Market Trends of Europe Renewable Aviation Fuel Industry
This section covers the major market trends shaping the Europe Renewable Aviation Fuel Market according to our research experts:
Commercial Sector to be the Largest Segment
- In the first half of 2022, air passenger transport in the European Union (EU) carried more than 338 million air passengers. Countries such as the United Kingdom, Germany, Spain, France, and Italy, accounted for a major share of air passenger count in 2021.
- Owing to the air passenger traffic growth in 2021, the greenhouse gas emissions from the region's aviation sector are considered one of the fastest-growing sources of emissions that contribute to climate change. As of 2021, Europe is one of the leading regions in biofuel production technologies, with a significant number of production plants under operation. The production capacity of bio-based aviation fuel in the region depends on a small number of plants, accounting for a maximum potential output of approximately 2.3 million metric tons per year.
- The European Commission (EC), in coordination with Airbus, leading European airlines, such as Lufthansa, Air France, and British Airways, and key biofuel fuel producers, such as Neste and Biomass Technology Group, launched an initiative in 2011 called the European Advanced Biofuels Flight Path, to speed up the commercialization of aviation biofuels in Europe.
- As of 2021, the industry mainly focuses on reducing overall fuel usage and improving fuel efficiency. However, further reduction of greenhouse gas emissions, particularly in the face of new regulations, is set to come online in the next few years and is expected to lead the industry in taking the next step, embracing renewable jet fuels.
- To address the increasing concerns regarding rising aviation emissions, IATA has urged all major players in the industry to work on the development of sustainable solutions, which has led to the identification of renewable jet fuel as one of the most promising strategies to reduce greenhouse gas emissions. This has paved the way for companies, such as Nestle, to gain an increasingly substantial role in the aviation sector.
- In January 2022, ExxonMobil and Neste announced a supply agreement for commercial-scale distribution of Neste MY Sustainable Aviation Fuel at the largest airports in France. The Neste MY Sustainable Aviation Fuel is produced from sustainably-sourced, 100% renewable waste and residue raw materials, such as used cooking oil and animal fat waste, and when used at 100% concentration, the Sustainable Aviation Fuel use results in up to 80% lower greenhouse gas emissions as compared to fossil jet fuel use. This step is taken to match the 1% SAF mandate introduced by the French government effective from January 1, 2022
- Therefore, based on the factors mentioned above, the commercial sector is expected to drive the Europe Renewable Aviation Fuel Market during the forecast period.
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Germany to Witness Significant Demand
- Founded in 2011, the Aviation Initiative for Renewable Energy in Germany (AIREG) aims to promote the country's research, production, and usage of sustainable aviation fuels. Members of AIREG include universities, research institutions, plant manufacturers and operators, petroleum companies, engine and aircraft manufacturers, airports, and airlines.
- The usage of sustainable aviation fuels in Germany is expected to be huge, and hence, the AIREG has set targets of reaching a 10% blend for SAF implementation by 2025.
- In December 2021, British Airways announced that it had signed a multi-year agreement with the Phillips 66 Company to supply sustainable aviation fuel to the airlines by 2022. The initiative is in line with the aircraft operator's goal of achieving zero carbon emissions by 2022.
- As of 2021, Europe is one of the leading regions in terms of biofuel production technologies, with a significant number of production plants under operation. The production capacity of bio-based aviation fuel in the region depends on a small number of plants, accounting for a maximum potential output of approximately 2.3 million metric tons per year.
- In June 2022, Germany carried 16265 thousand of passengers. There is an increase of 2.14% as compared to June 2021 carried 5165 thousand passengers.
- Therefore, based on the above-mentioned factors, Germany is expected to witness significant demand in the renewable aviation fuel market during the forecast period.
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