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Global aviation fuel market was valued at US$178.560 billion in 2019 and is expected to grow at a CAGR of 6.00% to reach a total market size of US$253.261 billion in 2025. Booming travel and tourism industry is one of the major drivers of global aviation fuel market. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals grew 5 per cent in 2018, reaching the figure to 1.4 billion which was reached two years ahead of the UNWTO forecast.
This high growth in the number of international tourists is significantly driven by a relatively strong global economy with expanding middle class population base in emerging economies, new business models, technological advances, and affordable travel costs and visa facilitation. In conjunction to this, export earnings generated by tourism also increased to US$1.7 trillion in 2018, thus making the sector a true global force for economic growth and development by way of creating more and more employment. With growing number of air travel passengers worldwide, the demand for commercial aircrafts is also rising among different airlines.
Rising focus of governments on military sector is another factor that is spurring the growth of aviation fuel market. These continuous increase in military and defense budget is majorly attributed to political tensions among different nations and rising cases of terrorist attacks worldwide. According to the latest report of Stockholm International Peace Research Institute (SIPRI), global military expenditure was totalled to $1,917 billion in 2019 which is the highest level since 1988. Also, the global military burden (global military expenditure as a share of GDP) increased from $243 in 2018 to $249 in 2019.
However, as a consequence of global lockdown measures due to Covid-19 in early 2020, mobility – 57% of global oil demand – declined at an unprecedented scale. As lockdowns spread, global aviation activity had declined to a staggering 60% by the end of March 2020. Aviation fuel is a type of kerosene-based fuel which is used to operate an aircraft. Aviation fuels reduce the risk of icing or explosion due to high temperature and is primarily used by military aircrafts as well as commercial airlines in order to maximize fuel efficiency while lowering down the operational cost.
Aviation emissions rose rapidly, at an average annual rate of 2.0% during 2000-19, with 5% average yearly rises in total commercial passenger flight activity since 2000. As most (>99.5%) aviation relies on jet kerosene, and as most jet kerosene (>85%) is used by commercial passenger aviation, the gap between these two metrics is largely explained by operational and technical efficiency measures adopted by commercial airlines, including new aircraft purchases.
Due to projected growth of the aviation industry, there are many important drivers to the development of alternative jet fuels, including domestic energy security, diversity of fuel supplies, less fuel price volatility, and lower longterm fuel cost. Ancillary benefits of involve growth of the bioeconomy with associated job creation and employment opportunities as well as environmental and sustainability benefits. The aviation industry faces significant challenges in improving environmental sustainability and reducing its carbon footprint.
Unlike other liquid fuels (e.g., diesel or gasoline) with developed alternatives (e.g., battery or electrical power), alternatives to currently
used aviation jet fuels are at the early stages of development. In the near term, the most promising option is bioderived aviation fuel, which has driven interest from industry (ranging from fuel producers to downstream consumers, including airlines and engine manufacturers) as well as governments and international agencies to initiate the development and production of aviation jet fuel.
As such, biofuels that can significantly reduce carbon emissions and sustainable aviation fuel (SAF) which are still under research and development offers lucrative opportunities for the growth of aviation fuel industry in the near future. Recently in July 2020, the operator of the Gazprom Neft aviation refuelling business, Gazpromneft-Aero, has launched an integrated laboratory information system (LIS) for analysing both qualitative and quantitative characteristics of aviation fuel.
United Airlines was the first U.S. airline to begin the use of sustainable aviation fuel (SAF) for regularly scheduled flights with the departure of United Flight 708 from Los Angeles International Airport. In March 2019, airplane manufacturer Boeing announced that the company will be offering airlines and operators the option of powering their new commercial jet with biofuel for return flights.
Biofuels are key to mitigating the growth constraints of the aviation industry. Biobased jet fuels also present a tremendous opportunity to transition away from fossil fuels towards domestically produced aviation biofuel that would further reduce U.S. reliance on foreign oil and create jobs, particularly in rural areas, and to advance the mission of BETO for the development of sustainable alternative fuels.
BETO is one of ten technology development offices within DOE’s EERE. BETO supports EERE’s efforts to expand the adoption of sustainable, domestically produced transportation and aviation alternatives, and to stimulate the growth of a thriving, domestic clean energy manufacturing industry. BETO’s mission is to develop and demonstrate transformative and revolutionary sustainable bioenergy technologies for a prosperous nation. This mission is accomplished by transforming renewable, non-food biomass resources into commercially viable, high-performance biofuels, bioproducts, and biopower. Within BETO, the DMT program supports the targeted RD&D of technologies that will enable operational integrated biorefineries (IBRs) supported through public and private partnerships
Scientists looking into converting CO2 into sustainable, synthetic hydrocarbons fuels
A new breakthrough could help reduced the carbon footprint of air travel, with the aim to bring emissions by jets to net zero. A team of researchers from Oxford University has successfully managed to turn carbon dioxide (CO2) into jet fuel, though as of now the experiment was performed at a very small scale. As concerns about climate change keep mounting by the day, scientists have been looking into converting CO2 into sustainable, synthetic hydrocarbons fuels for transportation purposes for a few years now. As of now, this reverse engineering has only been experimented in the lab but could be a game-changer when introduced on a larger scale – making air travel carbon neutral.
