Sustainability Atlas
Mobility & Built Environment·14 min read··...

Interview: the builder's playbook for Sustainable aviation & shipping — hard-earned lessons

A practitioner conversation: what surprised them, what failed, and what they'd do differently. Focus on unit economics, adoption blockers, and what decision-makers should watch next.

Aviation and shipping together account for approximately 5% of global CO₂ emissions—a figure that seems modest until you realize these sectors are among the hardest to decarbonize and are projected to triple their emissions by 2050 without intervention. In 2024, sustainable aviation fuel production doubled to 1 million tonnes, yet this represented just 0.3% of global jet fuel consumption. Meanwhile, alternative-fueled ship orders surged 50%, with 600 new vessels advancing maritime decarbonization. We spoke with practitioners across airlines, shipping lines, fuel producers, and investors to understand what's actually working, what's failing, and what they'd do differently.

The sustainable transport fuel market is reaching an inflection point: SAF is projected to grow from $2.06 billion in 2025 to $25.62 billion by 2030, while the IMO's newly approved Net-Zero Framework will impose the world's first legally binding carbon price on any sector when it enters force in 2028. Yet the path from pilot to scale remains treacherous. Here's what builders have learned navigating these high-stakes transitions.

Why It Matters

International shipping moves 90% of global trade, while aviation connects 4.5 billion passengers annually. Neither sector can electrify—the energy density requirements are simply too demanding for current battery technology. A single transatlantic flight requires energy equivalent to a Tesla battery pack's entire capacity for every passenger, every hour. Container ships crossing the Pacific consume fuel measured in thousands of tonnes.

The regulatory pressure is intensifying rapidly. The EU Emissions Trading System extended to shipping in January 2024, requiring vessels over 5,000 gross tonnes to pay for CO₂ emissions in European waters. ReFuelEU Aviation mandates 2% SAF blending in 2025, rising to 70% by 2050. The IMO's April 2025 approval of the Net-Zero Framework—requiring 30% greenhouse gas intensity reduction by 2035 and net-zero by approximately 2050—represents the most significant maritime regulatory transformation in history.

For founders and investors, the commercial opportunity is substantial but requires navigating significant technology, infrastructure, and policy risks. SAF commands 3-10x premiums over conventional jet fuel, while green methanol costs approximately twice conventional bunker prices. The question is how quickly these premiums compress as production scales—and who captures value as traditional supply chains transform.

Key Concepts

Sustainable Aviation Fuel Pathways

SAF encompasses multiple production pathways, each with different feedstocks, costs, and scalability profiles. Approximately 80% of current production uses the HEFA pathway (Hydroprocessed Esters and Fatty Acids), converting used cooking oil and animal fats into jet fuel. This pathway is proven and commercially available but faces fundamental feedstock constraints—global used cooking oil supply cannot scale to meet aviation's needs.

The next generation of SAF pathways includes Alcohol-to-Jet (AtJ), which converts ethanol from agricultural waste into jet fuel, and Fischer-Tropsch synthesis, which can use any carbon source including municipal solid waste. Power-to-Liquid (PtL) or e-SAF represents the ultimate scalability solution—converting renewable electricity, water, and captured CO₂ into synthetic jet fuel—but currently costs up to 12x conventional jet fuel.

Maritime Green Fuel Hierarchy

The shipping industry faces similar pathway diversification. Green methanol has emerged as the leading near-term solution, with over 60 methanol-capable vessels now in operation and 300+ on order. Methanol offers relatively straightforward engine integration and existing bunkering infrastructure at approximately 20 ports globally. When produced from renewable sources, it delivers 65-90% lifecycle emissions reductions.

Green ammonia represents the dominant long-term solution for larger vessels. Research indicates green ammonia could fulfill over 60% of global shipping fuel demand by targeting just the top 10 regional ports. However, ammonia's toxicity requires specialized handling infrastructure, and the first ammonia-fueled marine engines won't be delivered until 2025.

Unit Economics Reality Check

The practitioners we interviewed emphasized understanding true unit economics before committing capital. "Everyone focuses on the fuel premium, but the infrastructure costs are where projects die," explains a sustainable fuels investor. SAF requires no aircraft modifications but needs dedicated storage and handling at airports. Green methanol requires new bunkering infrastructure at ports but uses modified conventional engines. Green ammonia requires both new engines and entirely new fuel handling systems.

