Sustainability Atlas
Mobility & Built Environment·9 min read·

Case study: Sustainable aviation & shipping — A startup-to-enterprise scale story

How sustainable aviation fuel and green shipping technologies are scaling from pilot projects to enterprise adoption, with real costs and emission reduction data.

Case study: Sustainable aviation & shipping — A startup-to-enterprise scale story

Aviation and shipping together account for approximately 5% of global greenhouse gas emissions, with shipping alone responsible for roughly 3% and aviation contributing around 2.5%. These sectors transport over 80% of global goods and connect billions of passengers annually. Despite their critical economic importance, decarbonization has proven uniquely challenging because batteries cannot match the energy density required for long-haul flights or transoceanic voyages. The past five years have witnessed a remarkable shift: technologies once confined to startup labs and pilot projects are now scaling to enterprise-level deployment, backed by billions in investment and regulatory mandates that leave little room for delay.

Why It Matters

The urgency stems from both climate science and economics. The International Maritime Organization (IMO) approved its Net-Zero Framework in April 2025, setting binding targets: a 30% emissions reduction by 2035 and 65% by 2040 compared to 2008 levels, with full net-zero expected around 2050. Ships that exceed greenhouse gas fuel intensity thresholds will face financial penalties through mandatory remedial unit purchases, while those using zero or near-zero GHG fuels will receive rewards.

On the aviation side, CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) entered its first compliance phase in 2024-2026, requiring airlines from 130 participating countries to offset emissions exceeding 85% of 2019 baseline levels. Compliance costs are projected at $1.3 billion for 2025, rising to $1.7 billion in 2026.

For enterprises, the message is clear: waiting is no longer an option. Early movers are locking in fuel supply contracts, building operational expertise, and positioning themselves for regulatory compliance while competitors scramble.

Key Concepts

Sustainable Aviation Fuel (SAF)

SAF refers to jet fuel produced from renewable sources—used cooking oil, agricultural residues, municipal waste, or synthesized from green hydrogen and captured carbon dioxide. Current SAF reduces lifecycle CO₂ emissions by up to 80% compared to conventional jet fuel, with some advanced pathways potentially achieving carbon-negative outcomes.

The economics remain challenging. In 2025, SAF costs 2-5 times more than fossil jet fuel. European biofuel-based SAF averages €1,461 per tonne, while synthetic e-fuels reach €7,695 per tonne. Airlines paid a $2.9 billion premium for 1.9 million tonnes of SAF in 2025, representing just 0.7% of global jet fuel consumption. The EU's ReFuelEU mandate requires 2% SAF blending in 2025, scaling to 70% by 2050.

Green Methanol and Ammonia for Shipping

Maritime transport is converging on two primary alternative fuels. Green methanol, produced from biomass or renewable hydrogen combined with captured CO₂, offers 65-90% lifecycle emission reductions. Ammonia, synthesized from green hydrogen, produces zero direct carbon emissions when burned but requires new engine technology and safety protocols.

The EU's FuelEU Maritime regulation, effective January 2025, mandates a 2% greenhouse gas intensity reduction for ships calling at European ports, increasing to 80% by 2050. Combined with the EU Emissions Trading System extending to shipping (100% compliance required by 2026), operators face immediate financial consequences for inaction.

Regulatory Frameworks: IMO and CORSIA

The IMO's newly approved framework introduces a Greenhouse Gas Fuel Intensity (GFI) standard using well-to-wake accounting. Ships must demonstrate annual compliance or purchase remedial units. The framework enters force in 2027, with compliance beginning January 2028.

CORSIA operates differently, requiring airlines to purchase Eligible Emissions Units (EEUs) to offset growth above baseline. However, severe supply constraints exist: only 7.14 million EEUs have been issued against projected demand of 100-150 million for the 2024-2026 phase, creating both price volatility and compliance uncertainty.

What's Working and What Isn't

What's Working

Mandates create markets. The EU's ReFuelEU and FuelEU Maritime regulations, combined with carbon pricing through the ETS, have catalyzed unprecedented investment. Fuel producers now have bankable demand projections; shipowners can justify the premium for dual-fuel vessels.

Dual-fuel vessels provide transition flexibility. Maersk's methanol-capable fleet can operate on conventional fuels when green methanol is unavailable, protecting operations while infrastructure scales. This "fuel-flexible" approach reduces stranded asset risk.

Corporate offtake agreements accelerate supply. Airlines including United, Delta, and major cargo operators have signed multi-year SAF purchase agreements, providing producers with the revenue certainty needed to finance new capacity. Similar dynamics are emerging in maritime, with cargo shippers like Amazon and IKEA demanding low-carbon logistics options.

Technology is proving viable at scale. ZeroAvia's hydrogen fuel cells, Neste's HEFA refineries, and Maersk's dual-fuel engines all demonstrate that alternative propulsion works beyond laboratory conditions. The question has shifted from "if" to "how fast."

What Isn't Working

Supply lags demand. Despite doubling from 2024, global SAF production of 1.9 million tonnes in 2025 represents less than 1% of aviation fuel needs. Maritime alternative fuels face similar constraints; green methanol and ammonia production remains concentrated in demonstration projects rather than commodity-scale facilities.

Price premiums persist. SAF costs 2-5 times more than jet fuel; green methanol trades at substantial premiums to heavy fuel oil. Without stronger carbon pricing or mandates, voluntary adoption remains limited to sustainability leaders and those facing regulatory obligations.

