Trend watch: Sustainable aviation & shipping in 2026 — signals, winners, and red flags

In January 2026, the International Air Transport Association confirmed that sustainable aviation fuel (SAF) production reached 1.9 billion liters in 2025, representing barely 0.6% of total jet fuel consumption globally. Meanwhile, the International Maritime Organization reported that global shipping emissions actually increased by 1.2% in 2025, despite a decade of regulatory declarations and voluntary pledges. These figures lay bare the chasm between ambition and execution in transport decarbonization, and understanding where the genuine momentum lies versus where the rhetoric exceeds reality is essential for executives navigating capital allocation, fleet strategy, and regulatory compliance in 2026.

Why It Matters

Aviation and shipping together account for approximately 5% of global CO2 emissions, a share projected to rise to 10% by 2050 under business-as-usual scenarios as other sectors decarbonize faster. The combined annual fuel expenditure across these sectors exceeds $400 billion, making fuel transition decisions among the largest capital allocation questions facing transport executives.

Regulatory pressure has intensified substantially. The European Union's ReFuelEU Aviation regulation mandates 2% SAF blending by 2025, rising to 6% by 2030 and 70% by 2050. The EU Emissions Trading System expanded to cover intra-European shipping in January 2024 and all voyages to and from EU ports from January 2025. In the United States, the Inflation Reduction Act's SAF blender's tax credit provides $1.25 to $1.75 per gallon for fuels meeting at least 50% lifecycle emissions reduction, a subsidy worth an estimated $4.3 billion through 2027. The IMO's revised greenhouse gas strategy targets at least 20% emissions reduction from 2008 levels by 2030 and net-zero by approximately 2050, with mid-term measures including a global fuel standard and greenhouse gas pricing mechanism under negotiation for adoption in 2025.

For executives, the question is no longer whether these sectors will decarbonize but how fast, at what cost, and which technology pathways will dominate. Getting this wrong means stranded assets, regulatory non-compliance, and competitive disadvantage. Getting it right means first-mover access to constrained fuel supplies, lower long-term operating costs, and positioning for carbon-adjusted markets.

Key Concepts

Sustainable Aviation Fuel (SAF) refers to non-petroleum jet fuels produced from waste oils, agricultural residues, municipal solid waste, or synthesized from green hydrogen and captured CO2 (power-to-liquid or e-fuels). SAF is currently certified for blending up to 50% with conventional jet fuel under ASTM D7566, with seven approved production pathways. Lifecycle emissions reductions range from 50% for waste-oil HEFA pathways to over 90% for e-fuel pathways, though the latter remains at pre-commercial scale. The SAF price premium over conventional jet fuel narrowed from 3-5x in 2023 to approximately 2-3x by late 2025, driven by scaling HEFA production and the US blender's tax credit.

Green Corridors are specific shipping routes where zero-emission fuel infrastructure, regulatory frameworks, and willing vessel operators converge to demonstrate decarbonized operations at commercial scale. The Getting to Zero Coalition identified 25 green corridor initiatives globally as of 2025, with the most advanced being the Singapore-Rotterdam corridor targeting ammonia-fueled vessels by 2027 and the Los Angeles-Shanghai corridor focusing on methanol bunkering.

Alternative Marine Fuels encompass LNG (a transitional fuel with 20-25% tank-to-wake CO2 reduction but methane slip concerns), methanol (gaining traction due to compatibility with existing infrastructure and Maersk's fleet orders), ammonia (highest energy density among zero-carbon options but requiring new safety protocols and engine technology), and green hydrogen (limited by onboard storage density). The IMO's well-to-wake lifecycle framework, finalized in 2025, evaluates all pathways against a common baseline.

Book-and-Claim Accounting allows SAF environmental attributes to be traded separately from physical fuel delivery, enabling airlines to claim emissions reductions from SAF produced at facilities not connected to their fueling locations. This mechanism, endorsed by the Roundtable on Sustainable Biomaterials and the World Economic Forum's Clean Skies for Tomorrow initiative, dramatically expands SAF accessibility but raises integrity concerns about double counting and additionality.

