Mandates are spreading from Europe to Türkiye, Brazil and Asia. Yet SAF projects still struggle to reach FID. COP31 should focus less on creating demand on paper — and more on making it financeable.
$100bn+ | The World Economic Forum estimates global clean-fuel investment needs to rise above $100 billion per year by 2030. The European Commission separately estimates about €100 billion of investment by 2035 for renewable and low-carbon fuels in aviation and shipping. SAF is one of the hardest markets inside that capital race. |
Everyone wants sustainable aviation fuel. At least on paper.
Governments are mandating SAF, airlines have announced 2030 targets and corporations want the Scope 3 reductions. Meanwhile, producers have announced hundreds of projects globally. Yet, developers still encounter the same question when they sit down with lenders: where is the bankable offtake and why projects are not getting FID?
That is the contradiction at the center of the global SAF market. The industry does not simply have a supply problem. It has a problem converting future demand into commercial commitments strong enough to finance today’s production capacity in a long-term.
The numbers make the paradox hard to ignore. IATA expects global SAF production of only about 2.4 million tonnes in 2026, or 0.8% of aviation fuel use, while adding roughly $4.3 billion to airline fuel costs. At the same time, around 200 projects representing up to 30 million tonnes of 2030 capacity have been announced. IATA estimates only around 60% of that capacity will materialise; as little as 35% is currently operating or under construction. Now we can September 2026 and the pipeline is still not getting there.
Demand exists. Bankable demand is the scarce product.
The language of “demand” hides four very different realities. Regulatory demand means a future compliance obligation exists. Aspirational demand means an airline or corporation has announced a target. Contracted demand means a buyer has signed for volumes. Bankable demand means the contract has enough tenor, credit quality, pricing certainty and risk allocation to support debt.
Only the last category consistently gets steel in the ground. RMI’s 2025 bankability work makes the point directly: SAF projects can struggle to secure low-cost debt even where buyers are willing to commit, because the structure of the commitment matters as much as the stated volume. The World Economic Forum estimates global SAF demand could reach around 17 Mt per year by 2030, but says an additional 5.8 Mt of capacity would have needed to secure FID by 2026 to meet that demand.
This is no longer just an industry argument. The UK Government’s 2026 SAF legislation explicitly acknowledges that its mandate, while a strong demand-side measure, may not by itself provide enough long-term revenue certainty for first-of-a-kind projects. That is why the UK has added a separate revenue-certainty mechanism. In other words: one of the world’s most developed SAF policy regimes has effectively accepted the central point of this article — mandated demand and financeable demand are not the same thing.
The global real mandate map is getting crowded — but the policy designs are not equivalent
The SAF market is often discussed as though Europe and the UK are the whole regulatory story. They are not. By September 2026, binding or formally scheduled requirements extend into Türkiye, Brazil, South Korea and Japan, while Singapore has chosen a mandatory levy and central-procurement model rather than a conventional airline blending mandate. India, Thailand and Hong Kong have announced targets or voluntary pathways that should not be presented as equivalent to binding obligations.
Table 1 SAF global policy and regulatory example
| Jurisdiction | Policy status | Near-term requirement | 2030 direction |
| European Union | Binding supplier mandate | 2% from 2025 | 6% SAF in 2030; 1.2% synthetic SAF |
| United Kingdom | Binding supplier mandate | 2% from 2025 | 10% in 2030; PtL obligation from 2028 |
| Norway | Binding national sales mandate | 2% advanced biofuel in 2026 | National rule; EEA alignment continues |
| Türkiye | Binding emissions-reduction obligation | 2026 minimum: 13 g CO2e/litre, calculated as 0.5% reduction | Annual DGCA target; applies to suppliers and airline operators |
| Brazil | Binding from 2027 | 1% GHG reduction in 2027 | 3% in 2030; 10% from 2037 |
| South Korea | Mandatory from 2027 | ~1% SAF on departing international flights from 2027 | Roadmap to scale after launch |
| Japan | Supply-side regulatory benchmark | — | 10% SAF share of aviation fuel use by 2030 |
| Singapore | Mandatory levy + central procurement | 1% uplift target from 2027 | Goal to raise to 3–5% by 2030 |
| India | Indicative target — not yet a mandate | 1% international flights from 2027 | 5% by 2030 |
| Thailand | Voluntary programme | 0.5–1% on designated international routes from 2026 | Subject to review |
| Hong Kong | Policy target — not a mandate | — | 1–2% SAF consumption ratio by 2030 |
Sources: EU | UK | Norway | Türkiye | Brazil | South Korea | Japan | Singapore | India | Thailand | Hong Kong
The policy distinction matters because different designs allocate the green premium differently. Europe and the UK largely oblige fuel suppliers and allow the cost to flow through the market. Singapore has taken a different route: a mandatory SAF levy funds central procurement, with predictable cashflows intended to support longer-term competitive supply agreements. That is directly relevant to the bankability problem because it aggregates demand and makes the cost envelope visible upfront.
