Jet Fuel Trends & Surge of Sustainable Aviation Fuel in 2024

As we set into 2024, jet fuel demand is growing again at a very fast rate in the aircraft business. But what’s really getting people’s attention is the rise of sustainable aviation fuel (SAF) as an important part of the aircraft industry’s efforts to be more eco-friendly.

Jet Fuel: A Crucial Component

Jet fuel is still the heart of flight; it’s what keeps planes flying. There was a big rise in the demand for jet fuel in 2023, which showed that the economy was still recovering from the terrible effects of the COVID-19 pandemic. Now, in 2024, this upward trend is still going strong, showing that air travel is on the rise again as trust grows and limits are lifted.

Understanding Sustainable Aviation Fuel

But what is sustainable airplane fuel, and why is it becoming more popular? Sustainable aviation fuel, or SAF, is a big change in how the aircraft business is trying to lessen its damage to the environment. SAF is different from regular jet fuel because it is made from things that can be used again and again, like plant oils, farm garbage, and city waste. Because SAF is sustainable, it greatly lowers the carbon footprint of air travel, making it an important tool for businesses to fight climate change.

TSA News and Travel Trends

The Transportation Security Administration (TSA) has new information that keeps up with the rise in demand for jet fuel. There are reports that the number of screenings of passengers is steadily going up, which is a good sign for people who want to travel. This upward trend fits with predictions that the number of flights will keep growing through 2024, which will increase the need for jet fuel even more.

Spot Price vs. Market Price:

People are more interested in how the price of jet fuel changes now that the economy is better. Spot prices, which show deals that are happening right now, are often uncertain because of things like trouble with supply or unrest in the government. Prices on the market, on the other hand, show you a bigger picture because they look at plans and trends for the future. People who work in the business world need to know how spot prices and market prices affect each other so they can buy fuel and keep costs down.

Renewable Fuel Production: A Growing Imperative

As the aircraft business moves towards sustainability, making energy from green sources becomes more important. With the goal of meeting environmental goals and lowering carbon pollution, the demand for green fuels keeps going up. This rise not only backs up the use of sustainable flight fuel but also shows that the industry is serious about making the future better.

Taking Flight Towards Sustainability

To include sustainable flight fuel in the aviation environment is not just a trend; it’s a must. As airlines work to meet their carbon reduction goals and join programs like the Carbon Offsetting and Reduction Scheme for International Flight (CORSIA), sustainable flight fuel plays a bigger and bigger part.

Jet Fuel Market Volatility

Throughout 2023, the US jet fuel market was very unstable. This was especially clear in the New York market, which had to deal with supply problems regularly.

From the middle of January to the middle of February, jet fuel in the New York Harbor market was more than $2 more expensive than the front-month NYMEX ULSD contract.

Spot market prices rose above $5 per gallon for seven days in a row. On January 26, they hit a high of $5.6465 per gallon, which was the highest price ever seen in any US market in 2023.

As prices went up in New York, stocks went down, falling below 8,000 bbl, a level that has only been seen 15 times since the beginning of 2019. Early 2023 prices were similar to those in 2022 and followed the same pattern. In the New York area, jet fuel costs went over $7 per gallon, which was a US record.

Price rises were most noticeable in New York Harbor, but they were also noticeable in other areas. Early in 2023, jet fuel prices in the Midwest stayed between $0.90 and $1 over futures. This meant that the spot price was more than $4 per gallon for almost two weeks in January. Also, jet fuel rates to the NYMEX in Los Angeles went up more than 50 cents several times, and in mid-September, spot prices hit over $4 per gallon.

Even with these changes, the markets finally steadied, and prices started to move in more regular ways. From January to mid-December, the average price of OPIS jet fuel on the open market in the five biggest jet fuel markets (New York, Gulf Coast, Group 3, Chicago, and Los Angeles) was $2.8277 per gallon.

Looking ahead, the demand for jet fuel around the world is expected to be high in 2024, with figures running from 6.46 million gallons per day to 7.19 million gallons per day. Similarly, the use of sustainable aircraft fuel (SAF) is growing quickly. This is because planes are trying to meet their carbon-reduction goals.

The amount of SAF produced rose to 600 million liters in 2023, almost doubling from the previous year. It made up 3% of all green fuel production. It is expected to rise even more, reaching almost 1.9 billion liters in 2024. This will meet about 0.53% of the total demand in the airline business. However, moving toward SAF is likely to come with extra costs. According to IATA, the flight industry will spend $2.4 billion more on fuel this coming year.

Conclusion: 

The two stories of jet fuel recovery and the rise of sustainable aircraft fuel are at the center of our plans for the aviation industry in 2024 and beyond. Stakeholders in the aviation industry can fly with confidence knowing that they’re not only meeting the needs of today but also protecting the future of aviation for future generations by being open to new ideas, investing in renewable technologies, and putting sustainability first.