Technological Innovations in Jet Fuel Alternatives

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Policy clarity and financial incentives are essential. Two major policy dynamics are shaping global SAF investment:

ReFuelEU Aviation (European Union)

The EU’s Aviation Alternative Fuel regulation creates binding blending obligations and ramp-ups for SAF at EU airports. It’s part of the EU’s Fit-for-55 effort and requires increasing shares of SAF offered by fuel suppliers, pushing demand via regulatory obligation rather than voluntary procurement. This long-term regulatory certainty in the EU is catalyzing investments and offtake agreements across feedstock and e-SAF projects. ReFuelEU is central to the EU’s strategy to build a SAF market and is a major pull factor for producers targeting European supply. 

United States: incentives and Section 45Z

In the U.S., federal policy has leaned on financial incentives rather than a national SAF blending mandate. The federal Section 45Z (Clean Fuel Production Credit) offers a per-gallon tax credit tied to lifecycle GHG reductions for qualifying fuels, including SAF. IRS and Treasury guidance has clarified eligibility and registration rules. This kind of credit improves the business case for SAF facilities in the U.S. by lowering the net cost gap and encouraging new capacity. States such as California supplement federal incentives with programs like LCFS credits, improving economics further for SAF producers selling in those markets. 

Other policy mechanisms and blended finance

Other policy tools that matter: low-emission fuel procurement by governments, public-private project finance, de-risking instruments (loan guarantees), carbon pricing, and corporate offtake agreements (airlines, shippers, corporates buying SAF). Multilateral development banks and climate-focused funds are starting to support SAF projects using blended public and private capital structures that can lower financing costs and accelerate buildout.

Why policy stability matters

Investors need predictable multi-year rules. The EU’s long-term mandate and detailed SAF sustainability criteria provide a relatively clear policy pathway; by contrast, shifting or short-term U.S. policy can raise investor caution. The combination of mandates (create demand certainty) and incentives (improve economics) is the strongest signal for rapid scale-up. 

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