Sustainable aviation fuel production has grown faster than almost any forecast made five years ago predicted. It is also going to miss the blending mandates scheduled for the end of the decade, and the gap is large enough that the interesting question is no longer whether it will be missed but what happens when it is.
The constraint is feedstock
Refining capacity is expensive but buildable. Feedstock is the problem. The dominant production pathway relies on waste fats, oils and greases, and the global supply of those is finite, already contested by road transport, and geographically concentrated.
Alternative pathways exist. Alcohol-to-jet is technically mature and feedstock-flexible. Power-to-liquid, which synthesises fuel from captured carbon and hydrogen, has effectively unlimited feedstock and an electricity requirement that would be significant even against a fully decarbonised grid.
Both are more expensive per tonne than the incumbent pathway, and both need offtake agreements at scale before anybody builds a plant.
The offtake problem
This is the loop the industry has not escaped. Producers will not commit capital without long-term purchase agreements. Airlines will not sign long-term agreements at prices well above conventional fuel unless the mandate makes it unavoidable or a competitor's costs rise equally.
Where mandates are firm and enforcement is credible, offtake agreements have been signed. Where mandates are aspirational, they have not. That correlation is close to perfect and tells regulators everything they need to know about which lever works.
What a miss looks like
Missed mandates rarely result in grounded aircraft. They result in buy-out mechanisms: airlines pay a penalty per unit of shortfall, the penalty is priced into fares, and the regulator collects revenue that may or may not be reinvested in production.
The design of that buy-out price is therefore the most consequential number in the whole policy. Set it too low and it becomes the market price of compliance, capping fuel prices and killing investment. Set it high and it functions as intended, at a visible cost to passengers.
Several jurisdictions have not yet published theirs. Producers have noticed.
