SAF Industry at a Glance
March 14, 2025
The key SAF market developments in March 2025 include:
The increasing uncertainty around economic prospects in the face of the current administration’s fluctuating tariff policies could disrupt economic activity and expected price developments further this year. Although these impact various parts of the economy, there are immediate implications for trade in renewable fuels and feedstocks between the US and Canada.
Southwest Airlines will cut approximately 1,750 corporate jobs, or 15% of its headquarters staff, in a bid to trim costs and streamline operations, the company announced on February 17. These actions reinforced the stated requirements for long-term SAF prices at parity with jet fuel prices.
Major U.S. airlines provided updates to their financial outlooks for Q1 2025 reflecting operational and financial expectations amidst a challenging economic environment, including factors such as softening demand, rising costs, and strategic shifts in response to industry dynamics.
Meanwhile IATA released their long-range forecast for the growth in airline passenger numbers in February which they believe will average 3.7% per year globally, resulting in a doubling of global passenger numbers in 19 years, or by the end of 2043.
Meanwhile SAF consumption mandates have started in the world’s largest mandated SAF market, the EU, which requires that 70% of EU jet fuel demand be supplied by SAF or eSAF by 2050, while also restricting the two pathways that stand the best chance of providing high volumes of SAF at low cost with low carbon intensity in the short to medium term - crop-based ethanol-to-jet SAF and UCO / Tallow - based HEFA SAF.
Air Products announced its withdrawal from a SAF expansion with World Energy in Paramount, California confirming it had terminated its agreement with World Energy due to “challenging commercial aspects surrounding the expansion project and current operations.”
Montana Renewables reported 2024 results including negative gross profit of $53.5 million (worsening from -$32.6 million in 2023), and Adjusted EBITDA dropping 45% to $16.7 million, reflecting margin compression in renewable fuels.
Following the world’s largest producer of SAF, Neste’s reported ‘unacceptable’ 2024 earnings, Neste’s CEO has suggested potential tariffs on SAF imports to bolster EU production, reflecting concerns about supply and cost competitiveness with US incentivized SAF production.
In the US, February SAF market price premiums to Jet remained broadly stable resulting in lower SAF prices as Jet prices decreased. HEFA SAF margins decreased as feedstock costs increased but EtJ SAF theoretical margins remained largely stable.
Green Star BCS’s 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.
Prices for feedstocks Soybean Oil, Tallow, UCO and DCO all increased in February, faced with the prospect of less competition from imported UCO as a renewable fuel feedstock. Limits on UCO-based HEFA SAF in Europe may encourage a continuation of UCO imports for SAF exported to mandated markets in the EU and UK.