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Why do more businesses need to invest in fossil-fuel alternatives?

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Why do more businesses need to invest in fossil-fuel alternatives?


The aviation industry is at a turning point. Flights account for around 2.5% of global CO₂ emissions, and demand is only growing. If we want to keep flying without heating up the planet, we need to replace fossil jet fuel with sustainable alternatives. That’s where Sustainable Aviation Fuel (SAF), also known as biofuel, comes in.


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What Is SAF (Sustainable Aviation Fuel)?


Sustainable Aviation Fuel (SAF) is a renewable alternative to traditional jet fuel. It is produced from sustainable sources such as used cooking oil, agricultural residues, algae, and waste materials. SAF significantly reduces carbon emissions, as it recycles carbon dioxide that is already present in the atmosphere, resulting in a lower environmental impact compared to fossil fuels.

Key Benefits of SAF:

  • Compatibility: SAF works seamlessly with existing aircraft and airport infrastructure, meaning no costly upgrades or new planes are required.
  • Emission Reduction: It can reduce lifecycle carbon emissions by up to 80% when compared to conventional jet fuel (source: IATA).
  • Renewable Sources: SAF is produced from materials that do not compete with food crops or deplete natural resources.


Examples of global adoption of SAF:


Neste MY SAF is a widely used type of SAF that is already in use at major airports such as Frankfurt, Los Angeles, and Changi. Major airlines like Lufthansa and Delta have included it in their climate action strategies to help reduce their emissions footprint, with Air France-KLM Group signing one of the largest SAF supply agreements to date, committing to deliver more than 1 million tons (approx. 1.26 billion liters) of Neste MY SAF over eight years, starting in 2023, even adding a new SAF supply deal with TotalEnergies to supply up to 1.5 million tons of SAF over ten years, extending through 2035.

Beyond large supply agreements, KLM has also been a pioneer in real-world SAF adoption. From operating the world’s first passenger biofuel flight in 2009 to blending SAF into every departure from Amsterdam Schiphol since 2022, the airline has consistently pushed the boundaries of sustainable flying. Other carriers are following suit: United, Virgin Atlantic, and Emirates have completed landmark 100% SAF flights, while Lufthansa and British Airways are investing in new production facilities. Together, these steps signal a shift — SAF is moving from small-scale trials to a core pillar of global aviation strategies.



Can alternative fuels like SAF really accelerate the transition?


Sustainable Aviation Fuel offers the aviation industry's most practical near-term solution for achieving significant emission reductions. While hydrogen and electric planes are exciting, they’re still decades away for long-haul routes, where most emissions occur. SAF is ready now. Recent Airbus test flights using 100% SAF showed soot emissions drop by more than half, and contrail formation (a big but often overlooked climate impact) was significantly reduced.

Major airlines are taking notice: Virgin Atlantic has flown a 100% SAF-powered transatlantic flight, and United Airlines has committed to billions of gallons in SAF purchases. The technology is here — it just needs scaling.


The environmental benefits of SAF are substantial and immediate:


✅ Up to 80% reduction in lifecycle carbon emissions compared to conventional jet fuel
✅ Immediate compatibility with existing aircraft fleets and fuel distribution systems
✅ Reduced particulate emissions that contribute to improved air quality around airports
✅ Lower sulphur content that decreases acid rain formation

✈️ Recent test flights demonstrate SAF's potential
Airbus's groundbreaking study using 100% SAF showed remarkable results - soot emissions dropped by up to 56%, and contrail ice crystal formation reduced significantly. These findings prove that SAF not only reduces CO2 emissions but also addresses aviation's broader climate impact.

📈 The scalability factor sets SAF apart from other alternatives
While electric aircraft remain limited to short regional flights and hydrogen technology faces infrastructure challenges, SAF can power long-haul international routes today. This capability makes it essential for decarbonising the aviation segments responsible for the majority of emissions.

👍Major airlines demonstrate growing confidence in SAF's viability
United Airlines has committed to purchasing 3.4 billion gallons of SAF, whilst British Airways invested in multiple SAF production facilities. These substantial commitments provide market signals that accelerate production capacity and drive down costs through economies of scale.




