# Renewable diesel and SAF and Transport and logistics Renewable diesel (HVO) and sustainable aviation fuel are drop-in fuels that let trucks and aircraft cut emissions without new engines, but SAF was only about 0.6% of jet fuel in 2025 at roughly twice the price, so mandates such as ReFuelEU and India's 2027 target turn them into a cost line for airlines and logistics firms. Source page: https://www.materialinsights.org/links/renewable-diesel-and-saf-and-transport-and-logistics/ [Renewable diesel and SAF](https://www.materialinsights.org/energy/hvo_saf/) (chemical) and [Transport and logistics](https://www.materialinsights.org/industries/transport_logistics/) (industry): 4 relationships. ## How they are linked ### 1. Drop-in low-carbon fuel *Physical flow · Medium · HVO and SAF → trucks, aircraft and fuel suppliers* HVO and HEFA-type SAF are chemically similar to fossil diesel and jet fuel, so they can be blended or used in existing engines and fuel systems; three enterprise types in transport and logistics depend on them, rated up to 4 of 5. - **3** enterprise types that depend on them - **4 of 5** criticality for fuel and energy suppliers (low-carbon jet and diesel) - **about 0.6%** SAF share of world jet fuel use, 2025 Fuel suppliers rate them 4 of 5 because mandates oblige them to supply blends; airports, air cargo carriers and express integrators rate them 3 of 5 because SAF must be available at hubs to meet customer and regulatory targets. IATA expects world SAF output of about 1.9 Mt in 2025, double the 1 Mt of 2024, and about 2.4 Mt in 2026, so physical volumes are still tiny next to jet fuel demand. Enterprise types that depend on it: - Fuel and energy suppliers (diesel, bunker, jet fuel, charging): low-carbon jet and diesel (criticality 4 of 5) - Airport and air-cargo terminal operators: SAF supply at hubs (criticality 3 of 5) - Air cargo carriers and express integrators: sustainable aviation fuel (criticality 3 of 5) Sources: [Material Insights](https://www.materialinsights.org/industries/transport_logistics/materials/); [IATA](https://www.iata.org/en/pressroom/2025-releases/2025-12-09-04/) ### 2. Fuel cost premium *Cost and price · Rising · SAF premium → airline and air cargo costs* SAF costs much more than fossil jet fuel, so each step up in the blend raises operating costs for carriers and their cargo and travel customers. - **about 2 times** SAF price relative to fossil jet fuel, 2025, and up to 5 times in mandated markets - **$3.6 billion** extra fuel cost to airlines from the SAF premium, 2025 IATA puts the premium paid for the 1.9 Mt available in 2025 at about $2.9 billion and the extra fuel cost to the industry at about $3.6 billion, and warns that European compliance costs could reach €29 billion by 2032 if targets are not met. The premium is highest where mandates force demand ahead of supply, so the cost falls hardest in mandated markets such as the EU and the UK. Sources: [IATA](https://www.iata.org/en/pressroom/2025-releases/2025-12-09-04/) ### 3. Blending mandates *Policy · Strong · Mandates → fuel suppliers → carriers* Demand for SAF exists mainly because governments require it, so mandate levels set the volume and cost that transport operators face. - **2%, 6%, 70%** ReFuelEU minimum SAF share at EU airports in 2025, 2030 and 2050 (20% in 2035) - **1% and 2%** India's SAF blending targets for international flights in 2027 and 2028 ReFuelEU also requires 1.2% synthetic fuel from 2030, rising to 35% in 2050, and obliges airlines to uplift at least 90% of their yearly fuel at each EU airport, which stops them avoiding the mandate by tankering cheaper fuel from outside. India's targets, set by the National Biofuels Coordination Committee in November 2023, start with international flights. Sources: [European Parliament](https://www.europarl.europa.eu/news/de/press-room/20230424IPR82023/fit-for-55-parliament-and-council-reach-deal-on-greener-aviation-fuels); [Hydrocarbon Processing (Council of the EU)](https://hydrocarbonprocessing.com/news/2023/10/refueleu-aviation-initiative-council-adopts-new-law-to-decarbonize-the-aviation-sector/); [S&P Global Commodity Insights](https://www.spglobal.com/energy/en/news-research/latest-news/energy-transition/112723-india-announces-saf-targets-biogas-blending-mandates) ### 