Sustainable aviation fuel (SAF) is no longer waiting in the wings—aviation’s sustainability journey is airborne in 2025. Global signals are loud and clear: the world is serious about decarbonizing flight. Governments are stepping up with policy push and Airlines are putting skin in the game, with multi-year offtake agreements and investments in early-stage SAF ventures.
Yet despite the tailwinds, SAF still faces headwinds at high altitude. Kline has been tracking these signals for SAF globally – let’s deep dive into the learnings from the first quarter.
As we delve into the first quarter of 2025, the Sustainable Aviation Fuel (SAF) sector is experiencing a whirlwind of activity, with Asia and Europe taking the lion’s share of the spotlight. This quarter has been marked by a concerted focus on airline refuelling, offtake agreements, pilot projects, and a strategic push by producers to trim production costs. It’s a classic case of “striking while the iron is hot,” as these regions drive the SAF market forward with their dynamic initiatives.
Winds of Change in Policy and Regulation
The clearest signals in 2025 of the incoming winds of change, is the policy environment aligning in favour of SAF.
In Europe, the ReFuel EU initiative, launched in January, has been a catalyst for change, significantly accelerating SAF adoption. Europe is positioning itself as a lynchpin in the SAF market, attracting global players with its robust regulatory mandates and steadfast airline commitments. The UK has also thrown its hat into the ring, implementing a 2% SAF mandate in the fuel mix from 2025 and I nitiating a consultation on a “Revenue Certainty Mechanism” to support SAF producers. This move aims to mitigate financial risks and stimulate investment, proving that “nothing ventured, nothing gained.”
Across the Atlantic, the U.S. witnessed a significant retreat in clean energy funding at the start of the year owing to uncertainty around regulations. However, the US recently passed an amended bill paving the way for a key renewable fuel production tax credit. The reconciliation bill now extends the 45Z clean fuel production tax credit through December 31st, 2031. Meanwhile, Denmark has revised its original plans for SAF use in domestic flights, opting for a 50% blend instead of 100%, due to certification hurdles.
In Asia, countries are beginning to roll out SAF incentives, set SAF targets, and enhance feedstock availability. These efforts are fostering partnerships between Asian fuel suppliers and airlines, leading to increased refuelling activities and patent filings across the region. Thailand is crafting an excise tax framework to position itself as a low-carbon aviation hub in ASEAN, while Indonesia plans to implement a 3% SAF mandate starting in 2026. Hong Kong has announced its SAF targets, advancing sustainable practices in the industry.
Where are SAF Signals Coming From This Quarter?
Airline and competition activity has been most prominent in Asia, with several airlines worldwide securing SAF supply agreements with Asian fuel producers, underscoring the region’s growing influence in the industry. Meanwhile, in Europe, more than one SAF project has been delayed, reflecting a shift in fuel suppliers’ priorities toward financial performance.
Similarly, China has experienced project delays, indicating a re-evaluation of strategic goals. On the technology front, updates have mainly stemmed from developed markets such as Europe and the United States, where innovation continues to drive progress.
Across Asia, North America, and Europe, there has been a similar increase in policy and regulation updates, driven by regulatory changes, SAF targets, and incentives. These regional developments highlight the diverse dynamics at play in the SAF landscape, as stakeholders navigate a complex web of priorities and opportunities.
For aviation clients, the focus is shifting toward emissions accounting, book-and-claim systems, and SAF registry interoperability. The IATA-123Carbon collaboration and the launch of the AvfuelZero portal are early indicators of this trend.
For energy producers, the key variables are feedstock economics, certification pathways, and offtake durability. Kline’s SAF Watch Tower and Tracker are surfacing these signals in real time, helping clients benchmark progress, identify inflection points, and recalibrate strategy.
Aviation’s SAF Imperative: Beyond Compliance
For airlines, SAF is no longer a compliance checkbox—it’s a strategic lever. Q1 saw a wave of long-term procurement deals: American Airlines with Eneos, Delta with Cosmo Oil, and Finnair with DB Schenker. These agreements are not just about fuel—they’re about future-proofing operations against regulatory and reputational risk.
This quarter Kline has noted the rise of emerging new customer segments actively advocating for SAF adoption. Logistics providers, MROs, and FBOs are stepping up, driven by decarbonization targets and mounting pressure from sustainability-focused clients. DHL has been a trailblazer, signing SAF agreements with a diverse set of global clients and securing a landmark deal with Neste for an offtake of 300,000 tons of neat SAF per year through 2030. Strategic partnerships with Cosmo Oil Marketing in Japan and DB Schenker are expanding SAF usage, while collaborations with Mercedes-Benz are facilitating record SAF purchases, showcasing a growing trend of corporate buyers supporting SAF through direct contributions.
Original Equipment Manufacturers (OEMs) are also stepping up. Airbus launched a Book & Claim initiative and began SAF operations at its Mirabel site in Canada. In parallel, it partnered with ICAO to conduct SAF feasibility studies in Latin America, marking the first such initiative funded by an aerospace company.
Airports are playing a more active role as well. Heathrow extended its SAF incentive scheme, Cluj-Napoca began blending SAF into its fuel mix, and Hong Kong International Airport received its first SAF delivery from Sinopec. These developments signal a broader shift: SAF is becoming embedded in the aviation infrastructure.
Innovation Continues
On the technology front, key advancements include progress in SAF production pathways, the development of new aircraft capable of flying on up to 100% SAF, and the exploration of new feedstocks like lignocellulosic, wood, and jute. Fuel suppliers are facilitating SAF adoption through digital tools for reporting and real-time regulatory compliance tracking, while prioritizing low-cost SAF by exploring cost-effective production methods. Chicago-based Syntholene Energy is exploring geothermal energy resources to power eSAF plant modules, and French developer Global Bioenergies is working on low-cost SAF solutions.
Looking Ahead: SAF’s Inflection Point
The remainder of 2025 will likely bring sharper regional divergence. Asia’s momentum may accelerate, buoyed by policy clarity and feedstock availability. Europe will consolidate its early lead, while the U.S. navigates a more fragmented policy environment.
Cross-sector partnerships will become more common. Logistics, pharma, and automotive players are already co-funding SAF adoption, not just for emissions reductions but for supply chain resilience.
The SAF conversation is shifting, from pilot projects to portfolio strategy. The firms that succeed will be those that can read the signals, interpret the noise, and act with conviction. If you’re interested in learning how to identify and interpret these signals, explore our dedicated page to discover more about Kline’s SAF Watch Tower.
