According to a new report by UnivDatos Market Insights, the North America Sustainable Aviation Fuel Market is expected to reach USD 13,794.21 million by 2032, growing at a CAGR of 32.8%. The North American sustainable aviation fuel (SAF) market has witnessed a remarkable surge in recent years, driven by the growing demand for environmentally friendly air travel. As airlines and passengers prioritize reducing carbon footprints, adopting SAF has become a crucial strategy to address the aviation industry's environmental impact.
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“SURGING DEMAND FOR SUSTAINABLE AIR TRAVEL”
As the global community strives to find ways to reduce CO2 emissions and fight climate change, the air transport sector has its challenges and prospects. To this end, North America has scaled up its efforts towards SAF as the region benefits from supportive energy policies and associations supporting environmentally sustainable aviation.
The Inflation Reduction Act of 2022: This piece of legislation represented a significant change in approach by providing tax incentives to encourage the manufacture and consumption of SAFs. This can be true, and, in some cases, it gives a tax credit of up to USD 1. 1. 0.75 per gallon for SAF that attains a minimum reduction of well-to-wheels GHG emissions by 50% relative to conventional jet fuel. It is essential to address what has been described as the high cost of manufacturing biofuels to a level that may create an incentive to fund and develop SAF.
"GROWING GOVERNMENT INITIATIVES AND INCENTIVES"
Governments across North America have not remained idle on this issue and have made policies and incentives for SAF production and usage. In the USA, the Sustainable Aviation Fuel Grand Challenge—2021 initiative, intended to reach a minimum of 3 billion gallons of SAF per year by the end of 2030, is underway. Also, SAF has received specific attention in the Inflation Reduction Act, approved in 2022, which provides tax credits and other fiscal enablers encouraging the adoption of SAF. For instance, the FAA introduced the Aviation Climate Research (ACR) program in the FY22 Presidential Budget Request for the FAA at a proposed USD 50M. The ACR program will invest in research that has a transformative impact potential to reduce greenhouse gas emissions from aviation in support of the U.S. climate change goals. The US Department of Energy has also invested in several projects focused on developing and commercializing SAF technologies, which has further created awareness among the users and created the demand for SAF in the region. For instance, DOE, working collaboratively with NASA, is investing USD 115M to develop battery technologies that can achieve the energy density needed for both near-term electric vertical take-off and landing and short-range consumer aircraft use cases and may potentially achieve the energy density required for long term longer range electric aircraft as well.
"PRIVATE PLAYERS AND UPCOMING PROJECTS"
Several private companies are investing in SAF technologies and production facilities, driving the market's growth. Some notable instances include:
· Red Rock Biofuels: In 2022, Red Rock Biofuels, a California-based company, announced the construction of an SAF production facility in Oregon, with a capacity of 17 million gallons per year.
· Gevo: In 2023, Gevo, a Colorado-based company, announced a partnership with NATO's Allied Command to develop and supply SAF to the military sector.
· United Airlines: In 2022, United Airlines announced a partnership with Dimensional Energy, a New York-based company, to develop and commercialize SAF technologies.
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CONCLUSION
With rising consciousness of decarbonization within the aviation industry, supporting authorities and private organizations, and funding from authorities, the North American SAF market is ready for exponential development. Thus, the significant importance of developing the SAF market can be noted as the region's focus on reducing greenhouse gas emissions is becoming increasingly important. Unrelenting pursuits in investment and technological advancement have positioned the SAF market for even higher growth in the future to avert climate change.