EnergyTransportationAerospaceCommoditiesSupply Chain

How Cooking Oil Became Aviation’s New Green Fuel

CNBC International
CNBC International•Mar 27, 2026

Why It Matters

Scaling SAF from waste oil is essential for aviation’s carbon‑reduction goals, but without coordinated policy and supply‑chain investment, higher fuel costs will be passed to airlines and travelers, jeopardizing net‑zero timelines.

Key Takeaways

  • •Used cooking oil fuels sustainable aviation fuel but supply is limited
  • •UK and EU mandates require 2% SAF, rising to 70% by 2050
  • •SAF costs two to five times conventional jet fuel, raising ticket prices
  • •Governments use buyout prices or traveler levies to fund SAF adoption
  • •New ethanol‑to‑jet and Fischer‑Tropsch plants aim to expand feedstock sources

Summary

The video explains how used cooking oil is being transformed into sustainable aviation fuel (SAF) and why the industry sees it as a key decarbonisation tool, even as the raw material’s availability proves a bottleneck.

Around 80% of SAF today is produced via the HEFA process, which hydro‑processes waste fats into jet‑grade fuel. Europe and the UK have mandated a minimum 2% SAF blend for 2025, climbing to 10% (UK) and 6% (EU) by 2030, with the EU targeting 70% by 2050. In the United States, tax credits aim for 3 billion gallons by 2030 and 35 billion gallons by 2050. However, SAF costs two‑to‑four times conventional jet fuel, and some airlines now pay up to five times more, squeezing thin airline margins.

To bridge the cost gap, governments are experimenting with price‑support mechanisms: the UK offers a £4.70‑per‑liter buy‑out, effectively a fossil‑fuel tax, while Singapore will embed a mandatory SAF levy on tickets, ranging from S$1 to S$40 per seat. Meanwhile, new production pathways are emerging—LanzaJet’s ethanol‑to‑jet plant in the U.S. and DG Fuels’ $4 billion Fischer‑Tropsch facility—signaling the first large‑scale plants beyond waste oil.

If policy incentives can de‑risk projects and expand feedstock supplies, SAF could become a mainstream jet fuel component, lowering aviation’s 2% share of global CO₂. Absent such support, prices will stay volatile and the industry may struggle to meet aggressive net‑zero targets, shifting the financial burden onto airlines and ultimately passengers.

Original Description

The main ingredient in sustainable aviation fuel (SAF) is used cooking oil — and the world is running out of it.
As governments push ahead with mandates to drive down carbon emissions, limited supply and higher demand are pushing prices two to five times higher than convention jet fuel.
From Europe's legally binding blending mandates to Singapore's world-first passenger levy, we are seeing a global split in how nations plan to fund – and force – the transition to green flight.
For information on CNBC’s CONVERGE LIVE event which takes place in Singapore 22-23 April 2026, visit: www.cnbc.com/converge-live/
#CNBC #OnTheRoadToConverge
-----
Subscribe: @cnbci
CNBC International Live: @cnbcinternationalive

Comments

Want to join the conversation?

Loading comments...