Asia’s Sustainable Jet Fuel Growth Outpaces Demand, Pushing Focus to Exports

At least five sustainable aviation fuel (SAF) projects across Asia—excluding China—are set to begin production this year, with a strong focus on exports to regional markets and Europe. However, domestic demand remains sluggish due to weak policy enforcement.

Unlike Europe, where flights departing EU and UK airports are now required to use 2% SAF, Asia's adoption is moving at a slower pace. Some nations will only begin mandating SAF usage later this decade, leading to production delays in China due to low consumption and unclear regulatory frameworks.

"Asian airlines are currently prioritizing flight expansion, and SAF remains a lower priority due to its higher cost compared to conventional jet fuel, which impacts profitability," said Shukor Yusof, founder of aviation consultancy Endau Analytics.

Aviation accounted for 2.5% of global carbon emissions in 2023. SAF, derived from waste oils and biomass, is considered a crucial tool for emission reduction but remains expensive, making up just 0.3% of total jet fuel production, according to global airline association IATA.

The Asia-Pacific region’s SAF production capacity is expected to reach 3.5 million metric tons per year (77,671 barrels per day) by the end of 2025, up from 1.24 million tons in 2024, according to Argus Consulting. However, the first regional mandates will only take effect in 2026 when Singapore and Thailand enforce a 1% SAF requirement. This will drive local demand to roughly 14% of their production capacity by that year, based on Reuters trade data estimates.

Despite rising capacity, actual SAF output may not match expectations, as producers remain profit-driven and demand remains uncertain. IATA reported that global SAF production in 2024 reached only 1 million tons—well below the projected 1.5 million tons—and described the industry's growth as disappointingly slow.

Project delays raise concerns that SAF market penetration could stagnate or even decline, despite growing demand, said Ellis Taylor of aviation analytics firm Cirium. South Korea plans to introduce a 1% SAF mandate in 2027, while Japan has set a 10% target for 2030.
"Asia’s SAF demand is expected to trail supply due to a lack of consistent policies and mandates across the region," said Lamberto Gaggiotti, head of biofuels at Apical’s green energy division.