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The aviation sector is entering a decisive new phase, increasingly defined by binding obligations for decarbonization and the use of sustainable aviation fuel (SAF) to meet these obligations. Global policy frameworks such as the EU’s ReFuelEU Aviation regulation and emerging national SAF blending mandates are accelerating rapidly, placing airlines under intensifying compliance and commercial pressure.
As these mandates scale, airlines face a structural challenge: the cost of decarbonization is rising just as the planning window narrows. This widening uncertainty echoes trends seen across the SAF market, where tightening regulations coincide with volatile feedstock pricing and uneven regional supply development.
Despite strong policy momentum, supply is expected to lag mandated demand through the late 2020s making compliance more expensive and more complex. Even with announced projects, production growth is not keeping pace with regulatory ambition, a reality highlighted across industry analyses projecting shortfalls in the next decade. At the same time, airlines are being asked to secure long‑duration offtake agreements, often spanning 10 to 15 years, while most market indicators extend only a few quarters ahead. The result is a structural mismatch between long‑term commitments and short‑term data horizons.
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For airlines, this imbalance carries concrete consequences: rising uncertainty around future costs, limited transparency into SAF feedstock dynamics, and difficulty assessing how evolving mandate pathways will affect airline route economics and contract exposure. Rather than a narrow compliance issue, it has become a fuel‑strategy, risk‑management, and competitive‑positioning challenge, specifically as carriers sign decade‑plus SAF offtake agreements while market price signals and liquidity remain nascent.
In this environment, airlines must make unprecedented long‑term decisions with short‑term visibility, complicating compliance and procurement planning. As a result, airlines must increasingly depend on clear, independent analytics concerning SAF pricing, but also longer-term issues such as tracking regulatory requirements, and quantifying risk across multiple scenarios. High‑confidence data is no longer merely supportive; it is a strategic advantage.
SAF prices are driven primarily by production costs, and feedstocks make up the largest share of that cost. Key inputs such as used cooking oil, tallow, and soybean oil remain highly volatile, with frequent price swings and regional fragmentation that complicate planning. Competition with renewable diesel, trade friction, and ongoing feedstock scarcity add further uncertainty to pricing. Because of this, production cost, rooted in real feedstock economics, is the most reliable indicator of SAF’s true market value.
Aligning with both CORSIA and growing SAF‑related mandates is becoming increasingly challenging for airlines. Each framework carries different accounting rules, timelines, and compliance expectations, making it difficult to build a unified decarbonization strategy. Internal carbon‑modeling work highlights how voluntary corporate emissions‑reduction goals can further complicate this landscape by adding a separate layer of requirements. Together, these overlapping systems create a moving target requiring careful navigation to remain credible and compliant.
Short‑ and long‑term policy uncertainty is creating a form of paralysis across the SAF value chain. Delayed regulations, inconsistent support structures, and shifting sustainability criteria make it difficult for producers and airlines to commit capital with confidence. Forecasts indicate theoretical SAF blending rates fall sharply once investment risks are highlighted, underscoring how fragile the outlook remains. This uncertainty highlights the need for stronger long‑term forecasting to break the stalemate between airlines and producers and enable meaningful scale‑up of SAF production. For procurement teams, this means financial risk is structural, not incidental.
Fastmarkets’ daily assessments help break open the feedstock “black box” by combining real trade activity monitoring with detailed cost‑of‑production models across key inputs like UCO, tallow, corn oil, and soybean oil. These assessments also incorporate region‑specific SAF base‑cost calculations for US and EU markets, providing a granular and verified view of the true cost drivers behind SAF.
This approach goes far beyond surface‑level commodity pricing, offering a transparent picture of how feedstock markets shape SAF economics. With this clarity, procurement teams can negotiate using data rather than instincts, strengthening long‑term contracting and reducing exposure to feedstock volatility. It also supports future growth by identifying opportunities to expand SAF feedstock options through insights informed by Fastmarkets’ Agriculture data.
The graph shows the Houston SAF base‑cost curve rising sharply from June through early August, driven by seasonal feedstock tightness and summer demand. After peaking above $7.50/gal, costs ease through the autumn as feedstock supply conditions improve. While seasonality is a factor, it does not the only driver in the SAF assessment. By Q4, prices stabilize near $6.40–$6.50/gal, underscoring how SAF production costs remain highly sensitive to feedstocks.
The graph shows two European SAF cost benchmarks, an assessment for production units maximizing SAF production (SAF Max) and those maximizing hydrotreated vegetable oil (HVO Max), providing an understanding of the trade-off between products. Both SAF streams are trending steadily downward from June through November as feedstock markets softened and regional supply stabilized. Throughout the period, HVO Max remains consistently $100–$200/tonne higher than SAF Max, reflecting a structural cost premium tied to HVO‑oriented feedstock mixes.
