The Cost of SAF, According to Whom?
The first piece in this series argued that SAF is benchmarked against the wrong fuel. The second argued that its energy value and its sustainability value sit in two markets that almost never clear at the same price. This piece sits one layer underneath both. Even inside the energy value alone, “the price of SAF” is not a number. It is a stack of numbers, generated at different points in the supply chain, governed by different dynamics, and almost entirely opaque to anyone outside the bilateral deal. That opacity is becoming a structural barrier to the transparency this market needs to scale, rather than a side effect
Three layers, three different prices
Walk a molecule of SAF from the production gate to the wing of an aircraft, and you cross at least three pricing layers.
Layer one is the producer. Breakeven economics: feedstock, opex, capex, incentives, by pathway, by geography. The producer sees one number, ex-refinery. For 2024, EASA’s reference price for aviation biofuels was EUR 2,085 per tonne, against EUR 734 per tonne for conventional jet fuel, a 2.8x ratio.
That number, though, effectively prices just one technology. EASA’s own October 2025 technical report confirms that 98% of the SAF supplied at EU airports in 2024 was biofuel, of which 81% was used cooking oil and 17% waste animal fats. In transaction terms, the 2024 SAF market was, almost entirely, a HEFA market. EASA does publish reference prices for the other pathways (advanced aviation biofuels at EUR 2,715 per tonne, synthetic aviation fuels at EUR 7,695, atmospheric-CO2 e-SAF at EUR 8,470), but it is explicit that those are production cost estimations, calculated bottom-up because no market prices existed to reference. They are model outputs. When the industry talks about “the price of SAF” today, it is almost always talking about HEFA. The economics of every other pathway exist on paper, in regulator workbooks and producer pro formas, but not yet in the trading record. And even on HEFA, EASA notes that the reference price “does not capture downstream components, such as costs associated with blending, distribution, and downstream actors’ (such as aviation fuel suppliers’) profit margins.” The regulator setting the price the penalty regime references is openly acknowledging that the number stops at the refinery gate.
Layer two is the middleman. It might be worth being precise about what is and is not opaque. Conventional jet fuel supply has different structures in different markets, but those structures are pretty clear. In the United States, airlines operate with different procurement models, and pretty much everyone knows what they are. Southwest Airlines, for instance, moves a large share of its own jet fuel directly from refiners to its destination airports under its own logistics arrangements. Other carriers contract through fuel suppliers, traders, and consortia. A few have integrated further upstream. Each model has its own economics, but pricing references visible benchmarks (Jet Fuel Cargoes CIF NWE in Europe, US Gulf Coast and New York Harbor benchmarks in the US, the Platts indices airlines and refiners actually trade against), liquidity is deep enough that price discovery is genuine, and airlines without an internal supply capability can buy into a market that has many participants and observable terms. Conventional jet fuel is structurally varied. It is not structurally opaque.
SAF changes the picture because it introduces a step that conventional jet fuel does not require: blending. SAF, by current ASTM specification, cannot be uplifted neat. It must be blended with conventional jet fuel up to a defined ratio under the relevant ASTM annex, then tested, certified, and released against the ASTM D1655 specification before it can enter the airport fuel system. The work is not a routine mixing operation. Each pathway has its own composition limits and quality assurance protocols, the blends have to be characterized and certified per batch, and the documentation has to support the mass balance claims that underpin sustainability accounting. Get the specs wrong and the cost of remediation, or of contaminating the certified fuel pool, is significant. Blending SAF is technical work that requires specific expertise, equipment, and quality systems, and most airlines and most fuel farm operators do not perform it themselves today.
While the producer can make SAF, and the airline can contract for it, neither party typically blends it. So the molecule has to pass through a third party with the blending capability, the certified storage, and the institutional setup to release the blended product as ASTM D1655 fuel. Who that third party is varies by market. In Europe, it often sits inside an airport-anchored joint venture. At London Heathrow, the freehold over the land and the fuel facilities is held by Heathrow Airport Limited; the hydrant systems and one fuel farm are leased to the Heathrow Hydrant Operating Company, a JV of BP, British Airways, ExxonMobil, Q8 Aviation, Shell, TotalEnergies, Valero, and Vitol; the receipt facilities, transfer pipelines, and the other fuel farm are leased to HAFCO; and into-plane services are contracted separately by each airline. At Amsterdam Schiphol, Aircraft Fuel Supply B.V. holds the concession from the Schiphol Airport Authority to manage storage and distribution of jet fuel “on behalf of its shareholders to airlines.” Its shareholders include major airlines, oil majors, China Aviation Oil at 12.5%, and Neste, which acquired its minority position in 2020 specifically to enable SAF supply at the airport. In the United States, the third party is typically not an airport JV but a midstream operator or a major refiner that handles the blending and resells the certified blended product into the consortium fuel farm or directly to the airline. In every case, whoever does the blending sits at the gate between the producer and the airline.