The uneven playing field: How subsidies keep fossil fuels cheap

So why isn’t SAF everywhere already? Because the market is tilted in favor of fossil fuels. Traditional jet fuel enjoys huge subsidies and tax exemptions, making it artificially cheap. In Europe, airlines pay zero duty on fuel, and international flights are exempt from VAT.

Globally, fossil fuel subsidies run into the trillions — the OECD and IATA estimate anywhere between $1–7 trillion depending on how you count direct aid, tax breaks, and hidden costs. The IMF puts the figure at around $7 trillion in 2022, when you include not only direct subsidies but also the unpriced external costs of climate change, air pollution, and health impacts. These subsidies don’t just make fossil jet fuel cheaper; they actively hold back investment in renewable energy and SAF.

The aviation sector benefits disproportionately from these distortions:
  • Jet fuel tax exemptions not applied to road transport fuels.
  • International aviation fuel largely untaxed under current treaty arrangements.
  • Environmental costs (climate damage, noise, and air pollution) left unpriced.
  • Health impacts from emissions absorbed by society, not airlines or fuel suppliers.

The consequences are serious: artificially cheap fossil fuels reduce incentives for SAF investment, slowing production scale-up and locking in aviation’s dependence on kerosene. Airlines naturally choose the cheaper option, reinforcing this cycle.

The cost gap makes the distortion visible. Today, SAF typically costs 2–3 times more than conventional jet fuel. For example, fossil jet fuel averages £400–600 per tonne, while SAF is in the range of £800–2,000 per tonne. And this doesn’t even account for the “hidden costs” of fossil fuels: climate and health damages estimated at £100–200 per tonne of CO₂ equivalent.

Policy intervention is essential to fix this market failure, and steps are already underway:
The EU’s Emissions Trading System (ETS) now includes aviation, adding a price to fossil fuel emissions.
The ReFuelEU Aviation initiative will mandate minimum SAF blending, starting at 2% in 2025 and rising to 63% by 2050. In the UK, a proposed SAF mandate will guarantee demand, creating investment certainty for producers.

The bottom line? As long as fossil fuels are subsidized and under-taxed, SAF can’t compete on a level playing field. Phasing out subsidies and redirecting public funds into sustainable fuels is essential if aviation is to have a fossil-free future.






💡Why investing in alternative fuels matters

Think about smartphones. Ten years ago, they were clunky and expensive. Today, they’re everywhere — sleek, powerful, and affordable. That transformation happened because of one thing: investment at scale.
The same logic applies to alternative fuels like Sustainable Aviation Fuel (SAF). Right now, it’s more expensive than fossil jet fuel — but that’s because production is still tiny. With greater investment and scaling, costs will fall fast, just as they did for solar, wind, and smartphones.

Here’s what investment in SAF unlocks:

💰 Lower costs — meeting just 10% of global aviation demand could cut prices by 30–40%.

🧑‍🤝‍🧑 Jobs across the value chain — from biotech labs and refineries to farming communities producing feedstock.

⚡ Energy independence — reducing reliance on imported oil by diversifying into local renewable fuels.

💪 Resilience to regulation — as carbon pricing and emissions rules tighten, companies that adopt SAF early will avoid future costs.

🤖 Innovation spillovers — advances in carbon capture, synthetic fuels, and process engineering that benefit multiple industries.

The market potential is huge. Analysts project SAF will reach $15 billion by 2030, with annual growth rates over 60%. Countries and companies that build capacity now won’t just cut emissions — they’ll lead the clean energy economy of tomorrow.



Learning from renewable energy's investment success

The energy transition has already shown how fast change can happen with the right support. Between 2010 and 2021, solar capacity increased 21-fold, while costs fell by 82%. Offshore wind capacity rose 17-fold, with costs down 41%.
These leaps didn’t happen by accident. They were the result of early investments, policy support, and scale. The same virtuous cycle can happen for aviation fuels if we act now.


