Air travel is back in business and so is global demand for aviation fuel: Global air travel is bouncing back to pre-pandemic levels, pushing up demand for jet fuel. Consumption of jet fuel and kerosene hit 8 mn barrels per day (bbl / d) last summer, the highest since late 2019, according to a report from S&P Global. Annual demand was projected to climb 550k bbl / d y-o-y in 2024, and a further 300k bbl / d y-o-y in 2025, driven by China and Western Europe.

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And with a growing demand for aviation fuel, comes a growing demand for sustainable aviation fuel: The supply of sustainable aviation fuel — commonly referred to as SAF — is set to expand, with 2 bn gallons expected to hit the market by 2028, bringing the industry closer to its 3 bn-gallon target for 2030, according to the SAF Grand Challenge report (pdf). Despite a threefold increase in production last year, SAF still accounts for less than 1% of global jet fuel demand, International Air Transport Association’s (IATA) Gulf and Near East manager Khaled Al Eisawi said at an aviation conference in Dubai in November.

But first, what is SAF exactly? SAF is a biofuel used to power aircraft that is made from non-petroleum feedstock such as waste cooking oil, animal fat, and non-food crops. It can reduce carbon emissions by up to 80% compared to traditional jet fuel, according to the IATA estimates.

The EU’s regulatory push could further boost SAF demand from the bloc — with Egypt in a prime position to take advantage: The EU’s ReFuelEU mandates as of this year require aviation fuel suppliers to include a 2% SAF blend in the total aviation fuel pool at EU airports. This regulatory push is expected to boost European SAF consumption by 216% y-o-y, reaching 1.9 mn tons in 2025, according to S&P Global data. Germany, France, and Spain are expected to account for nearly 40% of this demand.

Europe’s clean jet fuel rollout is set to face turbulence: With hefty fines looming for fuel suppliers that miss the EU’s SAF blending targets, major players are expected to front-load blending in early 2025 — pushing up spot SAF prices. But Europe’s SAF supply chain isn’t ready to meet demand, according to the S&P data. Despite plans to produce 1.5 mn mt of SAF next year, investment is lagging as Shell, Chevron, and BP delay projects over high CAPEX costs and policy uncertainty.

Against this backdrop, Egypt’s Oil Ministry launched the Sustainable Aviation Fuel Production Company in November of last year, committing USD 530 mn to develop SAF production facilities and integrate them with other petroleum firms. The project targets 120k tons of SAF output annually, aiming to cut 400k tons of carbon emissions per year once production begins in the coming years.

This isn’t new: The Oil Ministry has been laying the groundwork for Egypt’s first SAF production, with state-owned firm Egyptian Petrochemicals Holding Company (ECHEM) set to launch operations in 2025, pending the completion of feasibility studies, according to a government source who spoke to us previously.

The move aligns with US multinational conglomerate Honeywell wrapping up its SAF feasibility study with the European Bank for Reconstruction and Development (EBRD). The study is expected to inform investment decisions and production timelines as Egypt seeks to position itself as a regional SAF supplier.

Egypt is moving to streamline SAF feedstock procurement, with the Environment Ministry planning a platform to source waste cooking oil from the private sector, according to a Waste Management Regulatory Authority official. But with much of the supply chain dominated by informal collectors and refiners, the government will need to accelerate licensing efforts to bring them into the formal economy and ensure a stable, scalable supply for SAF production.

While a regulatory framework for SAF production is in the works, industry insiders warn that clear pricing incentives and investment guarantees will be critical to positioning Egypt as a competitive supplier. The country’s oil refining and derivatives market has increasingly been attracting investments, but SAF projects have yet to see the same level of capital inflows, leaving questions over whether Egypt can attract the funding needed to scale up production.

Beyond SAF, Egypt explores wider biofuel production: The Egyptian government is also assessing alternative biofuel projects, with research underway into jatropha, rice straw, water hyacinths, and giant reed as feedstocks. Some of the output could be exported to Europe, given the bloc’s increasing reliance on renewable fuels. Italian energy major Eni is working with Egyptian authorities on a biogas project with a capacity of 4.7 cubic meters per day, while Norwegian biogas firm Antec has expressed interest in entering the Egyptian market.

THE BIGGER PICTURE IN THE REGION-

Emirates Airlines is investing over USD 200 mn in clean jet fuel, committing to SAF-powered flights from Singapore, Amsterdam, and London as part of its push toward net-zero emissions by 2050. However, the airline’s Chief Commercial Officer Adnan Kazim, speaking at the opening ceremony of Emirates World’s store in Egypt, emphasized the limited availability and high cost of SAF, calling for greater government support to scale production.

The UAE is also looking to turn its waste into jet fuel, with the Dubai Municipality singing an agreement back in February of last year to turn waste into jet fuel, partnering with Belgium’s Besix, Japan’s Marubeni Middle East and Africa Power, and UAE-based Enoc Marketing to convert municipal waste into sustainable aviation fuel. The agreement will see the municipality supply solid and organic waste, along with green hydrogen from sewage treatment, for fuel production. The project is still under study but is slated for implementation by July 2025. The UAE is also looking to scale up domestic production, targeting SAF to account for 1% of national airline fuel use by 2031.

Saudi Arabia is also developing its own SAF infrastructure, with Norwegian SAF producer Nordic Electrofuel securing Saudi government approvals in December to develop an e-SAF plant in Jubail, with land and solar assets allocated for the project. The plant — set to produce 350 mn liters of e-SAF annually — could launch by 2029 if fast-tracked, using solar power from existing regional assets and in-house green hydrogen production. Saudi Arabia is ramping up its e-fuel ambitions, with Aramco, TotalEnergies, and the Saudi Investment Recycling Company evaluating a SAF plant in the Eastern Province, while Aramco plans to bring two SAF demonstration projects online in Neom by 2025.

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