Sensitive crude oil prices and stringent environmental regulations are expected to drive the global renewable aviation fuel market growth over the next seven years. Volatile fuel prices have been suppressing aviation market which in turn affected the conventional aviation fuel demand. Variation in fuel prices directly affected profit margin for aviation industry players. This led many companies to shift towards developing cheaper and renewable fuel. Aviation industry contributes to a significant extent in carbon dioxide emission. The Federal Aviation Administration of U.S. has forced aviation industry participants to invest in development of renewable source which is expected to assist the market growth over the forecast period. Solazyme and SG Biofuels have developed bio-based aviation fuel which has been tested and certified by ASTM. This development led them to cut down the fuel prices and compete with the conventional aviation fuels. Many aviation industry participants have committed to invest in renewable aviation fuel commercial production. Solazyme developed renewable fuel synthesized from genetically modified algae. New Zealand based company Lanzatech has also developed and planned to establish production facilities in several regions globally. The U.S. defense has shown great interest in renewable aviation fuel development and invested in testing for jet engines. High conventional aviation fuel cost has enforced defense sector to shift towards renewable fuel usage over the recent past. Established synthetic aviation fuel market is anticipated to hinder the renewable aviation fuel market over the next seven years.
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On the basis of application, renewable aviation fuel market has been segmented into commercial and defense. Commercial application segment is expected to be the largest market over the forecast period owing to sensitive conventional aviation fuel prices. Favorable regulations related to environmental impact targeted aviation industry. USEPA guide lined commercial aviation industry participants to develop renewable fuel to reduce carbon dioxide emission. The abovementioned factors are expected to positively affect the market. Defense is also anticipated to witness a positive impact on renewable aviation fuel market growth over the next seven years. Defense consumes a large amount of aviation fuel. High conventional fuel cost led defense to face huge expenses which forced to invest in developing renewable fuel.
Renewable aviation fuel market can be segmented on the basis of process applied into hydroprocessed fatty acids and esters and Fischer-Tropsch (FT). The U.S. military and commercial planes use a blend of FT and conventional fuel at significant extent. FT fuels are produced in several varieties with different feedstock compositions such as biomass to liquid fuels, coal to liquid fuels, coal and biomass to liquid and gas to liquid fuels. FT blended fuel was the leading market in 2013 owing to growing demand for defense planes. Hydrotreated jet fuel is also expected to witness significant growth over the forecast period. ASTM has tested blends of hydrotreated jet fuel with jet A in commercial flights and testing with military planes is in process. This is anticipated to spur the market growth over the next seven years.
Europe is expected to be the largest renewable aviation fuel market over the foreseeable future on account of huge investment in development and favorable environment regulations. Various European airline companies have tested the fuel in commercial flights which is anticipated to bolster the market growth in the region. Asia Pacific is expected to be the highest potential market region due to increasing commercial airline traffic particularly in emerging economies. Major market players include Amyris Inc., Lanzatech, SG Biofuel Inc., Total S.A. and General Biomass Company.