SAF Industry at a Glance
February 14, 2025
The key SAF market developments in February 2025 include:
Following the Biden administration’s January guidance on the new CFPC 45Z tax credit which precludes imported feedstocks for qualifying SAF and RD, (except for tallow from all countries, rapeseed oil from Canada, and sugarcane from Brazil), we have now entered a period of consultation. Expect adjustments which benefit first tier US feedstock suppliers, such as the inclusion of US woody biomass for FT/Gasification routes, but not those which do not, such as UCO imports.
The Trump administration approved the disbursement of the first part of the Montana Renewables DOE LPO $1.44 billion loan for the increase in biofuels capacity, including SAF. This points towards the administration’s likely stance on loans and subsidies for biofuel production which is deemed to contribute to the stated objective of US energy dominance.
Germany revealed that its electric vehicle (EV) sales fell 27.4 percent in 2024 compared to 2023 after the removal of government subsidies at the end of 2023. This has important implications for all subsidized green industries.
Neste, the world’s largest producer of SAF reported ‘unacceptable’ 2024 earnings, especially in its renewable fuels business, announced that it would cut its workforce by 10%, and said that it expects the renewable fuels market to remain oversupplied and volatile in 2025.
In the US, January SAF market price premiums to Jet remained broadly stable resulting in higher SAF prices as Jet prices increased. HEFA SAF margins decreased as cost increases outweighed price increases, but EtJ SAF theoretical margins improved.
In January we have seen CI-related SAF pricing becoming more widespread. The reduction in CO2 emissions for a unit of SAF versus a unit of conventional aviation fuel is increasingly being used to price SAF molecules despite the fact that most US SAF markets still operate primarily on the basis of prices for a 70/30 JET/SAF blend. The UK’s introduction of a SAF CI-based certificate program will accelerate this.
Green Star BCS have developed a proprietary long term price forecast for SAF comprising a price floor based on alternate production of Renewable Diesel, and a price ceiling developed from long term jet fuel prices. This analysis is explained in detail in our SAF Price Outlook section.
Our detailed modelling of medium-to-long-term SAF costs or production, prices and margins based on HEFA and EtJ units, shows an increasingly challenging position for SAF producers in the coming years.
The UK CI-based certificate program makes low carbon intensity pathways to SAF increasingly attractive for investors in the short term. However, the UK’s relatively modest aspirations for eSAF volumes, and relatively low penalties for failing to meet eSAF mandates compared to SAF mandates, could make this segment unattractive.
Prices for feedstocks Soybean Oil, Tallow, UCO and DCO all increased in January and are still rising in February, faced with the prospect of less competition from imported UCO as a renewable fuel feedstock.
It is possible that the US will switch from a net SAF importer to a net exporter this year.