4. Road and air compete for feedstock *Substitution · Medium · HVO for trucks ↔ SAF for aircraft* Renewable diesel and HEFA SAF are made from the same waste and residue oils, such as used cooking oil, in similar hydrotreating plants, so producers can shift output between road and air fuel according to which mandate or credit pays more. - **30 Mt a year** projected residue oil demand for biofuels by 2030, up 70% - **nearly 80%** share of estimated residue oil supply potential that would be used, 2030 The IEA expects aviation and maritime demand to intensify competition for residue oils, so rising aviation mandates can pull feedstock and capacity away from HVO and tighten renewable diesel supply for trucking fleets. It expects aviation biofuels to reach only near 2% of aviation fuel supply by 2030. Sources: [IEA Bioenergy](https://www.ieabioenergy.com/blog/publications/iea-renewable-fuels-are-essential-to-energy-transitions-but-growth-is-lagging-behind/) ## For investors ### Key learnings 1. SAF demand is set mainly by mandates: volumes and prices follow rules such as ReFuelEU's 2% in 2025 and 6% in 2030 more than airline choice. 2. The SAF premium added about $3.6 billion to airline fuel costs in 2025, a cost that rises with each mandate step and is highest in mandated markets. 3. Renewable diesel and SAF compete for the same residue oils, so a rising aviation mandate can tighten HVO supply and raise costs for truck fleets. ### What to track - **SAF and HVO price premium over fossil jet and diesel**: Cost pressure on airlines, cargo carriers and fleets (Weekly · Argus, Platts) - **World SAF production**: Whether supply keeps pace with mandates (Yearly · IATA) - **Used cooking oil and residue oil prices**: Feedstock squeeze between road and air fuels (Weekly · Argus, Fastmarkets) ## For policymakers ### Key learnings 1. India's 1% SAF target for international flights in 2027 will need dedicated feedstock and refinery capacity, or imported SAF at a premium. 2. Waste oils are limited, with demand projected to claim nearly 80% of residue oil supply potential by 2030, so collection of used cooking oil matters for fuel policy. 3. Mandates that are set ahead of supply raise transport costs sharply, as the up to five-fold premium in mandated markets shows. ### What to track - **SAF blending achieved on international flights from India**: Progress against the 2027 and 2028 targets (Yearly · Ministry of Petroleum and Natural Gas, Ministry of Civil Aviation) - **Used cooking oil collected for biofuel**: Domestic feedstock available for HVO and SAF (Yearly · FSSAI, oil marketing companies) ## India India has set SAF blending targets of 1% in 2027 and 2% in 2028 for international flights; meeting them will need domestic SAF production or imports, and feedstock such as used cooking oil that road biofuels also use. ## Sources 1. [Transport and logistics: materials](https://www.materialinsights.org/industries/transport_logistics/materials/), Material Insights (2026) 2. [SAF production growth slows; policy shortcomings raise costs](https://www.iata.org/en/pressroom/2025-releases/2025-12-09-04/), IATA (2025) 3. [Fit for 55: Parliament and Council reach deal on greener aviation fuels](https://www.europarl.europa.eu/news/de/press-room/20230424IPR82023/fit-for-55-parliament-and-council-reach-deal-on-greener-aviation-fuels), European Parliament (2023) 4. [RefuelEU aviation initiative: Council adopts new law to decarbonise the aviation sector](https://hydrocarbonprocessing.com/news/2023/10/refueleu-aviation-initiative-council-adopts-new-law-to-decarbonize-the-aviation-sector/), Hydrocarbon Processing (Council of the EU) (2023) 5. [India announces SAF targets, biogas blending mandates](https://www.spglobal.com/energy/en/news-research/latest-news/energy-transition/112723-india-announces-saf-targets-biogas-blending-mandates), S&P Global Commodity Insights (2023) 6. [IEA: renewable fuels are essential to energy transitions, but growth is lagging behind (Renewables 2024)](https://www.ieabioenergy.com/blog/publications/iea-renewable-fuels-are-essential-to-energy-transitions-but-growth-is-lagging-behind/), IEA Bioenergy (2024)