The Cost of Cleaner Skies: How Sustainable Aviation Fuel Will Affect Air Travel

Research indicates the adoption of SAF will likely lead to higher ticket prices. A University of Sydney study found using SAF could add between $68 and "hundreds of dollars" to a long-haul flight.

A global push to decarbonize aviation through Sustainable Aviation Fuel (SAF) is expected to increase airfare costs, according to industry and academic analyses. While governments are implementing blending mandates, the fuel remains scarce and expensive. Concurrently, countries like Australia are assessing domestic production capacity to reduce reliance on imports and address rising conventional fuel prices.

Cost Implications for Travelers

Research indicates the adoption of SAF will likely lead to higher ticket prices. A University of Sydney study found using SAF could add between $68 and "hundreds of dollars" to a long-haul flight. The same study reported the average traveler is willing to pay only an additional $2.60 for sustainable fuel on such a trip.

Industry representatives have echoed concerns about affordability. Stephen Beckett, chief executive of Airlines for Australia and New Zealand (A4ANZ), stated the sector is aware of the potential financial burden on consumers and emphasized the need for policy to ensure aviation remains affordable.

Globally, SAF accounted for an estimated 0.6% of total jet fuel consumption in 2025, projected to rise to 0.8% in 2026. The International Air Transportation Association (IATA) reported this contributed an additional US$3.6 billion in global fuel costs for airlines last year. IATA's Director General, Willie Walsh, suggested current mandates have primarily increased prices rather than production.

Government Mandates and Regulatory Timelines

Several governments are implementing regulations that require airlines to blend SAF with conventional fuel:

• European Union: A 2% blend mandate starts in 2025, rising to 6% in 2030, 34% in 2040, and 70% by 2050.
• United Kingdom: A 2% blend is required in 2025, increasing to 10% by 2030.
• Australia: The country currently has no binding SAF blend mandate. Industry advocates, including Bioenergy Australia's CEO Shahana McKenzie, have called for a government mandate to boost domestic demand.

Production Efforts and Challenges in Australia

Australia currently exports up to 90% of its canola for biofuel production overseas.

Australia is exploring domestic SAF production amid rising conventional jet fuel costs, which have increased by 150% since the start of conflict in the Middle East. The aviation industry uses approximately 10 billion litres of jet fuel annually, with demand projected to increase by 75% from 2023 to 2050.

• According to CSIRO's 2023 SAF Roadmap, Australia has enough feedstock (including canola, sugar cane, agricultural residues, and waste) to meet about 60% of current aviation fuel demand, or roughly 5 billion litres annually.
• By 2050, with projected demand at 14 billion litres, feedstock supply could potentially meet 90% of demand if new technologies become commercially viable.
• Australia currently exports up to 90% of its canola for biofuel production overseas.

The federal government has launched a $1.1 billion Cleaner Fuels Program to incentivize private investment. Several SAF refinery projects are in planning stages:

• Jet Zero, Townsville: 100 ML capacity, Alcohol-to-Jet (ATJ) method, targeting late 2027 operation.
• HAMR, Mount Gambier: 140 ML capacity, ATJ method.
• Ampol, Brisbane: 750 ML capacity, HEFA method, targeting 2029 operation.
• Jet Zero, Gladstone: 402 ML capacity, HEFA method.

The combined expected capacity of these four projects is 1.4 billion litres.

• There is currently no dedicated SAF production in Australia.
• A "green premium" exists; a 2025 Deloitte analysis found Australian-made SAF costs about $2.80 per litre more than conventional jet fuel.
• Building new refineries is estimated to take 5 to 10 years.
• Stephen Forshaw of Airbus estimated Australia would need 60 refineries the size of the Jet Zero Townsville project to meet projected SAF demand by 2030.
• Building sufficient refining capacity to process Australia's estimated 2050 feedstock supply could require an investment of approximately $90 billion.

Environmental Profile and Industry Outlook

The emissions reduction potential of SAF varies by its source material. SAF derived from canola is estimated to have 30% lower life-cycle emissions than conventional jet fuel, while SAF from waste products like used cooking oil has a lower emissions profile. Emissions from farming are included in life-cycle calculations when crops are grown specifically for SAF.

The aviation industry estimates that electric or hydrogen-powered aircraft will not significantly contribute to emission reductions before 2050, underscoring the current focus on SAF. Airlines like Qantas, for which SAF currently comprises about 0.2% of fuel use, have committed to using 10% SAF by 2030.