Sustainable Aviation and Shipping KPIs: 2026 Benchmark Ranges

Metric	Lagging	Average	Leading	Best in Class
SAF Blend Rate (% of total fuel)	<1%	1-3%	3-6%	>6%
SAF Cost Premium vs. Jet-A	>3x	2-3x	1.5-2x	<1.5x
Shipping Fleet Carbon Intensity (EEXI compliance)	<80% fleet	80-90%	90-97%	>97%
Green Corridor Participation	0 routes	1-2 routes	3-5 routes	>5 routes
Alternative Marine Fuel Adoption (% of newbuilds)	<15%	15-30%	30-50%	>50%
Scope 3 Transport Emissions Tracked	Not measured	Estimated	Measured with primary data	Verified by third party
Carbon Offset Quality (for residual emissions)	Avoidance only	Mixed portfolio	Removal-weighted	CORSIA-eligible removals

What's Working

SAF Production Scale-Up in the US

The United States emerged as the world's largest SAF producer in 2025, with output exceeding 700 million liters, driven primarily by the Inflation Reduction Act's blender's tax credit. Montana Renewables' refinery in Great Falls, Montana, reached 300 million gallons per year of renewable diesel and SAF capacity by mid-2025, making it the single largest SAF production facility globally. World Energy's Paramount, California facility expanded its dedicated SAF capacity to 150 million gallons per year, supplying Los Angeles International Airport under long-term offtake agreements with United Airlines, Delta, and JetBlue. The combination of feedstock availability (particularly used cooking oil and tallow), existing refinery infrastructure adapted for co-processing, and federal tax credits has created economic conditions where HEFA SAF production generates positive margins even at current scale.

Maersk's Methanol Fleet Transformation

A.P. Moller-Maersk committed over $10 billion to ordering 25 methanol-capable container vessels, with the first vessel, Laura Maersk, entering commercial service in September 2023 and six additional vessels delivered through 2025. Maersk secured green methanol supply agreements with European Energy, OCI Global, and other producers totaling over 750,000 tonnes annually by 2027. This vertically integrated approach, combining fleet orders with fuel offtakes and port bunkering partnerships in Rotterdam, Singapore, and Shanghai, demonstrates the most credible decarbonization pathway in container shipping. Other major lines, including CMA CGM and MSC, have responded with their own alternative fuel fleet orders, primarily LNG-capable vessels with ammonia-ready designs.

CORSIA Offsetting Gains Traction

The Carbon Offsetting and Reduction Scheme for International Aviation became mandatory for international flights between participating states from January 2027, with voluntary participation since 2021 covering 115 countries. By late 2025, CORSIA had driven procurement of approximately 120 million eligible emission units, valued at over $2 billion. Airlines including United, Delta, and Lufthansa have invested in high-quality carbon removal credits to complement SAF strategies, with permanent removal credits from direct air capture and biochar commanding $200-600 per tonne.

What's Not Working

E-Fuel Production Remains Pre-Commercial

Power-to-liquid synthetic fuels, produced by combining green hydrogen with captured CO2, represent the highest-potential SAF pathway (90%+ lifecycle emissions reduction and unlimited feedstock scalability) but remain stubbornly pre-commercial. HIF Global's Haru Oni pilot in Chile produced only 130,000 liters in 2024, while the planned commercial facility in Texas remains in permitting. Infinium's Sacramento e-fuels plant has experienced repeated commissioning delays. Current e-fuel production costs of $7-12 per gallon place them 5-8x above conventional jet fuel, with credible projections suggesting cost parity with HEFA SAF no sooner than 2033-2035. The gap between e-fuel announcements and actual commissioning is widening, not narrowing.

