Trend analysis: Sustainable aviation & shipping — where the value pools are (and who captures them)

Airlines paid a $2.9 billion premium for 1.9 million tonnes of Sustainable Aviation Fuel (SAF) in 2025, while shipping's transition to alternative fuels will require $128 billion annually in infrastructure investment through 2050. For procurement leaders evaluating sustainable transportation options, understanding where value concentrates—and who captures it—has become essential for strategic sourcing and decarbonization planning.

Why It Matters

Aviation and shipping together account for approximately 5% of global greenhouse gas emissions, with both sectors on trajectories that could double or triple their climate impact by 2050 without intervention. These "hard-to-abate" industries lack viable battery-electric alternatives at commercial scale, making fuel switching and efficiency improvements the primary decarbonization pathways for the next two decades.

Regulatory pressure is intensifying rapidly. The EU and UK SAF mandates took effect in January 2025, requiring airlines to blend sustainable fuels into their operations. The International Maritime Organization (IMO) has committed to net-zero shipping emissions by 2050, with the April 2025 MEPC 83 meeting finalizing mid-term measures including a proposed carbon levy of $18.75-$150 per tonne CO2-equivalent. The EU's Emissions Trading System now covers maritime shipping, adding direct compliance costs.

For North American procurement teams, these regulations create both obligations and opportunities. Companies with significant freight and travel emissions face growing pressure to demonstrate progress, while early movers in SAF offtake agreements and green shipping corridors are securing preferential access to limited low-carbon capacity.

Key Concepts

Sustainable Aviation Fuel Pathways

SAF encompasses multiple production technologies, each with distinct feedstock requirements and carbon intensity profiles:

HEFA (Hydroprocessed Esters and Fatty Acids) dominates current production at 80-85% of volume, using waste cooking oils, animal fats, and vegetable oils as feedstocks. HEFA achieves 50-80% lifecycle emissions reduction versus conventional jet fuel but faces feedstock constraints as demand scales.

Alcohol-to-Jet (AtJ) converts ethanol or other alcohols to jet fuel, representing approximately 8% of announced 2030 capacity. AtJ enables use of agricultural waste and purpose-grown energy crops, expanding the feedstock base.

Power-to-Liquid (PtL) or e-SAF uses renewable electricity to produce hydrogen, which combines with captured CO2 to create synthetic fuel. PtL offers near-zero emissions but costs 8-12x conventional jet fuel at current scale.

Fischer-Tropsch (FT) gasification converts biomass or waste materials into synthetic fuels, with growing capacity announcements for 2027-2030 deployment.

Shipping Fuel Alternatives

Maritime decarbonization involves multiple competing fuel pathways:

LNG (Liquefied Natural Gas) leads current alternative fuel adoption with 26-37% of new vessel orders in 2024-2025. LNG reduces air pollutants significantly but offers limited GHG benefits due to methane slip.

Methanol is emerging as the dominant liquid fuel alternative, particularly bio-methanol produced from waste streams. Maersk's order of 8 large container vessels running on carbon-neutral methanol signals growing industry confidence.

Ammonia offers zero direct carbon emissions but faces adoption challenges—orders declined from 25 vessels in 2024 to 5 in 2025 due to toxicity concerns and port infrastructure gaps.

Hybrid-electric systems are gaining traction for short-sea shipping, with the Candela P-12 electric ferry in Stockholm demonstrating 80% energy reduction versus conventional vessels.

Sector-Specific KPI Benchmarks

KPI	Laggard	Average	Leader	Notes
SAF blend percentage	<1%	2-5%	>10%	Voluntary commitments ahead of mandates
SAF procurement cost premium	>5x jet fuel	2-3x	<2x	Book-and-claim vs. physical delivery
Shipping emissions intensity (gCO2/tonne-km)	>12	8-10	<6	Varies significantly by vessel type
Alternative fuel ready fleet	<5%	8-15%	>25%	Of owned/chartered capacity
Long-term SAF offtake secured	0%	10-25%	>50%	Of projected 2030 consumption
Green corridor participation	None	Planning	Active pilot	Industry collaboration initiatives

What's Working and What Isn't

What's Working

Long-term SAF offtake agreements: Forward-looking airlines are securing supply through decade-long contracts that guarantee volume and price certainty. Air France-KLM's 1.5 million tonne agreement with TotalEnergies (through 2035) and Lufthansa's commitment to 2 million tonnes annually by 2030 demonstrate how major carriers are locking in limited SAF capacity. These agreements typically include sustainability requirements beyond carbon intensity, including biodiversity safeguards and social criteria.

