SAF Industry at a Glance
June 20, 2025
The key SAF market developments in June 2025 include:
Global market turmoil continued this month with Israel’s missile strikes on Iranian military and nuclear targets which prompted retaliatory strikes from Iran and threatened to draw the US into the conflict. Market impacts continue to be felt across the energy complex and renewable feedstocks through to consumer airline ticket demand.
On June 16, the US Senate Finance Committee released significant modifications to the Budget Reconciliation Bill, notably removing restrictions on imported feedstocks in 45Z qualifying fuels with just a 20% reduction in credit value. This will have significant impacts on UCO and tallow imports to the US, and we believe these actions will improve the long-term competitiveness of the US SAF and renewable diesel industries.
The modifications also generally prevent negative emissions rates for fuels after December 31, 2025, finally definitively removing the dream of potentially unlimited 45Z tax credits for SAF pathways with negative CI scores.
On 13 June, the EPA proposed a record obligation of 5.61 billion gallons of biomass-based diesel (including SAF) under the Renewable Fuel Standard in 2026. This is a 67% increase from 3.35 billion gallons in 2025 and was significantly higher than expected, supporting higher RINs prices. Crucially, the plan simultaneously reduces the RIN value for biofuels made with foreign feedstocks or biofuels which are imported directly by 50% - a double whammy for imported neat SAF after this year’s switch from the BTC to CFPC 45Z.
SAF feedstock imports and availability were reduced in May due to recent market and regulatory uncertainty which caused feedstock prices to continue to rise. This combined with reduced jet fuel prices has further challenged US SAF production economics and margins.
We expect that this month’s developments will translate into higher feedstock imports and availability which, combined with rising crude oil and jet fuel prices, should provide some relief for SAF producers in coming months, despite the lack of pricing strength in US SAF markets.
Total has signed a 15-year agreement with Quatra, one of Europe’s leading collectors and recyclers of used cooking oil, to secure 60,000 tons annually of European-sourced used cooking oil starting in 2026.
Neste has secured agreements to supply 8,800 metric tons of SAF to FedEx at LAX over the next 12 months and 7,500 metric tons of SAF to Amazon for its cargo operations at SFO and Ontario International Airport in California through the end of 2025.
XCF Global (formerly New Rise Renewables) has debuted on the Nasdaq (SAFX), marking a milestone as the first US publicly traded company solely focused on SAF.
IATA is pushing back against EU SAF mandates saying “Mandates without market readiness or pricing safeguards are inflating decarbonization costs. Europe’s approach is broken. A $4.7 trillion energy transition shouldn’t be hobbled by bad policy”.
It has also been reported that a declaration of support for EU SAF mandates from the SAF industry in June was in fact drafted by EU officials, casting further doubt on support for, and the viability of EU plans for SAF.
Our proprietary analysis of costs of production for generic US HEFA and EtJ units, with current market price movements for May sales of blended SAF to US customers, shows a further deterioration of margins across the board for May 2025.