Test flights prove the future is here

SAF isn’t just theory — it’s already flying. Airbus, Boeing, and Virgin Atlantic have all run successful flights on 100% sustainable aviation fuel, showing it works seamlessly with today’s aircraft and infrastructure.
The results are impressive: Airbus tests found 56% fewer soot particles and fewer contrails, while Virgin Atlantic’s transatlantic flight proved SAF can power long-haul routes with paying passengers — no modifications required.
The industry is backing it too. IATA projects SAF will deliver 65% of aviation’s emissions cuts by 2050, and policies like the EU’s ReFuelEU Aviation mandate (2% SAF by 2025, scaling to 63% by 2050) guarantee growing demand.
Add ICAO’s (The International Civil Aviation Organisation) global standards and partnerships between manufacturers, airlines, and fuel producers, and the message is clear: SAF isn’t a future idea — it’s ready now.


Making SAF accessible for all

For SAF to truly take off, it needs to be cheaper and easier to access. Right now, production covers less than 0.1% of aviation’s fuel demand. Hitting the industry’s 2030 target of 10% means scaling output by 100 times in just a decade — a massive leap that requires bold investment and supportive policies.
Solutions are already emerging. Countries like the Netherlands are investing billions in SAF hubs near major airports, while long-term airline purchase agreements are giving producers the certainty they need to scale. Advances in biotech, carbon capture, and synthetic fuels promise even greater efficiency and lower costs.
At the business travel level, platforms like Goodwings make it easy for companies to be part of the transition. By integrating SAF directly into travel bookings, Goodwings turns every trip into an investment in fossil-free aviation — no extra hassle, just measurable impact.




Beyond SAF: Other Fossil-Free Aviation Alternatives

While SAF is the most practical solution today, it isn’t the only pathway to a fossil-free aviation industry. Other technologies are being developed that could play a role in the longer term:

Green Hydrogen: Produced using renewable electricity and water, hydrogen can be used in fuel cells to power electric motors, or combusted directly in modified jet engines. Hydrogen-powered planes could deliver zero CO₂ emissions in flight, but scaling will require major new infrastructure and aircraft designs. Airbus, for example, is targeting hydrogen aircraft for entry into service by 2035.

Electric Aircraft: Battery-powered planes are already flying on short regional routes, with start-ups like Heart Aerospace and Eviation working to scale the technology. While battery energy density limits their use to shorter distances, they could transform short-haul travel and reduce reliance on jet fuel for commuter flights.

Power-to-Liquid Fuels (e-fuels): These synthetic fuels are made by combining captured CO₂ with hydrogen from renewable energy. They’re still expensive to produce, but in the long run they could provide a scalable, carbon-neutral substitute for fossil kerosene.

Each of these technologies faces challenges around infrastructure, cost, and scalability — especially for long-haul flights. That’s why SAF remains a critical solution for the next two decades, bridging the gap until hydrogen, electric, and synthetic fuels can take on a bigger share.


Resources:

https://ourworldindata.org/co2-emissions-from-aviation

https://www.iea.org/energy-system/transport/aviation

https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet-sustainable-aviation-fuels/

https://transport.ec.europa.eu/transport-modes/air/environment/refueleu-aviation_en

https://www.legislation.gov.uk/ukdsi/2024/9780348261714/pdfs/ukdsiod_9780348261714_en_001.pdf

https://www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021

https://www.bcg.com/publications/2025/sustainable-aviation-fuels-need-a-faster-takeoff

https://www.airbus.com/en/innovation/energy-transition/hydrogen/zeroe-our-hydrogen-powered-aircraft

https://heartaerospace.com/

https://www.icao.int/environmental-protection/sustainable-aviation-fuels-saf

https://www.neste.com/products-and-innovation/sustainable-aviation/sustainable-aviation-fuel

https://www.airbus.com/en/newsroom/press-releases/2024-06-worlds-first-in-flight-study-of-commercial-aircraft-using-100

https://corporate.virginatlantic.com/gb/en/media/press-releases/worlds-first-sustainable-aviation-fuel-flight.html

https://www.imf.org/en/Publications/WP/Issues/2023/08/22/IMF-Fossil-Fuel-Subsidies-Data-2023-Update-537281


https://www.transportenvironment.org/topics/planes/price-of-aviation


https://www.cnbc.com/2022/02/11/sustainable-aviation-fuel-costs-more-but-consumers-willing-to-pay-iata.html








Image of Josefine Bovbjerg
Written by Josefine Bovbjerg for Goodwings

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