Sustainable aviation fuels (SAF) have emerged as a critical solution to reduce the aviation sector’s growing carbon footprint. SAF could contribute up to 65% of the emissions reductions needed for aviation’s net-zero targets by 2050, leading to over 11 billion in funding flowing into 256 companies, according to our data.
While most solutions are still in early development, innovation is taking place across the entire value chain, from feedstocks to end products. Read about the funding trends, ecosystem players, and solutions showing promise.
SAF is showing signs of maturity
Investment in Sustainable Aviation Fuels (SAF) has entered a defining moment in 2025, with funding shifting from the early to the growth stage.
Only a limited set of companies has attracted most of the funding, which helps explain the volatility across these rounds. In contrast to previous years’ momentum, pre-seed and seed-stage activity has slowed in 2025, pointing to a maturing sector.
Debt accounted for nearly 70% of funding to date in 2025, further signalling a shift from early-stage exploration to commercialization, as seen with the Trump administration’s $1.67 billion loan guarantee for Montana Renewables to expand production to 315 million gallons annually and e-Fuels company Twelve’s $935 million debt round.
From bio-SAF to e-SAF
Investor interest remains highly segmented across SAF technologies, depending on their maturity. Many companies operate across multiple phases, with those in Production Pathway 1 (e-SAF) securing considerably more funding than Production Pathway 2 (Bio-SAF). In contrast, companies with a final Bio-SAF product have received more investment than e-SAF fuels so far. This shows proactive R&D efforts to commercialize e-SAF, while bio-SAF fuels attract funding thanks to their proven commercial viability.
U.S drives SAF innovation
Investment to date remains heavily concentrated in the U.S, thanks to strong government support and intensive R&D. A handful of companies in Turkey, Germany, the UK, and Ireland are driving up funding in Europe, with state-backed efforts to adopt sustainable aviation fuels in Hong Kong spiking funding in Asia in 2023.
VCs follow grant funding to scale solutions
Public-backed grants sparked the initial wave of innovation in 2020, with VCs following the lead in subsequent years. While VCs will continue to play a key role, involvement from airline and oil & gas companies will be crucial for sustained expansion and decarbonization efforts. Despite the sector’s growth, exits are still few and far between. Only five SAF-related acquisitions took place between 2020 and 2025, which isn’t surprising given the early stage of the sector’s development.
The 2026 Outlook
The investment landscape for SAF in 2025 reflects a market moving decisively from early innovation to scaling feasible solutions. SAF usage is still limited but growing, with production expected to double to meet the EU’s mandate of 2% fuel blend from 2025 and 70% by 2050.
The rise of debt financing shows a clear shift toward real-world commercialization, while sustained investor attention suggests confidence in the sector’s long-term potential. The sector is evolving fast.
The article above is just a snapshot.
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