12 March 2026 at 05:26 pm IST
Premiums for sustainable aviation fuel (SAF) in Europe have declined as conventional jet fuel prices surged following the escalation of conflict in the Middle East. While SAF prices have also increased, they have risen at a slower pace than fossil-based jet fuel, reducing the price gap between the two. Jet fuel prices in Europe have climbed sharply—rising by around 80% since late February 2026—driven by supply disruptions and increased freight costs linked to the conflict. At the same time, SAF prices rose from approximately $2,294 per metric ton to around $2,640, but their premium over jet fuel narrowed significantly. The shift is partly attributed to logistical challenges, including higher shipping costs and rerouting of fuel shipments due to risks in key maritime routes such as the Red Sea. Europe, which relies heavily on SAF imports, has faced longer shipping distances and increased transport costs as suppliers avoid high-risk zones. The narrowing price gap between SAF and conventional jet fuel could influence the economics of aviation decarbonisation. While SAF remains more expensive, the reduced premium may improve its competitiveness in the short term, even as broader volatility in energy markets highlights the challenges of transitioning to sustainable fuels amid geopolitical uncertainty.