What's Working

Maersk's Green Methanol Fleet

Maersk has executed the world's first commercial-scale green methanol shipping operation, completing delivery of 18 large dual-fuel methanol vessels by May 2025. The 16,000 TEU ships, led by Ane Mærsk entering service in January 2024, can run on either green methanol or conventional low-sulfur fuel oil, providing operational flexibility while green fuel supply scales.

"The dual-fuel approach was essential," notes an industry observer familiar with the program. "Maersk couldn't wait for perfect green methanol availability—they needed ships operating now that can transition as supply increases." The company secured a 500,000 tonnes per year green methanol offtake agreement with Goldwind in China, de-risking fuel supply for approximately 12 vessels from 2026.

United Airlines SAF Procurement Leadership

United Airlines became the leading SAF user in the United States in 2024, consuming over 4,300 metric tonnes (13 million gallons). The carrier's partnership with Neste, the world's largest SAF producer, brought sustainable fuel to Chicago O'Hare in August 2024—the first SAF at that major hub—enabled by Illinois state tax credits.

The Eco-Skies Alliance program demonstrates a viable commercial model for bridging the SAF premium: corporate partners pay the cost differential between SAF and conventional jet fuel in exchange for emissions reduction claims. Microsoft, Deloitte, and other corporate travelers effectively subsidize SAF adoption while meeting their own Scope 3 emissions targets. United expanded this partnership to three additional hubs—Houston, Newark, and Dulles—in 2025.

State-Level Policy Acceleration

California's Low Carbon Fuel Standard has proven that well-designed policy can accelerate SAF adoption faster than federal mandates. The state's credit system makes SAF economically competitive with conventional jet fuel within California, driving disproportionate SAF consumption at San Francisco International Airport and LAX. Illinois, Colorado, and Washington have implemented similar SAF tax credits, creating a patchwork of regional incentives that collectively drive market development.

What's Not Working

Green Hydrogen Economics

The fundamental challenge for both e-SAF and green ammonia is hydrogen cost. At current prices of $4-6 per kilogram, green hydrogen remains prohibitively expensive. Break-even for hydrogen-based SAF requires approximately $1.50/kg hydrogen, while break-even for green ammonia-based shipping requires similar cost reductions plus massive electrolyzer scale.

"We spent two years developing a Power-to-Liquid project before realizing the renewable electricity costs alone made it uncompetitive," admits a fuel startup founder. "The technology works, but the economics don't—yet. We pivoted to waste-to-fuel pathways that can achieve commercial viability now while hydrogen costs decline."

SSAB's withdrawal from $500 million DOE funding negotiations in January 2025 for a US green steel project signals that even industry leaders find hydrogen economics challenging outside optimal locations with exceptionally cheap renewable electricity.

SAF Feedstock Constraints

HEFA-based SAF production is approaching feedstock limits. Used cooking oil and animal fats represent finite supplies, and competition from road biodiesel increases costs. "Every new HEFA SAF plant means tighter feedstock markets," explains a renewable fuels analyst. "The industry needs to diversify to alcohol-to-jet and gasification pathways, but those technologies are 5-7 years behind HEFA on commercial readiness."

The 2024 SAF production target of 1.5 million tonnes was missed, with actual production reaching only 1.0 million tonnes due to delayed facility ramp-ups. The supply-demand gap is widening: projected SAF capacity of 18 million tonnes by 2030 falls far short of 40 million tonnes demand by 2035.

Bunkering Infrastructure Gaps

While methanol-capable ships are being delivered, green methanol bunkering infrastructure remains limited. Approximately 20 ports globally can supply methanol, but green methanol availability is even more constrained. Maersk's vessels can operate on conventional fuel, but this defeats the decarbonization purpose.

"The chicken-and-egg problem is real," observes a port infrastructure developer. "Ports won't invest in green methanol storage without guaranteed demand, and shipping lines won't order methanol ships without guaranteed fuel supply. Maersk broke this logjam through vertical integration and long-term offtake agreements, but not everyone has Maersk's balance sheet."

