Aviation
Aviation
Sustainable aviation fuel (SAF) represents a technology that has the long-term potential to partially replace demand for petroleum-derived jet fuel.
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Aviation - Summary
Hydrogen-powered and electric planes are technologies unlikely to be available on a commercial basis for decades. In contrast, sustainable aviation fuel (SAF) - fuel made from non-petroleum sources - is already available within the industry and represents a technology that has the long-term potential to partially replace demand for petroleum-derived jet fuel.
Jet fuel represents a small portion of overall crude oil demand but both absolute levels of demand, and the proportion of the barrel it represents is anticipated to continue to increase to 2040. Peak demand for petroleum-derived jet fuel, even as SAF usage gains prominence from its non-existent base, is not expected before 2040.
By the end of the forecast period, annual jet fuel consumption is expected to increase by over 3 million bpd from current levels due to an approximate doubling of global passenger numbers. This is as a result of demand recovery from the impact of the COVID-19 pandemic and continued growth in international travel. The proportion of jet fuel within the barrel will likely rise to 10% (from 7% today), with demand moderated in North America and Europe where SAF adoption will also be highest over the next 15 years.
Jet fuel demand is expected to continue to grow to 2040.
Rest of World includes South America, Africa, Former Soviet Union (FSU) and Middle East
Shaded section indicates timing of COVID-19 pandemic
Jet fuel only includes kerosene-based fuel
Aviation - Key drivers
If adopted in emerging economies, this could disproportionately impact aviation activity, where consumers may be less able to absorb higher prices.
In 2023, SAF represented just 0.2% of total jet fuel for the aviation sector. SAF made primarily from crop and plant feedstocks (bio-SAF) and waste cooking oil dominate the nascent SAF market today, whilst researchers continue to explore the viability of ethanol-to-jet and synthetic/e-fuels.
SAF has been adopted at low levels by commercial airlines to improve green credentials, but constrained supply and resulting high cost – roughly three times that of petroleum jet fuel – is limiting greater adoption. Hence the EU ReFuelEU legislation to mandate SAF adoption within the aviation sector. From 2025, SAF must represent 2% of fuel supplied, increasing to 6% in 2030, 20% in 2035 and then 70% by 2050. However, not all regions will be willing to mandate high levels of SAF adoption when the likely outcome is increased costs which limit international travel and negatively impact aviation industries.
For SAF to play a significant role in the decarbonisation of the aviation sector, three things need to happen; legally binding mandates which ensure an investment market for SAF; the use of retired refinery infrastructure repurposed for SAF production; and the upscaling of crop and plant feedstocks and supply from waste cooking oils.
The Long term oil demand outlook report includes Vitol’s views on and forecasts of both historical levels and projections of future energy demand, supply, and trends based upon internal data and analyses as well as publicly available information from a variety of external sources. The report contains forward looking statements, including projections, targets, expectations, estimates and assumptions of future behaviours. Actual future conditions and results (including energy demand, energy supply, the growth of energy demand and supply, the impact of new technologies, the relative mix of energy across sources, economic sectors and geographic regions, imports and exports of energy, emissions and plans to reduce emissions) could differ materially due to changes in economic conditions, the ability to scale new technologies on a cost-effective basis, unexpected technological developments, the development of new supply sources, changes in law or government policy, political events, demographic changes, trade patterns, the development and enforcement of global, regional or national mandates, changes in consumer preferences, and various other factors. The report was published in February 2025. Vitol assumes no duty to update these statements or materials as of any future date, and neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of this material as of any future date. This material is not to be used or reproduced without the permission of Vitol. All rights reserved.