What the market leaders are actually saying
The most revealing comments from executives are not about whether SAF is necessary. There is broad agreement on that. Their disagreement is about price, contracts, risk and who should carry them.
| AIRLINE — Luis Gallego, IAG CEO “We have mandates but we don’t have sustainable aviation fuel.” Airlines argue regulation is running ahead of competitive physical supply. Reuters, Oct. 2025 | AIRLINE — Kenton Jarvis, easyJet CEO “If SAF was the same price as jet fuel, we wouldn’t need mandates.” The issue is not only availability; it is the size and allocation of the premium. Reuters, Oct. 2025 |
| PRODUCER — Shunichi Kito, Idemitsu / Petroleum Association of Japan “Airlines need comparable frameworks on the user side, not only supply-side obligations.“ Japan’s refining sector is effectively asking policy to pull demand through the whole value chain. Reuters, Mar. 2025 | FINANCE — MUFG / SAF financing discussions “Lenders focus on predictable revenues, proven technology and clearly allocated risk.“ The financing constraint is less “is there money?” and more “is the project de-risked enough to lend against?” MUFG, 2026 |
Producers describe the mirror image of the same problem. S&P Global reported in June 2026 that large SAF projects often need 10–15 years of guaranteed demand before capital can be committed, while airlines hesitate to sign at that tenor because future supply and pricing are uncertain. XCF Global’s CFO separately highlighted the absence of established long-term contracting norms and the credit quality of airline counterparties as meaningful investor risks.
| 0.8% | $4.3 billion. IATA’s estimate of the additional airline cost in 2026 for SAF representing only 0.8% of global aviation fuel use. That is why airlines can support SAF strategically and still resist open-ended long-term premium exposure. |
There are already examples of what “bankable demand” looks like
The market also offers a useful counterexample. In February 2026, SkyNRG’s DSL-01 project in the Netherlands reached financial close and moved into construction. Standard Chartered said the financing was underpinned by a long-term KLM offtake covering 75% of production, providing predictable revenue to support bankability. The lesson is not that every project needs the same structure; it is that when revenue, credit and risk allocation are sufficiently clear, capital can move.
Türkiye is not just one more market. It can be a move of whether the deadlock can be broken.
This is where Türkiye becomes strategically interesting for global SAF. The country is simultaneously a major international aviation market, a large refining and fuel-distribution base, an emerging SAF producer, and a bridge between European demand, Middle Eastern aviation hubs and Asian supply chains. More importantly, it now has a domestic regulatory signal: Türkiye’s SHT-SAF framework is mandatory, and for 2026 the Directorate General of Civil Aviation set a minimum emissions-reduction amount of 13 grams per litre, calculated as a 0.5% reduction target. This is an emissions-reduction obligation, not simply a 0.5% blending mandate — an important distinction.
Domestic supply is starting to take shape as well. Tüpraş says it supplies about 74% of Türkiye’s jet-fuel demand, plans to begin SAF production through co-processing at İzmir in 2026, and is developing a new biofuels unit designed to produce 300,000 tonnes per year of SAF, renewable diesel and other by-products. It has also secured 10-year feedstock trade and supply agreements. Tüpraş and Turkish Airlines have publicly announced a Letter of Intent for domestic SAF procurement, while Tüpraş’s 2025 annual reporting also refers to LoIs with Turkish Airlines and Pegasus for SAF from the 2026 co-processing route.
That is progress — but it also illustrates the paradox. A Letter of Intent is an important demand signal, yet public disclosure does not tell us whether the future commercial agreement will have the volume commitment, tenor, price formula, credit support and termination protections that lenders require. This is not a criticism of the companies; it is the exact commercial bridge the entire SAF industry is trying to cross.
Türkiye’s advantage is therefore not simply “good geography.” It has pieces of both sides of the transaction: airlines that will face increasing SAF obligations across their international networks; an incumbent refiner with infrastructure and feedstock strategy; major airports and logistics links; access to European regulated demand; and a COP presidency explicitly focused on implementation. The more interesting question is whether Türkiye can connect those pieces into a financeable market design rather than just a collection of projects.
What COP31 could actually do
COP31 is being positioned by the Türkiye Presidency as an “Implementation COP” focused on translating commitments into tangible and trackable progress. SAF is almost a perfect test case. The technology exists. The policy signals are multiplying. The customers exist. The capital exists. Yet the commercial structures connecting them remain incomplete.
A useful COP31 proposition would therefore be a Türkiye SAF Compact focused on market design rather than another volume target. It brings together government, DGCA, airlines, Tüpraş and other fuel suppliers, airports, corporate SAF buyers, banks, development-finance institutions and certification bodies around four practical questions: how to aggregate demand; how to share the green premium; how to create longer revenue certainty without locking airlines into unlimited price risk; and how to ensure Türkiye moves from near-term HEFA/co-processing toward advanced bio-SAF and eventually e-SAF as technology and power economics mature.
Singapore’s central-procurement model is worth studying because it pools demand and fixes the cost envelope. The UK’s revenue-certainty mechanism is relevant because the government has explicitly recognised that a mandate alone may not finance first-of-a-kind plants. Corporate book-and-claim demand can add higher-credit counterparties. Guarantees, price floors, contracts-for-difference (CfD)-style structures and pooled offtake can each solve different pieces of the risk puzzle. Türkiye does not need to copy one model; it can combine the parts that fit its aviation and energy system.
Who will sign for it?
The SAF market does not suffer from a lack of ambition. It has mandates, airline targets, producers, projects, technologies and investors. What it lacks is enough agreement on who carries the risk between policy ambition and mature-market economics.
Airlines do not want to lock in an unlimited premium for 10–15 years. Producers cannot finance large plants without long-term revenue certainty. Banks will not lend simply because a 2030 mandate exists. Governments do not want permanent subsidies. Corporate buyers can help, but they cannot carry the entire aviation transition. Passengers are unlikely to volunteer to absorb all of the difference.
Somewhere between those actors, the risk has to be divided.
That is why the next phase of SAF will not be determined only by who can produce the cheapest molecule. It will be determined by who can build the most bankable market around it. For Türkiye, hosting COP31 creates an unusual opportunity to show what that looks like in practice: turning regulation into contracts, contracts into investment, and investment into physical fuel.
The world already knows it needs much more SAF. The harder question — and the one investors are actually asking — is much simpler: who will sign for it?
