With extensive experience in energy management and renewable energy, Christopher Hailstone joins us to break down the complex challenges hindering the aviation industry’s transition to cleaner fuels. As a leading utilities expert, he provides critical insights into the economic and policy hurdles surrounding sustainable aviation fuel (SAF). Our conversation will explore the significant production shortfalls, the steep price premium that makes SAF a tough sell, and the debate over the most effective policies—from rigid mandates to innovative voluntary programs—designed to accelerate its adoption.
With sustainable aviation fuel production accounting for less than one percent of total jet fuel use, what are the primary bottlenecks in scaling up supply, and what specific steps can producers take to bridge this significant gap between current output and industry targets?
The numbers are quite stark and speak for themselves. The fundamental bottleneck is that progress has simply been much slower than anyone anticipated. We saw about 1.9 million tonnes of SAF produced in 2025, which sounds like a lot until you realize it’s a mere 0.6 percent of global jet fuel consumption. This figure was a real wake-up call, as it fell short of earlier estimates and exposed a concerning chasm between our targets and the actual supply hitting the market. To bridge this, producers need to move beyond pilot projects and focus on securing feedstock and building commercial-scale refineries, but the economic case remains incredibly challenging without stronger, more consistent demand signals from the industry.
Given that sustainable aviation fuel can cost more than double conventional jet fuel, what are the key drivers of this price premium? Can you detail a realistic pathway, with key milestones, for achieving price parity without relying solely on government subsidies?
The cost premium is the elephant in the room. At its best, SAF is more than double the price of conventional jet fuel, and in some regions with strict mandates, we’re seeing that premium soar to four times higher. This isn’t just about one factor; it’s a combination of limited production scale, complex refining processes, and competition for feedstocks. A realistic pathway to price parity involves, first and foremost, achieving economies of scale. We need to aggregate demand to give producers the confidence to invest in larger facilities. A key milestone would be the success of collaborative purchasing models, which can create a stable market and drive down costs through volume, rather than forcing airlines to buy on a volatile spot market.
Some argue that mandatory blending rules, like those in the European Union, drive up costs and discourage voluntary adoption. From your perspective, what are the trade-offs between mandates and voluntary incentives, and what would an ideal policy framework look like to encourage widespread SAF use?
This is the central policy debate right now. The European Union’s approach guarantees a certain level of uptake—starting at two percent and rising to a very ambitious seventy percent by 2050. The trade-off, however, is that these mandates can create localized price shocks and, as we’ve heard from industry leaders, actually reduce the motivation for airlines to go above and beyond the minimum requirement voluntarily. An ideal framework would be a hybrid. It would combine a modest, predictable mandate to establish a baseline demand with powerful incentives, like a central purchasing system that allows corporations and airlines to collaboratively procure SAF, thereby fostering a more organic, market-driven adoption.
Singapore is introducing a 1% SAF requirement funded by a passenger levy while also trialing a central purchasing system with corporate partners. What are the pros and cons of this dual approach, and how could it serve as a model for other aviation hubs?
Singapore’s model is fascinating because it directly tackles both the funding and demand challenges. The clear pro is that the passenger levy creates a transparent and direct funding stream for the higher fuel cost, making the 1% requirement financially viable from day one. However, the con is the direct impact on ticket prices, which can be a sensitive issue for consumers and hub competitiveness. The genius here is pairing it with the voluntary trial involving partners like Google and Temasek. This central purchasing system aggregates demand from those willing to pay a premium, which can help stabilize the market and potentially lower costs over time. It’s an excellent model for other hubs because it shows how to blend a regulatory push with a market-pull mechanism.
What is your forecast for the sustainable aviation fuel market?
My forecast is one of cautious, hard-won progress. The gap between ambition and reality is significant, and we won’t see SAF become mainstream overnight. The market will likely continue to be fragmented, with price and availability varying dramatically by region. However, the innovative policy experiments we’re seeing in places like Singapore offer a blueprint for a more sustainable path forward. I believe the next five years will be defined not by a sudden global surge, but by the success or failure of these regional models that intelligently blend mandates with market-based incentives to build a stable, scalable foundation for the future of clean aviation.
