Sustainable Aviation Fuel Investment
Powering Tomorrow's Flights, Fueling Today's Investment Opportunity
By GrowEasy | Dubai, UAE | May 9, 2025
GrowEasy: Strategic Insights for Superior Returns
Sustainable Aviation Fuel (SAF), derived from renewable feedstocks like biomass, waste oils, and green hydrogen, is critical to decarbonizing global aviation, a sector aiming for net-zero emissions by 2050. With the SAF market projected to grow from $1.1 billion in 2024 to $16.8 billion by 2030 (a 58% CAGR), this presents unique, high-impact opportunities for Sovereign Wealth Funds, Private Equity firms, and High-Net-Worth Individuals. The Middle East, Africa, and the Former Soviet Union (FSU) uniquely combine abundant feedstocks, strategic infrastructure, and emerging policy momentum. However, feedstock scarcity, high production costs, and regulatory complexities demand strategic precision. GrowEasy presents key 2025 insights to guide investment strategies in this high-growth sector.
2025 Insights for SAF Investments
1. Market Trends: SAF as an Aviation Decarbonization Leader
In 2025, SAF adoption will accelerate, driven by global mandates like the EU’s ReFuelEU Aviation initiative and ICAO’s CORSIA scheme, requiring airlines to blend SAF at increasing rates. Hydro-processed esters and fatty acids (HEFA) dominate production, but emerging pathways like alcohol-to-jet (AtJ) and power-to-liquid (PtL) using green hydrogen are gaining traction. High production costs—SAF is 2–5 times pricier than conventional jet fuel—and limited feedstock availability remain hurdles. PE firms should target projects with diversified feedstocks and offtake agreements with airlines to ensure revenue stability.
2. Regional Opportunities
Middle East: The region’s oil refining expertise and access to waste oils position it as a SAF hub. The UAE’s ADNOC is scaling HEFA-based SAF production, targeting 180,000 tons annually by 2030, while Saudi Arabia’s Aramco explores PtL with green hydrogen from NEOM. Proximity to aviation hubs like Dubai and Doha enhances export potential. However, competition for feedstocks and water-intensive PtL processes require innovation. PE firms can invest in integrated biorefineries or hydrogen-linked projects, but must navigate high valuations and ESG scrutiny over fossil fuel ties.
Africa: Africa’s abundant biomass, including agricultural residues and municipal waste, offers SAF feedstock potential. Kenya’s SAF pilot projects, supported by USAID, and South Africa’s Sasol-led ATJ initiatives are gaining momentum. The African Union’s 2023 SAF roadmap targets 300,000 tons by 2030. Yet, underdeveloped logistics and land-use conflicts pose risks. PE strategies should focus on small-scale, community-integrated projects and public-private partnerships to secure feedstocks and de-risk investments.
Former Soviet Union: The region’s agricultural surplus (e.g., corn, wheat residues) and emerging green hydrogen projects make it a SAF contender. Kazakhstan’s bioethanol-based ATJ pilots and Ukraine’s biomass-to-SAF potential are notable, though geopolitical instability and sanctions (e.g., on Russia) limit scalability. Weak carbon markets further constrain growth. PE firms should target niche, export-oriented projects with robust local partnerships to mitigate political and regulatory risks.
3. PE-Specific Strategies
Due Diligence Rigor: SAF projects require thorough feedstock and technology assessments. Overestimating biomass availability or underestimating conversion costs can erode returns. Engage experts to validate supply chains and regulatory compliance.
ESG Alignment: Investors face scrutiny over land-use impacts and feedstock sustainability. Prioritizing waste-based or non-food feedstocks and adhering to CORSIA’s sustainability criteria can enhance LP appeal and access to green financing.
Value Creation: Operational expertise is key to cost reduction. PE firms should implement strategies like co-locating SAF plants with existing refineries or optimizing logistics to secure feedstocks, improving margins.
Exit Timing: SAF exits depend on policy stability and airline demand. In 2025, monitor Middle Eastern aviation hub growth and African SAF mandates to time IPOs or trade sales during favorable market conditions.
Conclusion: Strategic Positioning for 2025
For investors targeting Sustainable Aviation Fuel in the Middle East, Africa, and the Former Soviet Union (FSU), 2025 is a critical year to shape aviation’s decarbonization. The Middle East offers refining scale, Africa provides feedstock abundance, and the FSU presents high-risk, high-reward prospects. Success hinges on rigorous due diligence, robust ESG alignment, and continuous operational innovation. GrowEasy recommends prioritizing projects with secured offtake, leveraging regional policies, and building flexible portfolios to navigate cost and supply challenges. By strategically aligning with global aviation mandates and deploying proven operational expertise across screening, due diligence, portfolio management, and exit strategies, investors can drive transformative returns in the rapidly evolving SAF sector.
Shape your portfolio with us
GrowEasy: Proven Industry Expertise, Superior Returns
Connect with the Experts, Unlock Investment Success
Visit www.groweasy.ae or email us at info@groweasy.ae to understand more