Methane Slip Undermines LNG Shipping Claims

LNG-powered vessels now represent over 30% of newbuild orders by tonnage, yet the climate benefit of LNG is increasingly contested. A 2025 study published in Environmental Science and Technology measured real-world methane slip rates of 3.5-6.2% across 47 LNG-fueled vessels, substantially higher than the 1-2% assumed in industry lifecycle analyses. At 6% methane slip, the 100-year global warming impact of LNG marine fuel exceeds that of conventional heavy fuel oil. The International Council on Clean Transportation concluded that LNG shipping offers "at best marginal and at worst negative climate benefits" compared to conventional fuels, calling into question over $50 billion in LNG vessel investments ordered since 2020.

Green Corridor Infrastructure Lags Vessel Orders

While shipowners have ordered hundreds of alternative fuel-capable vessels, the bunkering infrastructure to supply green methanol, green ammonia, or green hydrogen at scale remains critically underdeveloped. As of late 2025, only three ports globally (Rotterdam, Singapore, and Gothenburg) offer commercial green methanol bunkering, and zero ports provide green ammonia bunkering at commercial scale. The chicken-and-egg problem persists: fuel suppliers will not build infrastructure without guaranteed demand, and shipowners cannot commit to zero-emission operations without guaranteed fuel supply.

Key Players

Established Leaders

United Airlines has committed over $200 million to SAF investments including equity stakes in producers Alder Fuels, LanzaJet, and Infinium, and signed the largest SAF purchase agreement in aviation history with World Energy for 1.5 billion gallons through 2030.

A.P. Moller-Maersk leads the maritime sector with its methanol-capable fleet orders and integrated fuel supply strategy, investing over $10 billion in the transition.

Airbus is developing the ZEROe hydrogen-powered aircraft program targeting entry into service by 2035, while pursuing SAF certification for 100% unblended use as a nearer-term solution.

TotalEnergies has positioned itself as the leading integrated oil major in SAF production, with planned capacity of 1.5 million tonnes per year by 2030 across its European and US refineries.

Emerging Startups

LanzaJet commercialized its alcohol-to-jet pathway at Freedom Pines Fuels in Soperton, Georgia, with 10 million gallons per year capacity operational since late 2024 and expansion plans to 100 million gallons.

Amogy is developing ammonia cracking technology to enable ammonia as a maritime fuel, with successful sea trials on a tugboat in 2023 and a planned 1 MW commercial system for 2026.

Prometheus Fuels pioneered direct air capture-to-jet fuel synthesis, though scaling challenges have led to multiple timeline revisions since its founding in 2020.

Orca Sciences (formerly SkyNRG) operates SAF supply chain management connecting producers, airlines, and airports with certified book-and-claim tracking.

Key Investors and Funders

Breakthrough Energy Ventures has invested in multiple SAF startups including LanzaJet, Infinium, and ZeroAvia, deploying over $500 million across sustainable transport technologies.

BlackRock launched a $1.2 billion infrastructure fund in 2025 specifically targeting low-carbon transport fuel production facilities and bunkering infrastructure.

US Department of Energy allocated $4.3 billion under the Inflation Reduction Act for SAF production incentives and $500 million for clean fuels demonstration projects through the Office of Clean Energy Demonstrations.

Red Flags to Monitor

Executives should track several warning signals through 2026. First, feedstock constraints for HEFA SAF: used cooking oil and animal fat supplies are finite, with the EU projecting a 30% shortfall against mandated SAF volumes by 2030 unless new pathways commercialize. Second, carbon leakage in shipping: as EU ETS costs rise, carriers may reroute via non-EU transshipment hubs, undermining emissions reduction goals. Third, SAF greenwashing through book-and-claim without additionality verification. Fourth, insurance and classification society resistance to ammonia bunkering, which could delay the most promising zero-carbon marine fuel pathway by 3-5 years. Fifth, airline SAF purchase commitments significantly exceeding contracted supply, creating a "commitment bubble" that may not convert to actual consumption.

