Compliance, SAF hype versus reality and what lies ahead

Milica Folić, director for clean fuels and chemicals at Topsoe, takes a closer look at the biofuels market, which, at its core, is a compliance-driven landscape. Regulations, whether in the form of greenhouse gas (GHG) reduction targets, blending mandates or tax incentives, are the primary force shaping both demand and supply. While the specifics vary by region and fuel segment, nearly every major market now has ongoing initiatives to decarbonise transport fuels. Road fuel applications pioneered biofuel adoption, but aviation and marine sectors have rapidly caught up, with robust regulatory frameworks or proposals now in place. Yet, predictability and certainty remain elusive. Only recently, for example, the International Maritime Organisation’s (IMO) net-zero framework suffered a setback, highlighting the volatility and political complexity that still characterizes the global regulatory environment. At a high level, regulatory approaches can be grouped into three categories. In Europe, the “stick” approach dominates, with strict blending mandates and penalties for non-compliance. The US, by contrast, leans...