(U.S.) U.S. sustainable aviation fuel is growing fast in 2025, but it’s doing so under new pressure from Washington. Industry data show SAF production capacity has jumped to about 30,000 barrels per day, up from roughly 2,000 b/d at the start of 2024, even as President Trump’s early‑2025 budget cuts trimmed federal renewable energy programs tied to research and infrastructure grants. State incentives and international rules are now carrying more of the load, keeping airlines and fuel makers moving forward while policy at the federal level remains unsettled.
Policy shifts reshape the 2025 SAF landscape
Federal support is mixed. The Inflation Reduction Act’s Section 45Z clean fuel production credit still applies, but its three‑year window has spooked investors who need long horizons for big plants. The credit is being reviewed for possible extension or changes, but no final direction is set.
At the same time, agencies are signaling different priorities. The Environmental Protection Agency is still administering the Renewable Fuel Standard, with final rules expected by late 2025, yet recent proposals have leaned toward conventional biofuels over newer technologies. Official RFS details are available from the EPA: https://www.epa.gov/renewable-fuel-standard-program
The White House posture has shifted as well. The current administration has cut discretionary grants and research dollars for advanced renewables, including some SAF projects, reflecting a broader tilt toward fossil fuel development. Still, officials have said they support crop‑based biofuels, and some tax credits and loan guarantees that help those pathways remain in place. That split approach—limits on federal grants alongside continued incentives for bio‑based supply—has become a key theme of 2025.
According to analysis by VisaVerge.com, state measures and international rules are now doing more of the heavy lifting as federal signals change. Producers describe higher compliance demand from airlines and airports that need reliable volumes to meet state and overseas rules.
State programs and global mandates sustain demand
California’s Low Carbon Fuel Standard (LCFS) continues to generate strong credits for SAF, helping offset federal pullbacks. Other states are weighing similar programs. These policies directly reward lower‑carbon fuel used at in‑state airports and have become an important part of project financing stacks.
Abroad, mandates are rising. The EU and UK began 2% SAF blending requirements in 2025, with scheduled increases that march toward 70% by 2050. For U.S. carriers flying transatlantic routes, that means:
- Finding more supply
- Signing longer offtake deals
- Proving lifecycle emissions performance that meets European rules
Global aviation bodies—including ICAO and IATA—continue to push SAF as core to hitting net‑zero aviation goals by 2050. This external pressure matters: even with federal uncertainty, airlines serving Europe must show compliance and are turning to U.S. producers that can certify to ASTM D7566 and deliver consistent quality.
Industry financing follows these mandates. In early 2025, the U.S. government approved a loan guarantee to help Montana Renewables expand to 315 million gallons per year—roughly half of North America’s current SAF capacity. The move underscores how large, bankable plants with secured feedstocks and buyers still find backing, especially when their output helps airlines meet state and international rules.
Market performance in mid‑2025 has been strong. Examples include:
- Neste recorded nearly 80% quarter‑over‑quarter growth in SAF sales.
- Valero posted record SAF volumes.
These results mirror broader momentum seen in North America and Europe through mid‑2025.
Industry capacity and pressure points
Several numbers capture the sector’s split screen—rapid growth and real constraints:
| Metric | 2025 figure |
|---|---|
| U.S. SAF production capacity | ~30,000 b/d (mid‑2025) |
| U.S. capacity (early 2024) | ~2,000 b/d |
| Global SAF output | ~2.2 billion liters (2025) |
| Share of U.S. jet fuel | Under 2%; total U.S. jet fuel ~1.7 million b/d |
| Global SAF (metric tons) | ~2 million metric tons (~0.7% of global jet fuel) |
| Montana Renewables expansion | 315 million gallons/year |
Despite higher volumes, supply is concentrated. A handful of large plants account for much of the output, with Montana Renewables now a leading producer after its 2025 expansion. That concentration can limit flexibility when feedstocks get tight or when maintenance takes a unit offline.
Federal cuts have also slowed some new R&D and infrastructure projects, particularly those that depended on grant funding. Producers say existing facilities are still supported by tax credits and loan guarantees, but pilot lines and early‑stage technology may wait for clearer federal direction or stronger state incentives before moving ahead.
The Renewable Fuel Standard remains a key framework for advanced fuels, including SAF. But with proposed volumes favoring conventional biofuels, developers of newer pathways—waste‑based, residue‑based, or synthetic—are pushing for stronger signals. Many want multi‑year certainty for Section 45Z beyond its short window, plus alignment between federal lifecycle accounting and state LCFS rules to lower compliance risk across markets.
Typical project development pathway
Producers describe a common build path with sequential steps:
- Lock in sustainable feedstocks (waste oils, ag residues, crop oils).
- Secure permits and financing tied to LCFS credits,
Section 45Z, and sometimes USDA‑linked loan guarantees. - Retrofit or build plants able to meet ASTM D7566 and blend into conventional jet fuel.
- Finalize offtake contracts with airlines and organize airport delivery logistics.
Each step is easier when policy is stable and when state and federal rules align on how to count carbon reductions.
Demand, markets, and politics
For airlines, the 2025 story is compliance and availability. Carriers serving the EU and UK must plan for rising blend rates, pushing them to sign long‑term deals now. U.S. airports in states with low‑carbon programs seek assured flows to capture credits.
Key market observations:
- SAF remains scarce relative to demand, favoring large buyers willing to commit early.
- States and international mandates are driving procurement even as federal policy is unsettled.
- Environmental groups press for stronger sustainability filters, urging policy to favor waste‑based and synthetic routes to limit land‑use pressure.
The politics remain fluid. Support increased under President Biden from 2021 to 2024 through the Inflation Reduction Act and infrastructure funding, but 2025 cuts under President Trump changed the federal balance. While crop‑based biofuels still see support, advanced renewables face a narrower lane at the federal level. States are filling some of the gap, and international mandates are setting a rising floor for demand.
Important: Industry actors consistently cite the need for long‑term federal certainty—multi‑year credits, aligned lifecycle accounting, and harmonized standards—if today’s momentum is to translate into durable, economy‑wide supply.
Analysts forecast cautious growth tied to policy clarity:
- 5–10% SAF share of U.S. jet fuel by 2030 if supportive policies continue.
- ~3 billion gallons annually by 2030, with potential to reach 35 billion gallons by 2050 if incentives and standards stay in place and scale‑up costs fall.
Conclusion: a year of two speeds
2025 is a year of two speeds: policy uncertainty in Washington and steady, sometimes rapid growth on the ground. With Sustainable aviation fuel now a fixture of airline planning—and more rules coming abroad—the key question remains whether federal policy will deliver the long‑term certainty producers say they need to turn today’s momentum into durable, economy‑wide supply.
This Article in a Nutshell
SAF surged to ~30,000 b/d by mid‑2025 amid federal grant cuts. States, LCFS, and international mandates sustain demand while investors seek long‑term Section 45Z certainty to finance large plants and align lifecycle accounting for scalable, resilient supply chains.