Green ammonia faces even greater infrastructure challenges. The fuel's toxicity requires specialized training, safety systems, and completely new handling equipment at every bunkering location.

Key Players

Established Leaders

  • Neste — World's largest SAF producer with 1.5 million tonnes annual capacity, expanding to 2.2 million tonnes by 2027. Supplies United Airlines, American Airlines, and major corporate buyers.
  • Maersk — First mover in green methanol shipping with 24+ dual-fuel vessels ordered. 500,000 tonnes/year green methanol offtake secured with Goldwind.
  • World Energy — Operates the world's first dedicated SAF-only refinery at Paramount, California. Supplies Los Angeles and San Francisco markets.
  • TotalEnergies — Integrated energy major with significant SAF production commitments and refinery conversions in France and the Netherlands.

Emerging Startups

  • Twelve — Power-to-Liquid e-SAF technology using electrochemical CO₂ conversion. Alaska Airlines partnership for commercial demonstration.
  • LanzaJet — Alcohol-to-Jet pathway converting ethanol to SAF. Freedom Pines facility in Georgia targeting 10 million gallons annually.
  • Prometheus Fuels — Direct air capture to e-fuels technology. American Airlines investment and offtake agreement.
  • Amogy — Ammonia-to-power technology for maritime applications. First ammonia-powered tugboat demonstration in 2024.

Key Investors & Funders

  • Breakthrough Energy Ventures — Backing LanzaJet, Twelve, and other SAF pathway innovators. Climate-focused fund with $3.5 billion under management.
  • Amazon Climate Pledge Fund — Strategic investments in Infinium (e-fuels) and carbon-neutral logistics solutions.
  • Aramco Ventures — Saudi oil major investing in SAF companies to diversify beyond conventional crude.
  • EU Innovation Fund — €40 billion for clean technology projects including SAF facilities and green shipping infrastructure.

Action Checklist

  1. Map your feedstock exposure: For SAF developers, audit supply chain dependencies on used cooking oil and animal fats. Develop diversification strategies toward alcohol-to-jet, gasification, or power-to-liquid pathways before feedstock constraints intensify.

  2. Secure long-term offtake agreements: Airlines and shipping lines with firm SAF/green fuel commitments provide the demand certainty that enables project financing. Maersk's Goldwind agreement and United's Neste partnership demonstrate how offtake de-risks capacity investment.

  3. Engage state and regional policymakers: California's LCFS and Illinois SAF tax credits prove that subnational policy can create commercially viable markets before federal mandates mature. Identify jurisdictions with SAF incentive programs and concentrate initial deployment there.

  4. Design for fuel flexibility: Dual-fuel engines for shipping and SAF blending for aviation provide operational flexibility while green fuel supply scales. Avoid single-pathway bets that create stranded asset risk if preferred fuel doesn't achieve commercial viability.

  5. Build corporate buyer coalitions: United's Eco-Skies Alliance demonstrates that corporate Scope 3 emissions pressure creates willing premium payers. Develop book-and-claim or insetting programs that connect SAF supply with corporate sustainability commitments.

  6. Monitor infrastructure bottlenecks: SAF requires airport storage and handling upgrades; green methanol requires port bunkering infrastructure; ammonia requires entirely new fuel systems. Align deployment timelines with infrastructure development at target locations.

  7. Track regulatory trajectory across jurisdictions: EU ETS for shipping, ReFuelEU Aviation mandates, IMO Net-Zero Framework, and US Clean Shipping Act create overlapping compliance requirements. Model scenarios to optimize fleet and fuel strategy across regulatory regimes.

FAQ

Q: How significant is the SAF price premium, and when will it compress to commercially sustainable levels? A: SAF currently costs 3-10x conventional jet fuel, with e-SAF (Power-to-Liquid) commanding premiums up to 12x. Airlines paid approximately $2.9 billion in SAF premiums in 2025. However, premiums are projected to compress significantly: HEFA-SAF costs are expected to approach 2-3x conventional fuel by 2030 as production scales, while alcohol-to-jet pathways could achieve similar economics by 2028. E-SAF will remain expensive until renewable electricity and electrolyzer costs decline substantially—likely post-2030 for broad commercial viability. The key variable is policy support: California's LCFS makes SAF cost-competitive today within that market, demonstrating that well-designed incentives can bridge the premium gap immediately.