Action Checklist

• Audit current aviation fuel contracts for SAF blending obligations and CORSIA compliance requirements effective 2027
• Evaluate SAF offtake agreements with credible producers, prioritizing facilities with existing production over announced projects
• Assess shipping fleet EEXI and CII compliance status and model cost scenarios under IMO mid-term measures
• Map port infrastructure availability for alternative marine fuels along primary trade routes
• Quantify Scope 3 transport emissions with carrier-specific data rather than industry averages
• Engage procurement teams on SAF book-and-claim certificates for routes where physical delivery is unavailable
• Stress-test fleet renewal decisions against multiple fuel pathway scenarios including ammonia, methanol, and e-fuels
• Monitor EU ETS shipping costs and model carbon cost pass-through in freight contracts

FAQ

Q: What is the most commercially viable SAF pathway in 2026? A: HEFA (hydroprocessed esters and fatty acids) using waste oils remains the only commercially proven pathway at scale, accounting for over 90% of current SAF production. Alcohol-to-jet (AtJ) is reaching initial commercial scale through LanzaJet and Gevo. Gasification and Fischer-Tropsch pathways using municipal solid waste show promise but remain at demonstration scale. E-fuels (power-to-liquid) offer the greatest long-term potential but are 5-8 years from commercial viability at current trajectory.

Q: Should shipping companies order LNG-fueled or ammonia-ready vessels? A: Given mounting evidence on methane slip and the IMO's trajectory toward zero-emission fuels, new vessel orders should prioritize ammonia-ready or dual-fuel methanol designs over pure LNG. The cost premium for ammonia-ready design is approximately 5-8% over conventional, far less than retrofit costs. Companies with 20+ year asset lifecycles face significant stranding risk with LNG-only vessels if IMO mid-term measures impose stringent well-to-wake standards by 2030.

Q: How should airlines balance SAF procurement with carbon offset purchasing? A: SAF should be the primary decarbonization lever, with offsets reserved for residual emissions that SAF cannot address in the near term. Best practice allocates 70-80% of the decarbonization budget to SAF procurement and 20-30% to high-quality carbon removal credits. Avoid over-reliance on avoidance-based offsets, which face increasing scrutiny under CORSIA's post-2027 eligibility criteria. Ensure SAF procurement uses verified book-and-claim certificates with chain-of-custody documentation.

Q: What is the projected cost trajectory for SAF through 2030? A: HEFA SAF costs are projected to decline from approximately $5-7 per gallon in 2025 to $3.50-5 per gallon by 2030, assuming continued US tax credit support and feedstock diversification. AtJ pathway costs should reach $4-6 per gallon by 2028 as facilities scale beyond 50 million gallons per year. E-fuel costs remain highly uncertain but are unlikely to fall below $6 per gallon before 2032 without breakthrough electrolyzer cost reductions and significantly cheaper renewable electricity.

Q: How do green corridors work and should my company participate? A: Green corridors are collaborative agreements between ports, shippers, fuel suppliers, and regulators to create zero-emission trade routes. Participation signals climate leadership and provides early access to alternative fuel infrastructure. Companies should evaluate corridors along their highest-volume routes and engage with port authorities and industry coalitions like the Getting to Zero Coalition. Early participants benefit from preferential bunkering access and potential regulatory credits as IMO formalizes corridor incentive mechanisms.

Sources

• International Air Transport Association. (2025). SAF Production Tracking Report, Q4 2025. Montreal: IATA.
• International Maritime Organization. (2025). Fourth IMO GHG Study 2024: Final Report. London: IMO.
• International Council on Clean Transportation. (2025). Real-World Methane Emissions from LNG-Fueled Ships. Washington, DC: ICCT.
• BloombergNEF. (2026). Sustainable Aviation Fuel: Market Outlook 2026. New York: Bloomberg LP.
• Getting to Zero Coalition. (2025). Annual Progress Report on Green Shipping Corridors. Copenhagen: Global Maritime Forum.
• US Department of Energy. (2025). SAF Grand Challenge Roadmap: 2025 Progress Update. Washington, DC: DOE.
• European Commission. (2025). ReFuelEU Aviation: Implementation Progress Report. Brussels: EC Directorate-General for Mobility and Transport.