Infrastructure gaps create bottlenecks. Airport SAF blending facilities, maritime bunkering infrastructure for methanol and ammonia, and green hydrogen production capacity all require massive investment. Permitting, grid connections, and supply chain development add years to project timelines.

Feedstock competition intensifies. Used cooking oil and agricultural residues are finite resources. As SAF demand grows, competition with renewable diesel and other biofuel applications pushes prices higher and limits total supply potential.

Examples

1. Neste: Scaling SAF Production Globally

Finnish energy company Neste has emerged as the world's largest SAF producer, reaching 1.5 million tonnes of annual capacity in 2025 after starting commercial SAF production in 2011. The company operates refineries in Singapore, Finland, and the Netherlands, with the Rotterdam facility adding 500,000 tonnes of SAF capacity when it came online in April 2025.

Neste's HEFA (Hydroprocessed Esters and Fatty Acids) pathway converts waste oils into drop-in jet fuel compatible with existing aircraft and infrastructure. The company has signed supply agreements with over 40 airlines and is targeting 2.2 million tonnes of annual SAF capacity by 2027. Their journey illustrates the 15-year timeline from pilot to global scale—and the billions in capital required to get there.

2. Maersk: Building the World's First Green Methanol Fleet

Shipping giant Maersk has committed to net-zero emissions by 2040 and is backing that commitment with hardware. By May 2025, the company completed delivery of 18 large dual-fuel methanol-capable container vessels, ranging from 16,000 to 17,000 TEU capacity. An additional seven vessels will bring the total methanol-capable fleet to 25 by decade's end.

The fleet represents a $10+ billion investment, complemented by fuel sourcing agreements totaling 730,000 tonnes of green methanol annually. Partnerships span European Energy, Ørsted, and producers in the US, Latin America, and China. Maersk projects its methanol fleet will eliminate 2.75 million tonnes of CO₂ annually. The company has leveraged its scale to de-risk first-mover disadvantages while creating competitive differentiation for sustainability-focused customers like Primark and H&M.

3. ZeroAvia: Hydrogen Aviation from Prototype to Commercial Network

California-based ZeroAvia is pursuing hydrogen-electric propulsion for regional aviation, targeting the 10-80 seat aircraft segment responsible for significant short-haul emissions. In 2025, the company achieved critical milestones: certification submissions for its ZA600 engine to the UK CAA and US FAA, successful ground tests replicating a 250 nautical mile flight profile, and the first liquid hydrogen refueling of a test aircraft.

A €21.4 million EU Innovation Fund grant will support deployment of 15 hydrogen-electric Cessna Caravans across 15 Norwegian airports beginning in 2028—the world's first commercial hydrogen aviation network. ZeroAvia has accumulated over 1,500 engine pre-orders and attracted investment from American Airlines, Alaska Airlines, Breakthrough Energy Ventures, and Barclays Climate Ventures. The company exemplifies the startup-to-enterprise trajectory: founded in 2017, first flight in 2020, certification expected 2027-2028.

Action Checklist

  • Assess regulatory exposure across operating regions—map EU ETS, FuelEU Maritime, ReFuelEU, and IMO GFI requirements to your fleet or travel footprint
  • Engage fuel suppliers early to understand SAF or alternative fuel availability, pricing trajectories, and contract structures before mandates create demand spikes
  • Evaluate fleet renewal timing to determine whether ordering dual-fuel vessels or planning aircraft replacement around SAF certification makes strategic sense
  • Develop internal carbon accounting capabilities to track Scope 3 transportation emissions with the granularity regulators and customers increasingly require
  • Explore book-and-claim mechanisms where physical fuel delivery is impossible—SAF certificates and similar instruments allow emission reduction claims without direct fuel use
  • Build partnerships across the value chain including fuel producers, OEMs, ports, airports, and financing institutions to share risk and accelerate learning
  • Monitor technology developments in hydrogen, ammonia, and synthetic fuels that may reshape the landscape beyond current methanol and HEFA-based solutions

FAQ

Q: How much does sustainable aviation fuel actually cost compared to conventional jet fuel? A: In 2025, SAF costs 2-5 times more than fossil jet fuel depending on the production pathway. EU biofuel-based SAF averages around €1,461 per tonne, while synthetic e-fuels reach €7,695 per tonne. Airlines paid a $2.9 billion premium for 1.9 million tonnes in 2025. Prices are expected to narrow to 1.5-2 times conventional fuel cost as production scales through 2030.

Q: When will hydrogen-powered commercial flights become available? A: ZeroAvia targets commercial operations in 2028 with its ZA600 engine for 10-20 seat aircraft, pending regulatory certification from the UK CAA and US FAA. The first network will operate cargo routes across 15 Norwegian airports. Larger 40-80 seat hydrogen aircraft are projected for 2030 and beyond. True hydrogen-powered narrowbody jets (A320/737 class) remain a decade or more away.

Q: What should companies prioritize first: offsetting or direct fuel switching? A: Industry consensus increasingly favors direct emission reductions over offsets. CORSIA's eligible emissions unit supply shortage—only 7.14 million issued against 100-150 million needed—illustrates offset market limitations. Leading companies are pursuing a blended approach: maximize available SAF or low-carbon marine fuel, offset residual emissions with high-integrity credits, and invest in emerging technologies. Regulatory frameworks are shifting to reward actual fuel switching over offsetting.

Sources

Topics

sustainable aviation fuelSAFgreen shippingmaritime decarbonizationzero-emission vesselsgreen methanolhydrogen aviationIMO regulationsCORSIANesteMaerskZeroAvia

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