Book-and-claim certification systems: Airlines operating from multiple hubs can now purchase SAF at locations with supply availability while claiming emissions reductions at any airport in their network. This decoupling of physical fuel delivery from environmental benefit accounting has accelerated adoption by removing infrastructure bottlenecks. The Roundtable on Sustainable Biomaterials (RSB) and similar certification bodies provide third-party verification.

Methanol as shipping's emerging winner: The shipping industry appears to be converging on methanol as the transitional fuel of choice for large vessels. Methanol infrastructure is more readily deployable than ammonia or hydrogen, existing engines can be retrofitted, and bio-methanol production from waste feedstocks offers a clear path to near-zero emissions. Brittany Ferries' 1,400-passenger hybrid LNG-battery ferry launching in 2025 demonstrates how combined technologies can bridge the transition.

What Isn't Working

SAF production scaling is behind schedule: Global SAF production reached only 1 million tonnes in 2024—0.3% of jet fuel consumption—despite years of announced capacity expansions. IATA reports that production growth is slowing, with 2024 volumes below earlier projections of 1.5 million tonnes. The gap between regulatory mandates (EU requires 2% SAF in 2025, rising to 6% by 2030) and available supply creates compliance risk for airlines and their corporate customers.

Ammonia infrastructure remains nascent: Despite ammonia's theoretical advantages for long-distance shipping, real-world deployment faces significant barriers. Port authorities cite toxicity concerns, requiring substantial safety investments. Crew training requirements exceed other alternative fuels. As a result, ammonia vessel orders dropped 80% from 2024 to 2025, signaling industry hesitation.

Green premium pass-through is uneven: Airlines have struggled to pass SAF costs to passengers and corporate customers. While some business travelers accept sustainability surcharges, leisure markets remain highly price-sensitive. Corporate SAF programs (where companies pay directly for SAF to cover their business travel emissions) represent a growing but still small fraction of total SAF demand.

Key Players

Established Leaders

Neste (Finland): The world's largest SAF producer, Neste supplied fuel for Air New Zealand's record 30-million-liter purchase and Air Canada's first Canadian SAF delivery (60,000 tonnes). Their Singapore and Rotterdam refineries represent the majority of current global HEFA-SAF capacity.

TotalEnergies (France): Major integrated energy company with significant SAF investments, including the 1.5 million tonne Air France-KLM agreement and expanding production at La Mède biorefinery. TotalEnergies is positioning SAF as a core business alongside renewable electricity.

Maersk (Denmark): The shipping industry's most aggressive decarbonization leader, Maersk has ordered 25+ methanol-capable vessels and pioneered green methanol supply chains. Their influence sets expectations for the container shipping sector.

Phillips 66 (US): Added 10,000 barrels/day SAF capacity in late 2024, contributing to U.S. production growth. Their co-processing approach (blending renewable feedstocks into existing refinery operations) offers faster deployment than greenfield facilities.

Emerging Startups

LanzaJet (US): Alcohol-to-Jet specialist that opened the world's first commercial AtJ facility in Georgia in 2024. Their technology converts ethanol to SAF at scale, with major airline partnerships including Southwest and All Nippon Airways.

Twelve (US): Power-to-Liquid pioneer producing e-SAF from CO2 and renewable electricity. Despite high costs today, Twelve's technology pathway offers the only route to truly zero-emission aviation fuel at scale.

Candela (Sweden): Electric hydrofoil vessels that consume 80% less energy than conventional boats. The P-12 ferry operating in Stockholm demonstrates that electric maritime transport is viable for short routes today.

Fleetzero (US): Developing battery-swapping container ships for coastal and short-sea routes, with an approach that could electrify significant freight volumes without requiring mega-battery ships.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates' climate fund has invested extensively in SAF technologies, including LanzaJet and Twelve, betting on multiple production pathways.

First Movers Coalition (WEF): Industry coalition committing to purchase low-carbon shipping and aviation services, creating demand signals that de-risk production investments. Members include Amazon, Apple, and major freight forwarders.

U.S. Department of Energy: The SAF Grand Challenge targets 3 billion gallons of domestic SAF production by 2030, with Inflation Reduction Act credits providing $1.25-$1.75 per gallon for qualifying fuels.

Global Maritime Forum: Coordinating the Getting to Zero Coalition and 340 registered zero-emission shipping pilot projects, primarily focused on ammonia and hydrogen pathways.

