Industry experts predict that Asia will have sustainable aviation fuel (SAF) production capabilities that outstrip regional demand in the upcoming years which will result in greater exports along with reduced prices. New sustainable aviation fuel projects emerging in different parts of Asia have driven regional production to surge.

Advertisment

Increased production capacity receives praise from airlines needing cheaper and more available SAF but questions emerge about future availability and its overall effect on viable projects. The existing SAF policy requirements for European and British Union airports mandate 2% SAF use but most Asian countries have postponed their mandatory requirements until the end of this decade.

The variation between countries' sustainability policies has caused some delays to Chinese SAF projects alongside overall regional lack of demand for SAF. Shukor Yusof from Endau Analytics declared that Asian carriers remain focused on flight expansion over SAF adoption because it costs more than traditional jet fuel while earning airlines reduced profits.

Also Read | Delhi government bans refueling of vehicles older than 15 years. Here's all you need to know

Advertisment

SAF production capacity in the Asia-Pacific region is predicted to surmount 3.5 million metric tons annually by 2025 while maintaining its starting point at 1.24 million tons in 2024. Market conditions together with profitability factors determine the actual production levels.

Asia's initial mandatory SAF requirement will start in 2026 when Thailand and Singapore become the first two countries to enforce the 1% quota. South Korea plans to implement the SAF mandate in 2027 whereas Japan is scheduled to introduce it in 2030.

Analysts in the industry believe inconsistent policies across the region will cause supply to exceed demand expectations. Lower SAF project profitability might occur due to lower prices stemming from this condition.

Advertisment

"Demand in Asia is expected to lag behind supply due to the absence of uniform policies and mandates across the region," said Lamberto Gaggiotti, the head of biofuels firm Apical's green energy business.

Despite these challenges, the growth in SAF production capacity in Asia represents a positive step towards reducing aviation's carbon footprint. The availability of more SAF could potentially drive down prices and encourage greater adoption by airlines.