SAF and maritime mandates intensify competition for biomass feedstocks

The International Maritime Organization on April 11, 2025 approved net-zero shipping rules after setting a 20-30% emissions cut target for 2030. That adds maritime demand to a SAF market already competing for the same used cooking oil, animal fats and vegetable oils. The result is a tighter bid stack for HVO, renewable diesel and the next wave of low-carbon fuels.

The same molecules are doing more jobs

An IATA and Worley Consulting analysis projects unconstrained biomass feedstock availability above 12,000 Mt by 2050, but only a limited share can realistically be harnessed for SAF. Biomass feedstocks are the key resource for SAF through 2050, which leaves a finite pool of lipids and residues to serve aviation, shipping and road fuels at the same time.

Current SAF production relies heavily on the same feedstocks used for hydrotreated vegetable oil and renewable diesel. That overlap is the core commercial issue, because it turns used cooking oil, tallow and vegetable oils into contested industrial inputs rather than simple waste streams. Once aviation and maritime buyers enter the same procurement market, the question becomes not whether demand rises, but which sector gets the allocation.

SAF is already setting the pace

Only a few years earlier there had been no mandates, and the market moved quickly from voluntary blending to compliance demand. The U.S. Energy Information Administration expected domestic sustainable aviation fuel capacity to rise fourteen-fold in 2024, and oil majors were betting on more than 40 biofuels projects by 2030.

That buildout reflects the way SAF anchors pricing. Airlines need drop-in jet-fuel compatibility, and SAF produced from waste and residue such as used cooking oil or organic crops emits the same amount of CO2 when burned as kerosene. That keeps the carbon case tied to upstream feedstock sourcing, process emissions and certification rather than anything that happens at the nozzle.

Shipping adds a second buyer

The International Maritime Organization’s 2023 GHG Strategy also targets a 70-80% cut in shipping emissions by 2040 and net-zero by or around 2050, with enforceable rules now behind that timeline. Shipping biofuels are still smaller than SAF today, but they are now another compliance market pulling on the same biomass base.

Maritime demand does not arrive in a vacuum. When ship operators, airlines and road-fuel producers all reach for the same lipid feedstocks, the advantaged players are those with secure sourcing, integrated logistics and strong offtake relationships. Smaller developers and late entrants face a thinner spread between feedstock cost and finished-fuel value, especially when procurement turns to imported material.

The squeeze lands first on road fuels and any other lipid user

The first pressure point is already visible in road fuels. In 2022, biodiesel, renewable diesel and SAF producers were facing feedstock shortages, and the same constraint still applies because SAF production and HVO production are built on overlapping inputs. As SAF and shipping mandates grow, those road-fuel plants are likely to feel the earliest repricing in used cooking oil, tallow and vegetable-oil contracts.

That pressure extends to any biochemical user that depends on the same lipid streams. Once a buyer can justify compliance premium under a mandate, the market stops clearing on simple waste value and starts clearing on carbon value, traceability and contract length.

Imports, traceability and fraud risk are rising together

A June 2024 Transport & Environment briefing put European countries' used cooking oil consumption for biofuels at close to seven million tonnes in 2023 and showed heavy reliance on imports from Asian countries. Europe cannot satisfy that level of demand from domestic collection alone. Growing use of animal fats and used cooking oil for transport fuels also raises climate-impact concerns and fraud risk.

Soaring demand for used cooking oil in SAF had led to distorted data and suspected fraud, turning a feedstock boom into a chain-of-custody problem. By March 2025, Asia’s green jet fuel ambitions exceeded domestic demand, pointing toward exports and a wider trading market for the same materials.

What project developers and buyers watch next

Project developers and buyers are diversifying feedstocks, locking in offtake early, and investing in collection, pretreatment and verification systems before mandates tighten further. As demand from SAF and shipping rises, agricultural and waste-derived feedstocks become more strategically important, which raises the value of traceable supply chains and international trading networks that can move verified material across regions.