Risk may be the biggest barrier to scaling sustainable aviation fuel

Sustainable aviation fuel (SAF) is widely recognised as one of the most important tools available to aviation as it works to decarbonise. It is expected to deliver a large share of emissions reductions in the coming decades. 

Yet despite growing policy support and strong demand signals from airlines, SAF production remains far below the levels required to meet aviation’s climate targets. 

Increasingly, the answer comes down to risk. 

Across the industry we are seeing dozens of promising SAF projects announced around the world. But far fewer are reaching Final Investment Decision (FID) and moving into construction. The challenge is not a lack of ambition or innovation. It is the complexity of risk across the SAF value chain. 

To reach FID, developers must demonstrate clarity on capital costs, operating costs, production volumes and revenues. Just as importantly, they must show that the key risks across the project have been understood and managed. 

Technology is often the most visible concern in emerging sectors like SAF. While some production routes are already established, others are still progressing from demonstration to early commercial deployment. 

However, not all technologies carry the same level of uncertainty. 

Fischer-Tropsch (FT) synthesis is a good example. The process has been used in industrial fuel production for more than a century, providing a well understood route for converting synthesis gas into liquid hydrocarbons. 

What makes it particularly interesting for SAF is its feedstock flexibility. When combined with gasification, it can convert municipal solid waste, agricultural residues and forestry byproducts into fuels. When integrated with low-carbon hydrogen and captured carbon dioxide, the same synthesis route can also be used to produce power-to-liquid fuels. 

This flexibility is valuable because feedstock availability varies widely by region. Technologies that can adapt to local resources while still producing aviation-grade fuels will play an important role as SAF production scales. 

Even with proven technology, projects cannot succeed without reliable feedstock supply and stable demand. 

Developers must secure long-term feedstock agreements and ensure plants are located where supply chains are reliable. At the same time, investors need confidence that the fuel produced will be sold. 

This is why long-term offtake agreements between SAF producers and airlines are becoming increasingly important. These agreements provide visibility over future demand and help improve project bankability. 

Policy is another critical factor. 

Mandates and incentives are helping to create demand for SAF, but investors need confidence that these frameworks will remain stable over the lifetime of a project. Sudden changes to regulation can undermine project economics and delay investment. 

SAF projects involve a wide range of stakeholders, from developers and technology providers to airlines, financiers, insurers and policymakers. 

Bringing these groups together early in the development process is often the difference between projects that progress and those that stall. 

The aviation sector increasingly agrees that SAF will play a central role in achieving the energy transition targets. But turning that ambition into operational capacity will require the industry to understand, manage and allocate risk across the entire value chain. 

Those projects that can do this successfully will be the ones that move from concept to construction.