Bain & Co: How to Address Europe's Upcoming SAF Shortfall
Is there any way to decarbonise the aviation industry?
That's what global consultancy firm Bain & Company is asking in its latest piece of research.
"It’s no secret that the global sustainable aviation fuel market is facing a supply crunch, but the magnitude of the challenge is larger than many might realise," says Valeria Sterpos, Partner and Member of the Energy & Natural Resource Practice at Bain & Co.
According to this new research, demand for sustainable aviation fuel - that elusive silver bullet - is going to outstrip supply within the next five years in Europe.
With all other industries making good progress towards decarbonisation, it's obvious that the development of SAF is a top priority for airlines. However, it's about to become a requirement that they must fulfil, rather than a goal they hope to reach.
EU regulations mandate that, by 2030, 6% of all fuel at European airports must be SAF, rising to 20% by 2035 and 70% by 2050.
However, as Bain & Co shows in its report, the continent’s supply is projected to fall nearly 20% short of its mandated needs by 2030. It's possible that this lack of supply will drive up the price of SAF, which presents a huge challenge for airlines who may also be liable to pay carbon prices for their more traditional fuels.
The scale of the SAF shortfall
While Europe’s leadership in SAF adoption is undeniable, the scale of the supply challenge is significant. By 2030, the local supply gap is expected to equal roughly 10 million acres of oilseed-bearing over-winter crops - the kinds that are used as feedstock for biofuels like SAF.
To put this into perspective, this acreage is equivalent to the annual US cotton crop. What's more, these crops can only be planted once every three years, which pulls the size of the problem into sharp focus.
The EU’s progressive stance on SAF — banning first-generation fuels derived from food crops like corn and soybeans and capping biofuels made from used cooking oil and animal fats — only compounds the complexity of closing this gap.
Alternative feedstocks, such as novel oil crops grown on degraded land, offer potential solutions but require significant scaling efforts.
“Europe will need to turn to global imports to close a nearly 20% gap between local SAF supply and regulated demand by 2030,” the Bain & Co report states.
Technological pathways: Hope on the horizon
Emerging technologies offer some hope for mitigating Europe’s SAF shortfall, but they remain in their infancy.
Alcohol-to-jet (ATJ) processes, which utilise cellulosic crops and agricultural residues, and the Fischer-Tropsch (FT) process, which converts biomass into liquid fuels, are promising avenues. However, these technologies face hurdles related to scalability and commercial viability.
Current project pipelines indicate that, at best, only small-scale ATJ and FT projects will be operational in Europe by 2030. Investment in these areas needs to accelerate dramatically if they are to become significant contributors to SAF supply.
Electro-SAF: A new frontier
Another innovative pathway lies in electro-SAF production, powered by renewable energy. The EU’s blending mandates, which require electro-SAF to make up 1.2% of total aviation fuel by 2030, act as a critical catalyst for this nascent technology.
Yet, its development is hampered by high costs and technical challenges. Bain & Company estimates that unlocking the potential of electro-SAF will require over US$10bn in investment to fund the five to 10 projects needed to meet 2030 demand.
Europe will need to turn to global imports to close a nearly 20% gap between local SAF supply and regulated demand by 2030.
The role of imports
Given the constraints on local production, imports will play an indispensable role in bridging the SAF supply gap.
Feedstock imports—from oil crops to advanced biofuels—will be critical. As global suppliers look to fill this void, they face a lucrative opportunity to secure a foothold in the European market.
For producers outside the EU, the demand surge offers a chance to lead in supplying advanced feedstocks or pioneering scalable SAF technologies.
The ability to meet Europe’s stringent sustainability criteria will be a key differentiator for those vying to capture market share.
The road ahead: Scaling urgency and investment
Looking beyond 2030, the stakes grow even higher. Bain & Company projects that local demand for SAF in Europe will quadruple between 2030 and 2040, with 2050 demand surging to eight times the 2030 level.
Achieving these targets will necessitate not just incremental improvements but transformative advancements in feedstock production and fuel technology.
Urgency is critical.
The global SAF supply race is on, and Europe’s widening gap offers both a warning and an opportunity.
By investing in cutting-edge technologies and expanding feedstock sources now, suppliers can position themselves to thrive in an increasingly competitive and high-demand landscape.
As Bain & Company says in its report: “It will take urgency and an investment exceeding US$10bn to unlock the 5 to 10 projects required to meet 2030 regulated demand.”
So, the question for industry leaders is not whether to act, but how quickly they can rise to the occasion.
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