○ Sustainable Aviation Fuel (SAF) is an eco-friendly fuel that reduces life-cycle greenhouse gas emissions by at least 10% compared to conventional aviation fuel.

• IATA forecasts that SAF will contribute approximately 65% toward achieving the aviation industry's 2050 net-zero goal.

• Production technologies are categorized into co-processing, HEFA, ATJ, GTL (Gas-to-Liquid), and PtL (Power-to-Liquid). While co-processing and HEFA are led by traditional refiners, ATJ, GTL, and PtL are being revitalized primarily by new market entrants.

○ Driven by net-zero commitments and blending mandates in major regions like the EU, the U.S., and Japan, the SAF market is expected to bloom in earnest around 2030.

• Due to its high energy density and compatibility with existing infrastructure, SAF is gaining attention as the most realistic alternative for long-haul aviation compared to batteries or hydrogen.

• The initial market structure was refiner-led, centered on HEFA. However, due to feedstock constraints, ATJ is expected to emerge in the 2030s, followed by PtL as the mainstream technology after 2040 to achieve full carbon neutrality.

• The currently oversupplied SAF market is projected to grow to approximately U$44 billion by 2030, with demand exceeding supply. By 2050, it is expected to replace more than half of the total aviation fuel demand.

○ The SAF market presents different opportunities and risks for HEFA, ATJ, and PtL based on technological maturity and feedstock limitations.

• [HEFA] Faced with risks such as regulations on food-based resources and heavy reliance on China for used cooking oil. New entry is limited as refiners dominate production and trading.

• [ATJ] Feedstocks (sugarcane, corn) are concentrated in specific regions, but stable supply is possible when linked to local production. Opportunities exist for feedstock diversification, such as using industrial off-gas, and production is promising for companies with differentiated technologies.

• [PtL] The ability to secure $CO_2$ and clean hydrogen is the core competency. Production will be led by early movers, while trading leadership is expected to be captured by firms with dominant international distribution networks.

○ The proliferation of SAF will trigger a structural shift in the industry beyond mere fuel replacement.

• The landscape will shift from crude oil dependency to a competitive structure of diversified feedstocks, including fats/oils, biomass, and industrial gases.

• Production will expand from a refiner monopoly to a model led by tech companies and startups, with refiners collaborating through off-take agreements and equity investments.

• Distribution will diversify from refiner-centric channels to a mix of direct transactions by airlines and global distribution networks.

○ The key to forming a market ecosystem lies in: ① securing new technologies centered on ATJ and PtL, ② establishing local production in feedstock-rich countries, ③ initial collaboration with refiners, and ④ utilizing global trading networks.

• In particular, companies that pre-emptively secure feedstock supply chains and global distribution networks possess high potential to dominate the market as SAF demand expands.