Electro-sustainable aviation fuel (e-SAF) is projected to supply more than 40% of total sustainable aviation fuel (SAF) demand by 2050, positioning it as a cornerstone of long-term aviation decarbonization. However, the pathway from projection to production remains highly uncertain. No commercial-scale e-SAF facility is currently operational, and project pipelines face mounting economic and infrastructure constraints that could create supply bottlenecks well before 2030.
Production economics remain the central barrier. Current estimates place e-SAF costs at up to 12 times the price of conventional jet fuel. The primary cost drivers include renewable electricity, green hydrogen production, CO₂ capture and capital-intensive plant construction. According to IATA Sustainability and Economics and Worley Consulting, renewable electricity alone can represent as much as two-thirds of total production costs, effectively determining geographic viability.
From a purely economic standpoint, e-SAF projects are most competitive in regions with abundant, low-cost renewable energy. Yet announced capacity does not align with this logic. Of the 46 commercial-scale e-SAF projects announced globally, 40 are located in Europe — a region characterized by comparatively high electricity prices. The Nordic countries are a partial exception due to lower-cost hydroelectric resources.
By contrast, regions with structurally cheaper renewable energy — including North Africa, the Middle East, India and Brazil — have attracted limited project announcements. This mismatch reflects the dominance of policy-driven investment signals over cost fundamentals. Analysts note that European mandates under EU and UK frameworks have incentivized project announcements, but none of the European facilities has reached a final investment decision (FID). Globally, only one e-SAF project has achieved FID and is under construction in the United States.
The gap between regulatory ambition and project economics is widening. Green hydrogen production, a core input for e-SAF, requires substantial and continuous renewable power. At the same time, electricity demand from data centers and artificial intelligence infrastructure is rising rapidly, tightening supply and reinforcing price volatility. Regions with structurally lower electricity costs possess a theoretical advantage, yet capital deployment remains concentrated in higher-cost jurisdictions.
Capital intensity further complicates deployment. Beyond renewable power, e-SAF facilities depend on scalable CO₂ sourcing networks and integrated hydrogen infrastructure. These inputs increase upfront investment and execution risk.
SAF Growth Falls Short of Decarbonization Trajectory
Even beyond e-SAF, total SAF supply remains far below aviation’s decarbonization pathway. IATA estimates global SAF production reached 1.9 million tonnes in 2025 — approximately double 2024 output — but still equivalent to only 0.6% of global jet fuel consumption. Production is projected to increase to 2.4 million tonnes in 2026, representing just 0.8% of demand.
The cost premium remains significant. At current price levels, SAF is estimated to add US$3.6 billion to airline fuel expenditures in 2025. Prices are expected to remain two to five times higher than fossil jet fuel through 2026, depending on region and incentive structures.
“We expect SAF to retain a significant premium over conventional jet fuel into 2026, often two to five times fossil, depending on region of supply and incentives,” said Travis Cobb, EVP Global Network Operations and Aviation, DHL Express. “Limited capacity, feedstock constraints and policy design drive this, with scale-up offering only modest relief.”
Today’s SAF market is dominated by the HEFA pathway, which benefits from ASTM certification and established waste-oil feedstocks. However, HEFA faces structural scaling constraints due to limited feedstock availability and blending ceilings. Advanced pathways — alcohol-to-jet, Fischer-Tropsch and power-to-liquid — face technology maturation risks, financing complexity and electricity bottlenecks.
Policy Signals, Capital Discipline and Regional Divergence
Policy mechanisms such as CORSIA and Science Based Targets frameworks shape demand expectations and corporate procurement strategies. However, mandates alone have not translated into bankable commercial-scale deployment. The absence of FID progress in Europe’s e-SAF pipeline underscores the limits of regulatory ambition without competitive cost structures.
Investor scrutiny is intensifying. “Cost is one of the biggest challenges for SAF adoption, and that won’t magically disappear in 2026,” said Alexei Beltyukov, CEO and co-founder, Universal Fuel Technologies. “We expect increasing public and investor pressure on SAF projects to disclose realistic production costs before they receive support.”
Latin America’s Structural Gap
Latin America illustrates the scale of the challenge. According to ALTA, the region currently produces no SAF and has no active commercial projects. This supply gap could increase airline operating costs by an estimated US$318 billion.
Mexico, the region’s second-largest aviation fuel consumer, is projected to account for only 3% of Latin America’s SAF supply by 2050. ALTA Chair Roberto Alvo has emphasized that SAF must complement — rather than substitute — broader decarbonization strategies, including operational efficiency and fleet modernization.
