Sustainable Aviation Fuel to Cost over Twice Jet Fuel

Key Takeaways

• SAF priced $1.62/L in 2025, $1.81/L by 2040
• Jet A‑1 forecast $0.56/L in 2025, $0.69/L in 2040
• Price gap remains around $1/L throughout 2025‑2040
• Higher SAF cost challenges large‑scale military adoption

Pulse Analysis

Sustainable aviation fuel promises substantial lifecycle emissions cuts, yet the Ministry of Defence’s latest modelling shows it remains financially out of reach for most defence operations. By 2025, SAF is projected at $1.62 per litre—over twice the cost of traditional Jet A‑1—creating a $1‑plus per litre premium that persists through 2040. This gap reflects the higher production expenses of bio‑derived or synthetic kerosene, limited feedstock availability, and the nascent state of commercial SAF supply chains. For the RAF and other UK services, the numbers translate into higher sortie costs and tighter budget constraints, especially as the armed forces aim to decarbonise their fleets.

The fiscal implications extend beyond raw fuel prices. A consistent $1 per litre premium could force the MOD to allocate additional funding for SAF, potentially diverting resources from other capability programmes. Decision‑makers may need to weigh the environmental benefits against operational costs, considering options such as blended fuels, targeted subsidies, or phased adoption on less critical platforms. Comparatively, commercial airlines are already negotiating bulk SAF contracts to mitigate price differentials, but the defence sector’s unique operational tempo and security requirements limit its bargaining power, making cost‑effective procurement a strategic challenge.

Looking ahead, technology advances and scale‑up could narrow the price gap. Emerging pathways—like power‑to‑liquid synthesis using renewable electricity—promise lower production costs as renewable energy becomes cheaper. Government incentives, carbon pricing, and international standards may also accelerate market development. However, the MOD’s forecasts caution that without decisive policy support, SAF will remain a premium commodity, constraining the UK’s ability to meet its net‑zero aviation goals while maintaining combat readiness. Stakeholders must therefore balance environmental ambition with realistic budgeting to chart a viable path forward.