2026 Sustainable Aviation Fuel (SAF) Market Outlook

As the aviation sector pushes toward decarbonization targets, Sustainable Aviation Fuel (SAF) is moving from long‑term ambition to near‑term commercial reality.

Insights from recent industry discussions indicate that the market is entering a pivotal phase in 2026. The climate is defined by growing airline demand, uneven policy support, tightening feedstock availability, and an evolving pricing landscape.

In this post, we break down the primary factors driving the SAF market as we move across the year ahead.

Demand: Airline Commitments Drive the Market

Airline net‑zero pledges remain the primary demand driver for SAF.

Major carriers continue to sign multi‑year offtake agreements, but not necessarily because SAF is cost‑competitive today. Instead, access is becoming a strategic necessity.

Demand growth is increasingly voluntary, but it's irreversible. Once airlines commit publicly, backtracking becomes a risk for damaging their reputation.

Looking ahead to 2026, demand is expected to rise steadily rather than exponentially. Airlines are prioritizing supply security and compliance optionality over aggressive volume targets. This holds especially true as they navigate uncertain macroeconomic and ticket‑pricing environments.

Policy Landscape: Supportive But Fragmented

Policy remains a critical yet inconsistent pillar of the SAF market. While long‑term signals such as ICAO’s CORSIA framework and national SAF blending ambitions provide directional support, near‑term implementation gaps persist.

Key takeaways from the discussion include:

• Incentives matter more than mandates in the short term. Where credits, tax incentives, or contract‑for‑difference mechanisms exist, projects move faster.
• Policy uncertainty is influencing project timing. Developers are delaying final investment decisions until clearer guidance emerges on post‑2025 support structures.
• Regional divergence is widening. Some markets are accelerating SAF adoption, while others remain in ‑and‑wait-and-see mode.

In 2026, SAF growth is likely to concentrate in jurisdictions with clearer, bankable policy frameworks.

Feedstocks: The Structural Constraint

Feedstock availability remains the most significant limiting factor for SAF scale‑up. The transcript repeatedly underscores that SAF is not constrained by technology alone, but by competition for low‑carbon feedstocks.

Key dynamics include:

• Intensifying competition with renewable diesel and biofuels
• Increasing scrutiny on feedstock sustainability and traceability
• Limited near‑term scalability for advanced pathways

As a result, 2026 will likely see SAF producers favor incremental capacity expansions and flexible production strategies rather than large, single‑bet investments.

Read More: Feedstock Fundamentals: What Are Biofuels Made From?

Pricing and Economics: Still a Premium Fuel

SAF pricing is expected to remain well above conventional jet fuel through 2026. Cost reductions are anticipated over time. And near‑term economics depend heavily on incentives, corporate willingness to pay, and book‑and‑claim mechanisms.

Additional economic factors at play:

• Compliance and Risk Management: Airlines increasingly view SAF as a compliance and risk‑management cost, not just a fuel expense
• Sharing Downside Risk: Long‑term contracts are being structured to share downside risk
• Limited Price Clarity: Price transparency remains limited, complicating broader market participation

This reinforces SAF’s position as a strategic input rather than a commoditized fuel in the near term.

Infrastructure and Logistics: Quiet Progress

While often overlooked, infrastructure readiness is improving. Blending, certification, and airport logistics are advancing incrementally, reducing friction for SAF deployment.

However, infrastructure expansion is following demand, not leading it.

In 2026, infrastructure constraints are unlikely to cap demand outright. But they will influence where SAF volumes materialize.

What 2026 Signals for the Long Term

The SAF market in 2026 will not yet reflect full‑scale transformation, but it will confirm trajectory. The year is shaping up to be a proving ground for:

• Policy Credibility
• Feedstock Strategy Discipline
• Airline Procurement Sophistication

Momentum is real, but it remains selective. Stakeholders who align supply, policy exposure, and demand strategy will be best positioned as SAF transitions from early adoption to mainstream deployment later in the decade.

Bottom line: 2026 may not necessarily be the breakthrough year. But it will be the year the SAF market shows whether its foundations are strong enough to support scale.

Get a Spotlight on SAF Market Pathways with Free eBook

To make sense of the evolving SAF market in 2026, it helps to understand how the fuel itself is made and the pathways that feed into it. That’s where our biofuels eBook From Feedstocks to Fuel becomes a valuable companion resource.

Whether you’re new to SAF or deep into strategy and procurement, the eBook breaks down the feedstocks, conversion technologies, lifecycle considerations, and sustainability frameworks that drive sustainable aviation fuel production. All of these factors are key to interpreting the demand signals, pricing dynamics, and policy incentives shaping the market today.

To deepen your understanding of the structural factors driving SAF growth and better anticipate where this industry is headed, our eBook offers the foundational knowledge needed to contextualize the market forces we’ve discussed here.

Download the eBook today.