Q: Is green ammonia or green methanol the better bet for shipping decarbonization? A: Both fuels will play significant roles, but for different applications. Green methanol is further along commercially—with 60+ vessels in operation and 300+ ordered—and can leverage existing liquid fuel handling expertise and infrastructure. It's the preferred near-term solution for container shipping and vessels requiring flexibility. Green ammonia offers higher energy density and is likely to dominate for larger, longer-route vessels (bulk carriers, tankers) where the infrastructure investment justifies the efficiency gains. However, ammonia's toxicity creates handling complexities that will slow adoption. Research indicates ammonia could fulfill 60%+ of shipping fuel demand by targeting just 10 major ports, but this requires coordinated infrastructure development. Most practitioners recommend hedging across both pathways rather than making exclusive bets.

Q: What's the realistic timeline for IMO regulations to force shipping industry transformation? A: The IMO approved the Net-Zero Framework in April 2025, but formal adoption was postponed to 2026, with expected entry into force in spring 2027 and compliance beginning in 2028. The framework targets ships over 5,000 gross tonnes—responsible for 85% of maritime CO₂—and imposes a Global Fuel Standard requiring 30% GHG intensity reduction by 2035 and 65% by 2040. Critically, the framework creates the world's first legally binding sectoral carbon price: ships exceeding intensity thresholds must purchase "remedial units," while zero-emission fuel users earn "surplus units" and financial rewards. However, regional regulations are already active—EU ETS for shipping began January 2024, with first surrender deadlines in September 2025. The US Clean Shipping Act would require all vessels over 400 GT to be zero-emission by 2040 in US waters. Shipowners should plan for compliance by 2028, but those serving European trades face immediate carbon costs.

Q: How do emerging market dynamics differ from developed markets for sustainable aviation and shipping? A: Emerging markets face distinct challenges and opportunities. On the challenge side: weaker policy support, less developed infrastructure, and higher capital costs create barriers to early adoption. Airlines in developing regions often operate older, less fuel-efficient fleets with limited SAF access. However, emerging markets offer unique opportunities: lower labor costs for SAF production facilities, abundant renewable energy potential (particularly in Africa and Latin America) for e-fuel production, and growing port infrastructure that can be designed for green fuels from inception. Hyphen Hydrogen Energy's $10 billion green hydrogen facility in Namibia—targeting green ammonia export—demonstrates how emerging markets can become production hubs serving global shipping routes. The Global Maritime Forum identifies four port "archetypes" for green fuel development, with strategic ports in developing regions positioned to capture significant value as production shifts toward low-cost renewable energy locations.

Q: What surprised practitioners most about scaling sustainable aviation and shipping fuels? A: Three themes emerged consistently. First, infrastructure complexity—"Everyone focuses on fuel production costs, but the airport/port infrastructure to handle, store, and deliver alternative fuels is equally challenging and often overlooked in project economics." Second, feedstock competition—"We didn't anticipate how quickly used cooking oil prices would rise as road biodiesel, SAF, and renewable diesel all compete for the same finite supply." Third, policy fragmentation—"The patchwork of state, federal, and international regulations creates compliance complexity that advantages large players who can navigate multiple regimes. Smaller operators struggle to optimize across California LCFS, federal SAF credits, EU ETS, and IMO frameworks simultaneously." The practitioners we interviewed emphasized that successful projects required deep expertise across technology, policy, and infrastructure domains—rarely found in single organizations.

Sources

The decarbonization of aviation and shipping represents both an existential climate challenge and a generational commercial opportunity. SAF production doubling annually and maritime alternative fuel orders surging 50% demonstrate that the transition is accelerating—but from a base far below what climate targets require. Practitioners who navigate the unit economics, build the right partnerships, and position for regulatory tailwinds will capture disproportionate value as these $25+ billion markets mature. The technology increasingly works; the question is who moves fastest to scale production, secure supply, and lock in the partnerships that define the next generation of global transport.

Topics

sustainableaviationfleet electrificationpermittingdemand chargesretrofitsbenchmark KPIs

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