Liquid fuels will remain central to aviation
Sustainable aviation fuel (SAF) entered the aviation debate as a climate solution. It is increasingly becoming something more consequential: an industrial capability with implications for energy security, supply chain resilience and military readiness. For aerospace and defense leaders, the key question is no longer whether if and what role SAF will play in the future, but whether sufficient production capacity can be built before fuel availability becomes a strategic constraint.
The reason is straightforward. Long-haul aviation remains fundamentally dependent on liquid hydrocarbons. While electric propulsion may find applications in smaller aircraft and hydrogen could eventually support parts of the market, both face significant technical and infrastructure hurdles at scale. For the aircraft that transport passengers, cargo, military personnel and critical equipment across continents, liquid fuels will remain indispensable for decades.
As Valentin Batteiger of Bauhaus Luftfahrt has argued at our recent IMPACT Aviation Stocktake Forum 2026, even optimistic hydrogen scenarios continue to require substantial volumes of drop-in liquid fuels throughout the transition. The challenge facing aviation, therefore, is not simply how to reduce emissions, but how to secure sufficient quantities of sustainable liquid fuel while maintaining affordability, reliability and operational flexibility.
This reality has made SAF the focal point of aviation’s decarbonization efforts. Unlike many alternative propulsion technologies, SAF can be used in today’s aircraft, engines and fueling infrastructure. Airlines do not need to replace fleets, airports do not need to rebuild fuel systems, and operators can integrate SAF into existing logistics networks. The technology challenge, in large part, has already been solved. The task now is deployment at scale.
Demand is growing faster than supply
The market is responding. According to the SkyNRG & ICF SAF Market Outlook 2026[1], global SAF production doubled again in 2025 to approximately two million tonnes. Demand is expected to accelerate sharply over the remainder of the decade, driven by increasingly stringent regulatory requirements and corporate decarbonization commitments. In Europe, ReFuelEU Aviation and the UK’s SAF mandate have transformed SAF from a voluntary environmental initiative into a compliance market supported by long-term demand signals.
Demand, however, is only one side of the equation.
The more pressing challenge is building a fuel supply system capable of supporting sustained growth. Today’s SAF market has largely been built on Hydroprocessed Esters and Fatty Acids (HEFA), a production pathway that converts used cooking oil, animal fats and other lipid feedstocks into aviation fuel. HEFA is an instrumental building block on the road to commercial scale of and deserves much of the credit for the industry’s progress to date.
At the same time, HEFA is unlikely to provide a complete long-term solution. Feedstocks are inherently limited, and competition for those resources is increasing across multiple sectors. Nearly 85% of announced SAF production capacity still relies on HEFA pathways, raising concerns about future supply constraints as demand accelerates. Both Batteiger’s statement and the SkyNRG & ICF outlook point to a growing need for diversification into alcohol-to-jet, Fischer-Tropsch, advanced biofuel and synthetic e-fuel pathways if SAF is to meet long-term aviation demand.
In many respects, the industry’s next challenge is not scaling SAF production alone, but broadening the range of technologies and feedstocks that support it.
Why fuel diversification matters
That challenge has direct implications for resilience.
Recent years – further emphasized by the Iran war in early 2026 – have underscored the vulnerability of global energy markets to geopolitical shocks, supply disruptions and trade tensions. Aviation – in particularly in Europe, Asia and Oceania – remains heavily reliant on fossil fuel imports. Diversifying fuel supply does not eliminate those risks, but it can reduce dependence on a limited set of resources and supply routes.
For governments, domestic SAF production increasingly represents an opportunity to strengthen industrial capacity while reducing exposure to external energy shocks. Countries with access to sustainable feedstocks or renewable power will be able to develop strategic advantages in future aviation fuel markets. As a result, SAF is increasingly being discussed not only in climate ministries but also in departments responsible for industry, energy and national security.
Until recently, calls for military SAF procurement were often framed as a way for governments to support the development of an emerging industry. The objective was to help create the long-term demand signals needed to unlock investment in first-of-a-kind production facilities. Recent geopolitical developments have broadened that perspective. What was once primarily viewed as industrial support is increasingly regarded as an investment in fuel resilience, supply security and long-term operational readiness.
The defense sector has a direct take
The defense community has a particular stake in this discussion.
Fuel availability has always been a readiness issue. Military aviation depends on assured access to liquid fuels for airlift, surveillance, aerial refueling, logistics support and operational deployment. Range, endurance and reliability remain essential requirements, and any future aviation fuel system must meet those standards under demanding operational conditions.
Historically, defense organizations have often played an important role in helping emerging technologies reach scale. SAF presents a similar opportunity. While military demand alone will not determine the market’s trajectory, defense institutions can provide something that many first-of-a-kind projects struggle to secure: credible, long-term demand.
For project developers and financiers, uncertainty remains a major obstacle. Large SAF facilities require substantial upfront investment, yet investors continue to seek stronger certainty around future revenues and market stability. Long-term procurement commitments from highly creditworthy buyers can help reduce those risks, improve project bankability and send a much-needed signal in support of SAF beyond mere policies.
Military operators can also contribute in another important way: demonstrating operational confidence. Successful SAF deployments validate fuel performance under demanding conditions and help build trust across the wider aviation ecosystem. Every operational use case provides additional evidence for airlines, regulators, financiers and policymakers that SAF can support real-world missions at scale.
From demonstration to industrial scale
The broader strategic benefit is diversification. A future fuel ecosystem that combines conventional refining capacity, advanced biofuels and synthetic fuels sourced from a variety of feedstocks is likely to be more robust than one dependent on a narrow set of fossil-fuel supply chains. Greater diversity in production pathways can strengthen resilience against market disruptions, geopolitical tensions and resource constraints.
Achieving that outcome will require collaboration far beyond the fuel sector itself. Airlines and corporate buyers of SAF certificates cannot solve the challenge independently. Nor can fuel producers, governments or investors acting in isolation. Building a mature SAF market requires coordinated action across aircraft manufacturers, engine companies, airports, energy suppliers, financial institutions, defense organizations and policymakers. Success will depend on aligning capital, technology, regulation and demand.
For aerospace and defense leaders, SAF should therefore be viewed through multiple lenses at once. It remains aviation’s most important near-term decarbonization tool. It represents an industrial opportunity capable of creating new value chains and attracting investment. Last but not least, it also contributes to a broader conversation about RESILIENCE, preparedness and long-term fuel security.
An investment in future readiness
The coming years will determine whether SAF develops into a scalable global fuel industry or remains constrained by feedstock limitations and financing bottlenecks. The underlying technologies exist. Demand is steadily strengthening. The remaining task is to mobilize the investment, infrastructure and market confidence required for industrial-scale deployment.
SAF will continue to be discussed through the lens of emissions reduction, and rightly so. Yet the next phase of the story will be shaped just as much by questions of supply, capability and industrial capacity. Nations that succeed in building diversified aviation fuel ecosystems will strengthen both their aerospace sectors and their strategic resilience. For defense organizations, supporting that transition is not simply an environmental choice. It is an investment in future operational readiness.
[1] https://skynrg.com/2026-saf-market-outlook/#download