The team of researchers have discovered a way to use low-cost iron catalysts to convert CO2 in the atmosphere (or directly from emissions of factories) into synthetic jet fuel. The scientists first prepare the Fe-Mn-K (iron-manganese-potassium) catalyst by the organic combustion method (OCM). This catalyst then exhibits a CO2 conversion through hydrogenation to hydrocarbons in the aviation jet fuel range of 38.2 percent and a low carbon monoxide output of 5.6 percent. The conversion reaction also produces other by-products which are important raw materials for the petrochemical industry and are presently also only obtained from fossil crude oil.
In this method, the carbon dioxide extracted from air is employed for conversion and later re-emitted from jet fuels when combusted in flight. Resultantly, the overall effect of this process is a carbon-neutral fuel.
As of now, this process remains inside the walls of the lab. There are challenges that need to be overcome before this could be made a practically viable method of aviation fuel production. One of the hurdles involve carbon capturing – the process of capturing carbon from the atmosphere. The activation of CO2 is also a challenge. Another complication is that hydrocarbon synthesis via the hydrogenation of CO2 usually favours the formation of short-chain, rather than the desirable long-chain that is required for the synthesis of aviation fuel.
This new process represents a significant social advance that highlights CO2 recycling and resource conservation as an important, pivotal aspect of greenhouse gas management and sustainable development. This catalytic process is expected to be the route to achieving net-zero carbon emissions from the aviation industry in the near future – that is until we as a society are fully equipped to run on eco-friendly electric airplanes.
Aviation Fuel market
The recent pandemic outbreak caused by COVID-19 has negatively impacted almost each and every industry including automotive and construction. However, the global travel and tourism industry has been hit the hardest by this pandemic. The novel coronavirus disease, which broke out in Wuhan, China, in the beginning of 2020, and then continued to spread like a wild fire throughout the globe, pushed governments to impose nationwide lockdowns and close national borders in order to contain the spread of the pandemic. The duration of the pandemic is still uncertain, and since inability of governments to contain the spread can increase the burden of this disease significantly, air travel remains restricted. A steep decline in the number of commercial flights across the globe has been driving down the demand for aviation fuel.
This rise in military expenditure also includes heavy investments in new military aircrafts by different nations. Recently in July 2020, the Government of India has approved Rs. 38,000 crore deal with Russia to purchase MiG-29 fighter jets while upgrading over 50 MiG-29s amid political tensions with China at the Line of Actual Control (LAC). The Pentagon asked for $56.9 billion in the fiscal budget 2021 to be invested in the military’s air domain out of which the Defense Department planned to buy 79 F-35 Joint Strike Fighters of worth US$11.4 billion. In November 2019, the United Arab Emirates (UAE) Ministry of Defense signed a $618 million contract to purchase 24 of B-250 light-attack aircraft from domestic manufacturer Calidus.
As the global aircraft industry is expanding at a decent pace, competition among aircraft fuel production in all sectors is also getting intense. Stringent regulations regarding sustainability of aviation fuel is further boosting the competition among aviation fuel manufacturers which is also positively impacting the overall growth of the global aviation fuel market. As such, biofuels that can significantly reduce carbon emissions and sustainable aviation fuel (SAF) which are still under research and development offers lucrative opportunities for the growth of aviation fuel industry in the near future. Recently in July 2020, the operator of the Gazprom Neft aviation refuelling business, Gazpromneft-Aero, has launched an integrated laboratory information system (LIS) for analysing both qualitative and quantitative characteristics of aviation fuel.
Commercial aviation industry is also moving towards sustainable environmental practices and gradually increasing the use of sustainable aviation biofuel (SAF). United Airlines was the first U.S. airline to begin the use of sustainable aviation fuel (SAF) for regularly scheduled flights with the departure of United Flight 708 from Los Angeles International Airport. In March 2019, airplane manufacturer Boeing announced that the company will be offering airlines and operators the option of powering their new commercial jet with biofuel for return flights.
The energy intensity of commercial passenger aviation has decreased 2.8% per year on average, but improvements have slackened over time, and they must be maintained to limit fuel combustion to volumes at which SAFs – low-carbon alternatives to fossil-based jet kerosene – can power commercial aircraft. Near to mid-term priorities include implementing fiscal and regulatory measures that promote exploitation of operational and technical efficiency and managing the investment risks. These risks exist for developing and deploying clean sheet airframes, new engines and propulsion systems, and for production low-lifecycle GHG-emissions SAF.
Although some airline carriers continue to operate while ensuring compliance to strict guidelines from governments, it is not enough to recoup the slump. Reluctance of people towards air travel, on account of high degree of fear of contracting the disease, is also limiting the number of flights per month. This trend is expected to continue till the time the world has at least one reliable vaccine or cure for the virus.
Prominent key market players in the global Aviation fuel market include Shell, Neste, Total, BP, Chevron Corporation, Exxon Mobil Corporation, Gazprom Neft PJSC, Mabanaft GmbH & Co. KG, Lukoil, Uniper SE, VARO, and Global Partners LP. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the global Aviation fuel market have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.
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