This is where the deeper tension shows up. Airlines want to procure SAF the way they procure conventional jet fuel: long-term offtake agreements with producers, secured volumes, locked-in pricing. They announce these deals in those terms. And on the conventional fuel side, an offtake announcement maps cleanly to operational reality, because airlines either move their own fuel, own the refinery, or have direct relationships with suppliers they have worked with for decades. On the SAF side, the announcement and the supply integration can come apart. A US carrier announcing an offtake from a US producer can typically integrate that supply into their domestic operations using the same logistics they already control. The same carrier announcing an offtake destined for European routes runs into a different reality: the fuel cannot reach their aircraft at Schiphol or Heathrow except through the JV that holds the airport concession and performs the blending. The pattern shows up in the geography of public offtake announcements with most US-carrier SAF offtake announcements focused on US operations. The European announcements that do exist tend to come from carriers with structural positions inside the local supply ecosystem, where the airline is close enough to the JV or the supplier to negotiate volumes and terms directly. Foreign carriers operating into those same airports do not announce offtakes in the same way, likely because they do not control the integration. They pay what the obligated supplier at the airport charges, and on the schedule the supplier sets. Whether the JV sets the price for blended SAF directly, whether each airline negotiates with the JV bilaterally, whether the JV coordinates between airline and supplier and takes a margin in the middle, or whether each airline routes its offtake through a supplier on the airport’s approved list, is not publicly disclosed in any consistent way. The airline can announce the offtake. It does not control the path that offtake takes through the JV into its operations.
From the airline side, especially for carriers without a structural position inside the local supply ecosystem, the question “what does SAF cost?” is genuinely uncertain. They receive a price from the obligated supplier, but they cannot independently verify what that price reflects. From the industry side, the same question is opaque. The participants in the transaction (the producer, the middleman, the obligated supplier, the buying airline) each know their own number. The audit, the benchmark, the hedger, and the financier do not. Uncertainty to the airline, opacity to the rest of the industry, and the two reinforce each other: when the buyer cannot challenge the price, the price stays private, and when the price stays private, the buyer has nothing to challenge it against.
Layer three is the buyer. Most often that is the airline, which contracts directly with a fuel supplier for blended product certified to Jet A or Jet A-1, with the configuration varied. In some European markets, the airport itself sits near the transaction as the concession authority that delegates fuel handling to a JV in which it retains visibility, as at Schiphol. In other markets, the airline buys directly from the supplier with no airport involvement in the fuel transaction at all. Wherever the buyer sits in the chain, the contracted price is bilateral and undisclosed. ReFuelEU requires fuel suppliers to report volumes, not prices. In the United States, jet fuel pricing terms are commercial-in-confidence by routine. The same supplier can sell the same SAF, from the same blending facility, at the same airport, to two airlines on the same day, for two different prices. Nothing in the rulebook prevents that, and nothing in the reporting requires it to be visible.
And the buyer is itself not a single category. A commercial passenger carrier, a cargo airline, and a business or private aviation operator each likely sit in a different place on the willingness-to-pay curve, even if outside observers cannot see the actual transaction prices to confirm it. Commercial passenger carriers, operating on thin margins against price-sensitive leisure and corporate travel demand, would tend to sit at the bottom. Cargo airlines could sit higher, since SAF can be passed through to corporate shippers with their own scope 3 reporting requirements, and major freight customers are increasingly willing to fund the premium directly. Business and private aviation may sit highest, because the customer is buying the experience as well as the fuel, and a premium can be more easily absorbed into a charter or ownership cost structure that already runs at multiples of commercial economics. If those patterns hold, the same SAF molecule, blended at the same facility, could be sold at three meaningfully different prices to three different customer segments at the same airport.
