How the Japan Sustainable Aviation Fuel (SAF) Market Is Accelerating the Aviation Industry's Net-Zero Transition

Executive Summary

Japan Sustainable Aviation Fuel (SAF) Market is estimated to record a value of USD 7,081 million in 2028 and is estimated to reach a value of 149,633 million by 2036 with a CAGR of 46.4% during the forecast period.

The growing accessibility of used cooking oil (UCO) and waste-based feedstocks is emerging as a key growth driver for the Japan Sustainable Aviation Fuel (SAF) Market. This trend allows domestic producers to decrease their dependence on virgin vegetable oils while simultaneously enhancing lifecycle carbon performance. Japan is estimated to generate approximately 450,000–500,000 metric tons of used cooking oil each year, with sources including restaurants, food processing companies, hotels, and institutional kitchens.

In response, municipalities and private waste management firms are bolstering collection networks through circular economy initiatives. These efforts are aimed at improving feedstock traceability and diverting waste oils from disposal to renewable fuel production, thereby enhancing feedstock security for HEFA-based SAF facilities and aligning with national resource efficiency goals.

Various Japanese refiners and aviation stakeholders are forming partnerships with local collection companies to secure long-term UCO supplies. This collaboration minimizes procurement risks and enhances plant utilization. In addition to UCO, the importance of other waste-based feedstocks, including animal fats, food waste residues, and municipal organic waste, is increasing as producers look to diversify their raw material sources. Such initiatives also contribute to reduced landfill disposal and lower greenhouse gas emissions associated with waste management.

Moreover, the implementation of digital traceability systems and sustainability certification is further enhancing supply chain transparency, ensuring adherence to international aviation fuel standards. As the commercial SAF capacity grows, the domestically collected waste feedstocks are projected to offset a portion of imported raw materials, thereby reinforcing supply resilience. Overall, circular economy initiatives focused on waste valorization are anticipated to play a crucial role in improving feedstock availability, mitigating production risks, and bolstering the long-term competitiveness of the Japan Sustainable Aviation Fuel (SAF) Market.

Key Highlights

• Used Cooking Oil (UCO) dominates the Japan Sustainable Aviation Fuel (SAF) Market with an estimated 42.8% market share, driven by commercial HEFA production and established collection networks.
• Vegetable Oils account for approximately 16.5% of the Japan Sustainable Aviation Fuel (SAF) Market, supporting early-stage production where certified waste feedstocks are limited.
• Agricultural Residues contribute around 11.2%, gaining traction through biomass conversion and second-generation SAF projects.
• Forestry Residues hold nearly 9.4% market share, leveraging Japan's abundant forest resources for Fischer-Tropsch and biomass-based fuel pathways.
• Green Hydrogen & Captured CO₂ represent about 6.8% of the Japan Sustainable Aviation Fuel (SAF) Market and are expected to record the fastest long-term growth through e-SAF development.
• Municipal Solid Waste (MSW) accounts for approximately 5.6%, supported by circular economy initiatives and waste-to-fuel technologies.
• Animal Fats & Tallow, Industrial Waste Gases, Algae, and Others collectively contribute around 7.7%, reflecting emerging feedstocks with strong future commercialization potential.

Analyst View

“The gradual commercialization of Power-to-Liquid (PtL) and Alcohol-to-Jet (ATJ) technologies presents a substantial challenge for the Japan Sustainable Aviation Fuel (SAF) Market, despite their significant long-term potential to diversify feedstock sources beyond used cooking oil and waste lipids. The production of PtL necessitates substantial volumes of renewable electricity, green hydrogen, and captured carbon dioxide. Consequently, the economics of such projects are heavily influenced by the decreasing costs of electrolyzers and the growth of renewable power capacity. Likewise, ATJ technology depends on sustainable ethanol or other alcohol feedstocks, while involving additional catalytic upgrading processes that drive up capital expenditures and complicate production.

In contrast to the well-established HEFA pathways, both PtL and ATJ currently have fewer operational plants and limited large-scale production experience. This situation leads to extended qualification timelines and increased investment risks. As a result, airlines and fuel suppliers continue to focus on HEFA-derived SAF for their near-term supply needs. Until production efficiency improves and commercial facilities reach economies of scale, the Japan Sustainable Aviation Fuel (SAF) Market is likely to remain predominantly reliant on established technologies, with PtL and ATJ expected to progress gradually through demonstration projects, strategic partnerships, and ongoing technological advancements.”

About Research

The Japan Sustainable Aviation Fuel (SAF) Market is hypothesized to experience robust long-term growth, driven by Japan's aviation decarbonization strategy, increasing domestic SAF production capacity, and the government's 10% SAF adoption target for international flights by 2030. Market expansion is expected to be supported by refinery conversions, stronger airline offtake agreements, and greater utilization of waste-based feedstocks such as used cooking oil (UCO). Although limited feedstock availability and the slow commercialization of Power-to-Liquid (PtL) and Alcohol-to-Jet (ATJ) technologies may constrain near-term growth, continued investment in green hydrogen, circular economy initiatives, and airport fueling infrastructure is anticipated to strengthen the competitiveness and supply resilience of the Japan Sustainable Aviation Fuel (SAF) Market over the forecast period.