I have worked on issues surrounding the scale-up of sustainable aviation fuel (SAF) since the early 2000s, when discussions began around creating an ASTM standard. Over the next two decades, fuel standards were developed for multiple production pathways and a nascent global industry began to emerge.
Policy developed more slowly. In the years following the Paris Agreement, governments focused heavily on reducing light-duty vehicle emissions through electrification. Greater attention to aviation emissions came later, but the policy landscape has expanded quickly over the past five years, with a growing number of countries adopting or developing SAF policies.
The first wave of SAF policies is beginning to create markets, but it is also showing the limits of stand-alone mandates and incentives. If governments intend to develop viable SAF markets, they will have to decide whether they are prepared to address the other costs and risks involved, how long any additional support should last, who should pay for it and what should happen as the market matures.
Current SAF Policy Landscape
The SAF policies adopted over the last few years show that leading markets are using very different combinations of mandates, incentives, procurement and industrial policy to develop demand and production. Some approaches emphasize binding demand, while others focus on attracting domestic investment, supporting local industries or giving airlines flexibility in meeting emissions goals. The figure below provides four examples of approaches taken in Europe, Asia-Pacific, Latin America and the United States.
What the First Wave of SAF Policies Is Teaching Us
Source: Transport Energy Strategies analysis of official government SAF policies and implementation materials, August 2026. Hat tip to Farrah Shawky at Advanced Biofuels Canada for helping me create this graphic!
Europe has established binding mandates and separate requirements for synthetic fuels. The U.S. has relied mainly on production incentives, although SAF lost its preferential federal credit treatment after 2025. Singapore is combining an initial target with centralized procurement funded through aviation levies, while Brazil is requiring airlines to reduce lifecycle emissions and allowing several ways to comply.
These policies are doing more than reducing aviation GHG emissions. They are influencing where plants are built, which technologies attract investment, how feedstocks are used and whether countries depend on domestic production or imported fuel.
Policy is beginning to create SAF markets, but different combinations of mandates, incentives and industrial policy are producing different investment and trade signals across what is expected to become a global market. SAF policy is therefore becoming industrial and trade policy as well as climate policy.
Mandates Are Not Enough
The emerging policy landscape also shows that mandates alone may not be enough to develop a viable SAF market. Much of the SAF demand projected for 2030 is not yet assured. The 2026 SAF Market Outlook from SkyNRG and ICF attributes approximately 5 million metric tons of projected demand to existing mandates, shown in the figure below. Another 3 million metric tons depends on expected mandates, while roughly 5 million metric tons depends on targets, incentives and voluntary purchasing.
Growing the SAF market will need more than that. In addition to creating demand, policies may be needed to help buyers manage the initial cost premium, support purchase arrangements that allow projects to obtain financing, create demand for advanced production pathways and establish credible rules for tracking and transferring environmental attributes. The figure below presents some suggestions for SAF policies that are likely needed across the entire value chain.
No leading market does all of this right now. Europe and the United Kingdom have strong mandates and support for advanced pathways, but project financing and cross-border attribute recognition are still developing. The U.S. offers federal and state incentives but lacks durable federal demand. Singapore has centralized procurement and an attribute framework but does not yet create targeted demand for advanced pathways.
Other markets reveal different gaps, shown in the figure below. Japan has a national target and production support but lacks binding demand and broad long-term procurement. Brazil has an emissions-based obligation and national certificate system but limited project-revenue support. Canada has several policy components, including provincial clean-fuel crediting, but no integrated national SAF demand signal.
The comparison does not necessarily make the case for more government support. It shows that adopting a mandate may involve a much larger policy commitment than the mandate itself suggests. How committed are governments to SAF? And if they are committed, what are they willing to do to more fully support uptake?
In the next wave of SAF policies, governments seeking domestic production will have to decide whether to address the buyer premium, project-revenue uncertainty, advanced-pathway development, attribute accounting and the role of existing fuel suppliers. If they do not, they may still create demand, but that demand could be met through imports, delayed projects or a narrower range of technologies than policymakers intended.
Any additional financial support raises its own questions. Governments will need to determine how long it should last, who should bear its cost and whether repayment, automatic phaseouts or reductions in consumer surcharges should apply as conditions improve. They may also need to consider whether existing refinery and distribution infrastructure should be encouraged to participate, and under what conditions.
The next wave of SAF policy should move beyond establishing mandates and focus on whether governments are prepared to support the wider market those mandates depend on. I do not think most policymakers across the leading SAF markets are thinking through this full set of choices yet. But the current war in Iran, high oil prices, energy and national security concerns may give them a strong reason to do so.