Three layers, three different prices, one molecule, none of them visible to anyone but the two parties on the contract. And of the three, it is Layer 2 (the middleman, the JV, the consortium, the midstream operator) where the opacity concentrates and where any meaningful move toward transparency has to begin. Today, at 2% mandate levels, the system absorbs the opacity. At 6% in 2030, and at higher rates beyond that, opacity itself starts to look like a cost. It may misprice compliance for fuel suppliers, who could end up pricing closer to the penalty ceiling than to the cost floor when no one outside the contract can tell the difference. It misprices fuel hedging for airlines as a matter of mechanical fact, because the SAF component of their forward fuel cost has no observable curve. And it likely misprices the SAF asset class for everyone trying to underwrite it, from project finance to government guarantees to insurance. In a voluntary market, this is a commercial inconvenience. In a mandated market, it becomes a leverage point.
The mandate dynamic
ReFuelEU Aviation, in force since January 2025, places the SAF blending obligation on aviation fuel suppliers, not on airlines. The 2025 target is 2% at Union airports. The minimum penalty is at least twice the price difference between SAF and conventional jet fuel, multiplied by the shortfall volume, plus an obligation to make up the missing volume the following year, an effective penalty of roughly three times the cost of compliance. The UK SAF Mandate does something structurally similar through a buy-out price (GBP 4.70 per litre on the main obligation, GBP 5.00 on power-to-liquid), which Carbon Direct estimated at roughly $23.55 per gallon of unmet obligation, between 3x and 13x compliance cost. Both regimes designed the penalty as a ceiling, not a target. The intent is that compliance is always cheaper than buy-out. The intent is rational.
The market dynamic that follows is harder to characterise with certainty, but worth thinking through. If a supplier knows the airline’s only alternative to buying SAF from them is paying a regulator-imposed penalty (directly, or through pass-through), the supplier’s ceiling price to the airline could be the penalty rather than the producer’s cost. The price the airline pays would then be tethered to the cost of not buying SAF, not the cost of making it. Whether the system actually operates closer to that ceiling, closer to the producer cost floor, or somewhere in between is not something observers outside the contracts can determine. The relevant data point, transaction-level pricing, is not disclosed.
There is a further wrinkle here that goes to the heart of the uncertainty problem from the airline’s perspective. The price an obligated supplier charges for SAF may not be the price the obligated supplier paid for it. None of us outside the bilateral contracts can say for certain, but the structure of how compliance is calculated leaves room for that gap. Mandate compliance is measured annually against pooled volumes across all the airports a supplier serves, not per delivery and not per customer. A supplier could have procured the underlying SAF at one price months earlier, blended it across multiple deliveries, and then allocated a customer-level charge that reflects the supplier’s compliance economics rather than the producer’s cost. Whether that happens, and to what extent, is not publicly visible. What is visible is what the airline experiences: an invoice arrives, the airline pays it, and the airline has no independent way to verify what fraction of the invoice reflects producer cost, what fraction reflects blending and logistics, what fraction reflects the supplier’s pass-through of its own compliance obligation, and what fraction reflects pricing closer to the penalty ceiling because no benchmark exists to discipline it.
A related dimension worth flagging: mandate compliance is measured at year-end, and there is no requirement to disclose when within the year the SAF was procured or billed. Prices appear to drift higher toward year-end. Several explanations are plausible (seasonal procurement, middleman arbitrage, suppliers pricing closer to the penalty ceiling as the deadline approaches), and others may exist that observers outside the contracts have not even hypothesised. Without time-resolved transaction data, no one outside the bilateral relationships can distinguish between them.
What transparency could look like
If the diagnosis is right, then transparency has to be built at two layers: the financial layer of how compliance is funded and reported, and the physical layer of who controls the blending and on what commercial terms. Neither is sufficient on its own.