Fastmarkets’ SAF assessments rely on a transparent cost‑of‑production methodology incorporating Fastmarkets feedstock prices, operational costs, and regional plant economics, rather than sparse or undisclosed spot transactions. By grounding each assessment in verified cost drivers, these benchmarks provide airlines with a stable, manipulation‑resistant price signal that reflects true market fundamentals rather than contract opacity or limited spot activity.
Fastmarkets brings CORSIA and voluntary carbon markets into a single, unified analytical system, giving airlines a clearer view of their full compliance and emissions‑reduction landscape. By integrating active CORSIA modeling with a comprehensive SAF mandates database, the platform helps airlines quantify offsetting requirements, compare credit options, and understand how policy changes affect future exposure.
This consolidated approach also connects lifecycle emissions data, credit standards, and emerging SAF‑linked incentives, reducing the uncertainty created by fragmented carbon frameworks. For airlines under pressure to meet tightening climate commitments, this unified carbon intelligence turns a complex, multi‑market problem into a transparent, decision‑ready view of risk and opportunity.
Fastmarkets’ services help airlines understand what instruments to use to better navigate CORSIA, from upstream approaches focused on SAF use, to downstream solutions, such as CORSIA-eligible carbon credits.
Fastmarkets’ carbon offerings on CORSIA encompass a weekly spot price for eligible credits and forecasts on expected prices, demand and supply up to 2035, covering the scheme’s phase one and phase two. To boost transparency and granularity, demand and supply outlooks are broken down by individual airline obligations – the former – and by registries and credit types, the latter.
While supply of existing eligible-credits remains limited, with fewer than 20m available for phase one, as of 28 January 2026, first signs of mandated demand emerged towards the end of 2025, when ICAO announced around 55m of airline obligations for 2024. The imbalance between demand and supply is set to support prices over the remainder of phase one, which will end on 31 December 2026. However, airlines will have until January 2028 to surrender carbon credits to cover their obligations. This will bring a temporary dip in prices, also coinciding with structural ramp up of supply. By 2030 CORSIA-eligible credit prices will recover losses and rise to $36 in our base scenario, with a price range of $29 to $44.
Fastmarkets brings the future into view through probability‑adjusted capacity modeling and regional policy analysis to shape long‑term forecasts, enabling airlines to shift from reactive decisions to strategic planning. Its 10‑year biofuels and feedstock outlooks are updated with market developments, including China’s potential to exceed 2 million tonnes of SAF capacity which is expected to tighten Asia‑Pacific feedstock flows and the UK not reaching its 2025 SAF mandate, raising questions about Europe’s ability to meet its own rising targets, which reach 10% by 2030.
Fastmarkets also captures evolving US policy dynamics such as the 45Z credit which declines from $1.75/gal to $1 beginning 2026. These may be partially offset by the removal of ILUC penalties for soybean and canola oil feedstocks, all of which materially alter project economics.
According to Fastmarkets’ Renewable Fuels and Feedstocks Outlook, North American SAF production is set to rise steadily through the decade, supported by strong US capacity growth and emerging export opportunities. Canadian SAF mandates begin in 2026, tightening supply within the region, but the US is on pace to add significant new volumes, nearly 150 million gallons in 2026 and another 1.5 billion gallons in 2027.
This growth is more than sufficient to meet US Renewable Fuel Standard (RFS) renewable fuel obligations (RVOs), enabling surplus production to flow into Canada and other regions with SAF requirements. Although the RFS does not include a dedicated SAF mandate, SAF qualifies under the biomass‑based diesel category, allowing US producers to supply markets facing mandate‑driven shortfalls. This dynamic is expected to continue until around 2030, when expanding global eSAF mandates begin to limit the eligibility of HEFA‑based SAF in certain regions, reducing export options and requiring higher North American consumption to absorb growing production.
Fastmarkets delivers an edge competitors cannot replicate by integrating biofuels, feedstocks, SAF base‑cost modeling, carbon credit pricing, and long‑horizon forecasting into one unified framework. This provides airlines with a single, consistent view of the entire SAF ecosystem. This breadth allows carriers to understand how feedstock markets, policy incentives, carbon programs, and SAF production economics interact, supported by analytics that link aviation, agriculture, and environmental systems.
As an accredited authority aligned with IOSCO principles and recognized by global exchanges such as CME and ICE, Fastmarkets provides airlines with transparent, auditable SAF benchmarks grounded in real production economics rather than jet‑fuel proxies or ambiguous spot windows. The result is a level of reliability and decision‑grade assurance supporting a wide-range of procurement, budgeting, and compliance planning, a fully integrated SAF market perspective competitors simply cannot match.
This article includes contributions from carbon analyst Nicola De Sanctis.