from the EU and the UK as it does not have a SAF mandate, but rather a soft target to reach 10% SAF in 2030 as outlined in the SAF Grand Challenge.^[2] The U.S. is an incentive market, with the availability of LCFS credits, RINs, the 45Z tax break, and state-specific production or use credits on the books in Illinois, Washington, Nebraska, and Minnesota. As these incentives can be stacked, they reduce the price of SAF for airlines very significantly, leaving only a limited premium gap for airlines to fill, with or without the support of their clients.

The Voluntary Market

Beyond the regulated market, we are seeing the voluntary market for SAF emerge as a mechanism for airlines and fuel producers to derisk their SAF investments by making their corporate clients pay for the (remaining) SAF premium. From the perspective of a corporate buyer, this may be considered a mechanism to reduce their business travel emissions with SAF instead of compensating with cheap (and arguably ineffective) carbon offsets. The first voluntary SAF initiatives looked more like kick-starter projects as there was no actual SAF produced to transact on, but this has slowly evolved with actual SAF transactions happening beginning in 2020. By 2021, a host of brands had completed their first SAF purchases, inspiring many others to follow suit. Today, several major airlines and SAF suppliers are marketing SAF credits to their business customers and private travelers, with various degrees of success.

SAF accounting rules and mechanisms

It remains difficult to match SAF use with the exact flight behaviour of end users. Enter the book-and-claim mechanism – a chain-of-custody accounting model which allows the environmental attributes of the physical SAF to be decoupled, transferred, and retired separately as SAF credits (or certificates) by airlines and business end-users. Thanks to book-and-claim, SAF can be used where it is available, and its quantified emissions reductions are recorded in a registry and sold to customers elsewhere, who “book” a specific volume and exclusively “claim” the associated emissions reductions in their own inventories, subject to robust rules that prevent double counting.

SAF credits are traded in two ‘flavors’, to reduce specific emission categories:

• Scope 1 (Airlines): representing the engine emission reduction of a quantity of SAF
• Scope 3 (Corporations & NGOs): representing the indirect emissions of a business from their staff travel or air cargo activities

The Conundrum of Overlapping Regulatory & Voluntary Claims

The voluntary market is generally regarded as SAF-use above the mandates, as airline-customers may not want to pay for a SAF credit that does not lead to additional SAF use. But there is debate on this, as currently there is no mechanism allowing the emission reductions of mandated SAF to be claimed and reported by the downstream value chain of airlines. For SAF use in the U.S., we see that while LCFS credits and RINs are claimed on SAF volumes (to satisfy a regulatory obligation), these same volumes are often still considered eligible for the creation of voluntary SAF credits. However, not all market players accept this practice.

In the absence of clear guidance from existing greenhouse gas (GHG) and environmental, social, and governance (ESG) standards, the industry has seen several initiatives to standardize the concept of SAF credits through common SAF accounting principles and functional outlines for SAF registries. A variety of SAF registries nowadays manages the bookkeeping for voluntary SAF credits – facilitating the accounting, acting as a central ledger, and guaranteeing adherence to SAF accounting rules through external verification. Although there is a lot of alignment in the market, the various SAF registries existing today do not all align, and SAF accounting practices sometimes differ significantly. No single SAF registry or accounting approach is dominating the market yet, and since double-claiming across registries is still considered a risk, attempts are underway to make SAF registries ‘interoperable,’ facilitating cross-register double-claim checks and even allowing for transfer of volumes between registries.

An ecosystem for SAF credit trading emerges

Apart from the fuel suppliers, and airlines, freight forwarders and traders have become active in the market for SAF credit trading as well, aiming to upsell to their customer base that is already buying other transportation related or environmental products from them. However, being successful in marketing and selling SAF hasn’t proven to be easy. Beyond initial marketing, some players haven’t found success with their SAF programs, and struggle to recoup the premiums they have paid for SAF.

Conclusion

While the voluntary SAF market is clearly gaining momentum, its true potential remains just over the horizon. A successful voluntary market represents more than just a secondary revenue stream for airlines and fuel suppliers: it is the ultimate ‘demand pull’ that can support the industry over the next decade in accelerating the expansion of new capacity, driving utilization of existing capacity, and adding new SAF production pathways.

This is the first article in a three-part series. In our next installment, we will look under the hood at the mechanics that make this market possible: the intricate, often messy world of SAF accounting and the registries tasked with ensuring that every “claim” is as solid as the molecule itself. We’ll also be covering the “holding pattern” the SAF credit space currently faces, awaiting updates from the GHG Protocol and SBTi, on reportability. Finally, in the third part of this series, we’ll cover market reality, volumes, key players and the challenges in successfully marketing and selling SAF credits.

The author of this article, Hugo Boiten, is the Managing Director of SAF Planet, a specialized platform and intermediary dedicated to navigating the complexities of the voluntary Sustainable Aviation Fuel (SAF) market. By bridging the gap between fuel producers, airlines, and corporate SAF buyers, SAF Planet provides custom and tailored solutions to its clients and partners. With a focus on credibility, deep market insight, and rigorous adherence to SAF accounting standards, Hugo and his team help organizations reach their emission reduction and SAF use targets. Hugo is also a Senior Assocciate with Stillwater Associates.