The financial layer. Singapore is currently a very interesting setup. The CAAS SAF Levy, introduced in April 2026, applies a per-passenger charge that varies by destination band and cabin class. The levy is collected by airlines and displayed as a distinct line item on the ticket. Proceeds are pooled in a statutory SAF Fund administered by the Singapore Sustainable Aviation Fuel Company, which centrally procures SAF and environmental attributes against Singapore’s 1% target for 2026. The passenger sees the premium. The state sees the procurement, and the auditors see the fund. There are real critiques (Singapore deferred the levy in March 2026 in response to the Strait of Hormuz disruption, a levy is not a mandate, demand aggregation through a state-adjacent procurement vehicle is not a competitive market), but the design decision worth borrowing is the simplest one: transparency was built in from the start, rather than retrofitted later. ReFuelEU requires volume reporting but not price disclosure and the UK Mandate operates a certificate market without publishing transaction prices. A more transparent SAF market would not require any party to give up confidentiality on individual deals. It could publish bid/ask ranges at major mandated airports, disclose compliance pricing quarterly, separate production cost from blending and supplier margin in the reference prices, and harmonise reporting categories across airports so they can be compared.
The physical layer. The reason the middleman holds pricing power in Layer 2 is that, at most major airports, blending is bundled with the storage, the certification, and the release into the airport fuel system. The producer cannot get to the airline without going through that bundled service, and in many cases, the service is negotiated bilaterally. There is no spot market for SAF blending capacity and there does not have to be only one model. Modular blending infrastructure, deployable as a standalone capability rather than as part of the hub fuel oligopoly or the US midstream blending chain, is starting to reach commercial scale. FlyORO, a Singapore-based company, is one example: its AlphaLite platform is a modular blending unit that lets a SAF producer blend and certify their product through a standalone asset rather than handing it to a midstream operator or a hub fuel JV to do the same job. The point is not the technology. It is the commercial geometry the technology makes possible. If a producer can blend through a modular asset they own, lease, or contract on standard terms, instead of through a bundled service negotiated bilaterally, the producer keeps control of pricing at the Layer 2 handoff, and a standardised blending fee, published per litre or per tonne and consistent across customers, would do for the physical layer what Singapore’s SAF Fund is trying to do for the financial layer: turn a bilateral negotiation into a reference price the rest of the market can see.
Modular blending will not likely re-architect Heathrow or Schiphol as those airports were built around their incumbents. But the next wave of SAF capacity, especially in Asia-Pacific and in any new-build airport infrastructure, is being designed now. Whether that infrastructure inherits the same opacity or is built open by design is a decision being taken in real time.
What this asks of the room
Aviation has built three good policy instruments (ReFuelEU, the UK Mandate, the Singapore Levy) on top of a market that prices itself in private. We are now asking that market to scale roughly twenty-fivefold by 2050. Before that scaling can happen, the prices that already exist need to be visible to someone other than the two parties who signed the contract. Some of that visibility will come from policy, and some will come from infrastructure choices that build standard terms into the supply chain instead of leaving them to bilateral negotiation.
For the regulators in this room: the next iteration of mandate reporting can require price disclosure, in addition to volume, without compromising commercial confidentiality on individual deals. The reference price methodology can extend past the refinery gate. For the airline CFOs: a SAF curve you can hedge against is not currently available to you, and that is more of a procurement problem, rather than a sustainability problem. For the airport and fuel infrastructure owners: the question of whether to keep blending bundled with the hub fuel service, or to open it as a standalone capability under standard commercial terms, is one of the most consequential decisions in the next phase of this industry. For SAF producers, especially in the pathways that have no transaction record yet: the routes to market you negotiate now will likely set the reference prices the rest of the market reads later. It would be important to negotiate both the geometry, and the price. The visibility we need is a smaller ask than the policy infrastructure already built on top of it, and it is the prerequisite for everything else this market is trying to do.
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Sources for figures and regulatory detail used in this piece include the EASA ReFuelEU Aviation Annual Technical Report 2025 (October 2025) and the accompanying 2024 Aviation Fuels Reference Prices briefing, the UK Department for Transport SAF Mandate compliance guidance, Carbon Direct’s May 2025 analysis of EU/UK compliance penalties, the CAAS announcement of the Sustainable Aviation Fuel Levy, public materials from FlyORO, and conversations with market participants closer to the trading flows than the author. Industry analysis referenced throughout reflects the author’s own synthesis and not the position of any single source.
Elvis Ebikade, PhD · Founder & Principal, Vansam Advisory
Elvis Ebikade, PhD is Founder and Principal of Vansam Advisory, an independent SAF commercial-strategy firm that translates technology and technical work into the commercial case for cost, carbon intensity, offtake, and capital.
