Asia's SAF Industry Faces Triple Challenges

Policy gaps, rising feedstock costs, and inadequate infrastructure

The Asian aviation industry is intensifying efforts to scale up sustainable aviation fuel (SAF) production capacity. However, during the "Asia SAF Innovation" panel at the 2025 Asia Pacific Petroleum Conference (APPEC) in Singapore on September 10, speakers warned that fragmented policy support, infrastructure deficits, and rising feedstock costs could constrain SAF industry growth in the coming years.

Gabriel Ho, founder and Chief Sustainability Officer of the Asian Sustainable Fuels Association, stated at the conference that Asian countries need to develop customized roadmaps with regional coordination to position Asia as a major global SAF hub. He noted: "Asia has enormous potential, but policies must shift from 'reactive' to 'proactive.' If we can build large-scale biofuel industrial clusters, technology, capital, and talent will naturally converge. Only then can Asia become a globally competitive SAF exporting region."

Currently, Singapore is seen as a policy benchmark for SAF in Asia, where its passenger fuel surcharge mechanism provides predictable demand signals for SAF producers. India, Malaysia, Indonesia, and South Korea are expected to introduce mandatory SAF blending quotas starting in 2027, which would offer clear market demand expectations and attract new project investments. Natasha Yeung, Cathay Pacific’s SAF Supply Assurance Manager, cautioned that most Asian markets have yet to set SAF blending targets beyond 2030. Europe has established a clear pathway for gradually increasing SAF blending ratios by 2040; similarly long-term and transparent planning is needed in Asia to attract investment and reduce technological development risks.

On feedstocks and logistics, supply chain traceability and infrastructure gaps have emerged as major barriers to SAF development. Panelists noted that Asia's abundant agricultural waste and underutilized plantation resources could support large-scale SAF production, but challenges remain in feedstock supply chain traceability and smallholder farmer participation. Natasha Yeung explained: "Certification systems and industry education are critical—only then can feedstocks meet verification standards under international frameworks like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), enabling commercial value creation."

Additionally, regional logistics systems face significant bottlenecks. Natasha Yeung pointed out: "Asia lacks the well-developed pipeline, barge, and rail transport networks seen in Europe and North America. Without increased investment and strategic placement of production facilities closer to feedstock sources and demand centers, rising logistics costs as production scales will undermine SAF's market competitiveness."

In line with global trends, Hydroprocessed Esters and Fatty Acids (HEFA) remains the dominant production pathway for SAF in Asia, but Alcohol-to-Jet (ATJ) and e-fuels are rapidly emerging. In the coming years, China, Malaysia, and Thailand plan to build new SAF production facilities, with Thailand potentially leveraging its surplus ethanol capacity to develop ATJ technology. Japan aims to advance multiple SAF pilot projects between 2027 and 2029.

Gabriel Ho noted: "HEFA is mature technology, but the next wave of industry transformation will focus on integrating biofuels with renewable energy—producing syngas from biomass or captured CO?, then combining it with green hydrogen to make SAF. This may be Asia’s long-term direction." Heavy reliance on HEFA makes the industry highly sensitive to limited feedstock supplies, prompting many countries to explore alternative technologies. Yet cost remains the key barrier: HEFA-based SAF is already significantly more expensive than conventional jet fuel, and SAF produced via other technologies is even costlier. S&P Global Commodity Insights data from September 10 showed an Asia SAF-conventional jet fuel price differential of $1,300.90 per ton, while eSAF (electronic SAF) costs could exceed $8,000 per ton.

Speakers unanimously agreed that Asia must accelerate improvements in policy, infrastructure, and financing systems to meet growing SAF demand. Gabriel Ho emphasized: "This decade is crucial. Without clear incentive policies and mandatory blending frameworks, Asia risks missing the opportunity to lead the global SAF market."