Asia-Pacific Sustainable Aviation Fuel Outlook 2025: Progress, challenges, and pathways
REPORT EXECUTIVE SUMMARY
The Asia-Pacific region has fundamentally shifted its approach to sustainable aviation fuel over the past year. Since 2024, multiple APAC governments have moved from tentative goals to concrete blending targets and mandates. Japan is finalising a 10% SAF mandate by 2030, India has set targets starting in 2027, and several Southeast Asian nations (Indonesia, Malaysia, Thailand) have introduced SAF blending roadmaps beginning around 2027. Singapore stands out with a confirmed near-term goal of 1% SAF by 2026, potentially rising to 3-5% by 2030, making it an early adopter in the region. In short, 2025 is the year APAC moved from aspiration to action on SAF policy, laying the regulatory groundwork that was largely missing in 2024.
APAC's SAF production capacity has grown and diversified since last year. The region is now home to one of the world's largest SAF production hubs: Neste's expanded Singapore refinery, which began pumping out SAF in commercial volumes and supplying carriers and logistics companies in the region. New domestic production projects have been announced or advanced in multiple countries. Australia is pursuing its first commercial SAF plants (one project in Queensland aims to produce around 100 million litres per year from ethanol by 2026-2027, backed by Qantas, Airbus and government funding), and Japan's major energy firms have completed pilot facilities for synthetic e-fuels. In China, state-owned producers achieved initial SAF outputs and the government set a 50,000-tonne SAF production target by 2025. Regional supply chains are also maturing: airlines like All Nippon Airways and Japan Airlines in late 2024 began using domestically-blended SAF on commercial flights for the first time, and Hong Kong saw its first large corporate SAF purchase (3,400 tonnes by HSBC/Cathay Pacific). Compared to a year ago, these developments mean APAC now has some SAF flowing into aircraft engines rather than SAF being purely theoretical.
Since 2024, there has been a notable rise in funding commitments and joint ventures to kickstart APAC's SAF industry. Government incentives have emerged where none existed before. Notably, in September 2025 Australia announced a A$1.1 billion (US$735 million) 'Cleaner Fuels' programme, a ten-year fund to support domestic production of biofuels and e-fuels with the aim of having projects producing fuel by 2029. This marks the first major APAC government subsidy programme for SAF. Private-sector investment alliances have grown. Qantas and Airbus's Sustainable Aviation Fuel Financing Alliance (SAFFA) had around US$200 million committed by mid-2024 to invest in SAF production projects globally. Through such alliances, APAC airlines are co-financing new SAF technologies and securing future supply. Airlines are also signing long-term offtake agreements: Japan Airlines, for instance, agreed to a 10-year SAF supply MOU with US-based Raven SR, starting with 50,000 tonnes in 2025 and scaling to 200,000 tonnes per year within a decade. The past 12 months saw APAC governments and companies putting real money on the table, a clear sign that the business case for SAF is being taken seriously in the region.
The global SAF landscape has also shifted in ways that affect APAC. Europe's SAF blending mandate kicked in on 1 January 2025 (starting at 2%), and the United States' tax credit incentives under the 2022 IRA are now spurring dozens of new SAF projects. Over the past year, SAF produced in Asia has tended to flow to Europe where mandates create a price premium, raising concerns that APAC might face local shortages or higher costs if it lags behind in policy. IATA reports that most SAF supply in 2025 is headed to Europe, and warns that Europe's approach has driven SAF prices to five times that of conventional jet fuel. This external pressure is a key reason APAC policymakers have hastened their own SAF agendas since 2024. APAC's response through mandates, partnerships, and capacity-building will determine whether it remains a net importer of SAF credits to meet climate goals, or becomes a competitive producer.
APAC's SAF landscape in 2025 is defined by emerging policy frameworks, initial production capacity, and mobilised financing, a notable evolution from 2024's landscape of voluntary airline pledges and theoretical potential. We now see the first concrete mandates on the horizon (most starting latest by 2027), significant capital being directed into SAF ventures, and early adoption mechanisms like book-and-claim gaining traction. Still, the region faces familiar hurdles: high SAF costs, limited near-term supply, feedstock logistics, and the need for broader infrastructure. This report will examine these developments in detail, outline the key challenges and opportunities as the region navigates the pivotal 2025-2027 period on its journey toward cleaner aviation fuel.