Examples

Microsoft's SAF Forward Purchase Program: Microsoft has become one of the largest corporate SAF buyers globally, committing to multi-year offtake agreements that cover employee business travel emissions. In 2024, Microsoft purchased SAF through book-and-claim arrangements that reduced travel emissions by over 50,000 tonnes CO2-equivalent. Their approach—direct SAF procurement rather than traditional carbon offsets—is influencing procurement practices across the technology sector and demonstrating that corporate demand can accelerate supply development.
IKEA's Zero-Emission Shipping Initiative: Swedish retailer IKEA has committed to zero-emission shipping by 2040 and is actively piloting alternative fuel vessels. In 2024, IKEA participated in the Zero Emission Maritime Buyers Alliance (ZEMBA) first tender, signaling corporate willingness to pay green premiums for clean shipping. IKEA's containerized freight volumes give them significant influence over carrier behavior, and their public commitments create competitive pressure for other major shippers to follow.
Diamond Green Diesel's SAF Expansion: The joint venture between Valero and Darling Ingredients added 15,000 barrels/day of SAF capacity at their Port Arthur, Texas facility in 2024, making it North America's largest renewable diesel and SAF producer. By co-processing renewable feedstocks alongside conventional refining, Diamond Green Diesel demonstrates how incumbent energy infrastructure can accelerate fuel transition without requiring entirely new facilities. Their offtake agreements with United Airlines and other carriers have secured multi-year supply at scale.

Action Checklist

Audit current aviation and shipping emissions across your supply chain; identify top 10 carriers by emissions volume and assess their decarbonization commitments
Evaluate SAF procurement options: direct offtake agreements vs. corporate SAF programs vs. book-and-claim certificates; request pricing from at least two aggregators
Engage with freight forwarders and logistics providers to understand alternative fuel availability on key shipping routes; prioritize green corridor participation where available
Include sustainability requirements in transportation RFPs: minimum SAF blend percentages, alternative fuel readiness, and emissions reporting transparency
Develop internal carbon pricing to evaluate green premium trade-offs; many SAF and clean shipping options become cost-effective at $50-100/tonne CO2
Join industry coalitions (First Movers Coalition, Cargo Owners for Zero Emission Vessels) to amplify demand signals and share implementation learning

FAQ

Q: Should we prioritize SAF purchases or carbon offsets for aviation emissions? A: SAF represents "insetting"—reducing emissions within your value chain—while offsets represent "outsetting" through external projects. Current best practice favors SAF for several reasons: it directly reduces aviation's climate impact, builds demand signals for supply scaling, and faces less integrity scrutiny than offset projects. However, SAF supply constraints mean most companies will need both approaches through 2030. Target 30-50% SAF coverage of business travel by 2030, supplementing with high-quality removal offsets for the remainder.

Q: How do we evaluate green shipping claims from freight providers? A: Request specific data: alternative fuel type (LNG offers limited GHG benefits vs. methanol or ammonia), actual fuel blend percentages (not just "ready" vessels), and third-party verification of emissions calculations. The Clean Cargo Working Group methodology provides an industry-standard framework. Be cautious of claims based solely on operational efficiency without fuel switching—while important, efficiency alone cannot achieve deep decarbonization.

Q: What's the cost trajectory for SAF over the next 5 years? A: HEFA-SAF currently trades at 2-3x conventional jet fuel in North America and 3-5x in Europe. Prices are expected to decline modestly (10-20%) by 2030 as production scales, but will likely remain at significant premium. E-SAF (Power-to-Liquid) currently costs 8-12x conventional fuel and will require substantial cost reductions to achieve commercial viability. Budget for 2-3x premiums in medium-term planning; costs below 1.5x conventional fuel are unlikely before 2035.

Q: How do EU regulations affect North American procurement? A: Companies with EU operations or EU-bound freight face direct compliance obligations under the EU ETS (shipping) and ReFuelEU Aviation (SAF mandates). Beyond direct exposure, EU regulations are influencing global standards—the IMO's 2027 carbon pricing mechanism will apply worldwide. North American companies should treat EU regulations as leading indicators of future domestic requirements and prepare accordingly.

Sources

IATA. "SAF Production Growth Rate is Slowing Down." December 2025.
MarketsandMarkets. "Sustainable Aviation Fuel SAF Market Size, Share, 2025 to 2030." 2025.
SkyNRG & ICF. "Sustainable Aviation Fuel Market Outlook 2025." January 2025.
Global Maritime Forum. "Why 2025 is Such an Important Year for Shipping Decarbonisation." 2025.
DNV. "Maritime Forecast to 2050." 2024.
UNCTAD. "Maritime Trade Under Pressure – Growth Set to Stall in 2025." 2025.