The geopolitical landscape underwent a seismic shift in February 2026 when the United States and Israel initiated military operations against Iran, leading to an immediate and suffocating blockade of the Strait of Hormuz. As one of the world’s most vital maritime chokepoints for energy, the closure of the Strait sent shockwaves through global commodities markets. While the prices of all fossil fuels experienced significant spikes, the aviation sector was hit with disproportionate severity. Jet fuel, a specialized form of kerosene-based diesel that constitutes less than 10% of the global petroleum market, saw its price more than double in the weeks following the initial strikes. Prices surged past $200 per barrel, an escalation that far outstripped the benchmark hikes seen in Brent crude.
For the global airline industry, a sector historically vulnerable to fuel volatility, the crisis triggered an immediate contraction. Major carriers across North America, Europe, and Asia were forced to cancel thousands of flights, slash in-flight amenities, and implement aggressive fuel surcharges that threatened to make air travel a luxury once again. In response, the European Union moved to "optimize" jet fuel distribution among its member states, desperate to prevent a total collapse of regional connectivity. In theory, this moment of extreme fossil fuel fragility should have served as the ultimate catalyst for Sustainable Aviation Fuel (SAF)—the long-promised class of biofuels and synthetic additives designed to decouple aviation from its carbon-intensive roots. However, as the crisis deepened, the silence from the industry’s biggest proponents became deafening.
The Paradox of Silence in a Time of Crisis
The current energy shock has exposed a startling reality: despite years of policy stimulus and corporate commitments, SAF remains a marginal player in the global energy mix. Chris Cooper, CEO of XCF Global, a prominent producer based in Reno, Nevada, notes that the conflict in the Middle East "sharpens the market case" for domestic, waste-based SAF. According to Cooper, the war highlights the inherent fragility of global fossil crude supply chains, arguing that the world is effectively "fighting with other countries just to produce a product that brings more conflict to the global economy."
Yet, rather than doubling down on their green transition, many of the industry’s most vocal SAF advocates have retreated into the shadows. Air Canada and the Greater Toronto Airports Authority (GTAA) have remained silent regarding updated adoption timelines. Perhaps most tellingly, Delta Air Lines—once a leader in sustainability marketing—reportedly removed specific references to SAF and its net-zero goals from its sustainability reports just one month into the conflict. This retreat suggests that when the "flight-or-fight" moment arrived for the energy transition, the financial and logistical barriers to SAF remained too high to hurdle, even with oil at $200 a barrel.
A Chronology of High Hopes and Slow Progress
To understand why SAF has failed to fill the void left by the Hormuz blockade, one must look at the timeline of its development and the regulatory signals sent over the last several years.
- 2022: The U.S. Departments of Energy, Transportation, and Agriculture launched the "SAF Grand Challenge Roadmap," a federal initiative aimed at scaling SAF production to 3 billion gallons per year by 2030.
- 2023: The European Union established the ReFuelEU Aviation mandate, requiring all fuel supplied at EU airports to contain at least 2% SAF by 2025, with a target of 70% by 2050. Meanwhile, global fossil fuel subsidies reached a staggering $600 billion.
- 2024: The International Air Transport Association (IATA) issued a warning regarding "disappointingly slow growth" in SAF production. Director General Willie Walsh criticized governments for sending mixed signals by continuing to subsidize fossil fuel exploration while leaving green fuel investors to wait for "guarantees of easy money."
- 2025: The International Energy Agency (IEA) reported that while road transport had reached a 5% low-carbon fuel share, aviation remained stuck at less than 1%. The IEA noted that even in an "accelerated" growth scenario, SAF would only reach a 15% market share by 2035.
- 2026 (February–April): The Iran war began, leading to the current $200-per-barrel price point. Delta and other major carriers began walking back their public commitments as the cost of transition became untenable in a high-inflation environment.
The Technical and Chemical Hurdles of Bio-Aviation
The resistance of the aviation sector to alternative fuels is not merely a matter of economics; it is a fundamental challenge of chemistry and safety. Unlike road vehicles, which can be relatively easily adapted to run on ethanol or electricity, jet engines require a fuel that remains stable under extreme conditions.
Warren Mabee, a Canada Research Chair at Queen’s University and a leading expert in renewable energy, explains that jet fuel must maintain its integrity under immense pressure changes and temperatures that range from the scorching heat of a tarmac in Dubai to the sub-zero environment at 35,000 feet. "There is really no room for error in these fuels," Mabee notes. "If a plane experiences a loss of power in mid-air due to fuel instability, the consequences are catastrophic."
Currently, most SAF is produced from waste cooking oils (HEFA – Hydroprocessed Esters and Fatty Acids). While this method can reduce lifecycle greenhouse gas emissions by up to 80%, the global supply of used cooking oil is severely limited. Efforts to move toward "second-generation" feedstocks—such as corn husks, sawmill waste, or municipal solid waste—have hit a commercial wall. These materials are difficult to convert into liquid fuels that are chemically identical to conventional kerosene. Furthermore, fuels derived from virgin oilseeds like canola often lack the chemical density required for power-hungry jet engines, necessitating complex blending processes that further drive up costs.
The Economic Chasm: Eight Times the Cost
Before the outbreak of the Iran war, the International Council on Clean Transportation (ICCT) conducted a price analysis that highlighted the massive gap between conventional jet fuel and its sustainable alternatives. At that time, a litre of SAF cost approximately eight times more than its fossil fuel counterpart. Even with the subsidies provided by the U.S. Inflation Reduction Act (IRA) and various EU tax credits, the gap only closed by about half.
In the United States, the political landscape has further complicated the investment climate. While some SAF tax credits survived the policy shifts of the current Trump administration, the focus has largely shifted back toward traditional biodiesel for road transport. This has left SAF producers in a "valley of death," where the technology is proven but the scale required to bring prices down remains elusive.
The United Kingdom has emerged as a potential outlier in policy design. British regulators have implemented a "price floor" for SAF producers, similar to the mechanism used to successfully jumpstart the UK’s offshore wind industry. By guaranteeing a minimum price, the government provides the demand-side certainty that investors need to build multi-billion-dollar refineries. Without such guarantees in the U.S. and Canada, many projects remain stalled in the planning phase.
Regional Projects and the Global Supply Chain
Despite the overarching gloom, several large-scale projects are attempting to break through. In Nova Scotia, Nova Sustainable Fuels has proposed a $4-billion to $6-billion plant in Goldboro. The facility is designed to run on sawmill waste and forest underbrush, powered by wind and solar energy. However, even this massive project—backed by the British renewable energy giant Octopus Energy—has become shrouded in secrecy. Both Nova and Octopus declined to comment on the project’s status following the start of the Iran war, raising questions about whether the current economic volatility has cooled investor appetite for long-term green infrastructure.
In contrast, the Finnish energy giant Neste continues to lead the global market. With a production capacity of 1.5 million tons per annum, Neste remains the world’s largest producer of SAF, with plans to expand its Rotterdam facility to 2.2 million tons by 2027. Neste representatives emphasize that renewables provide a critical alternative to Middle East-dependent fossil markets, arguing that "governments should see renewables as a means to increase energy supply security."
Broader Implications and the Long Road Ahead
The current crisis has forced a reckoning within the aviation industry. For decades, the sector has relied on the promise of SAF to justify continued growth in a carbon-constrained world. However, if SAF cannot find its footing when oil is at $200 a barrel and the Middle East is in flames, its viability as a primary decarbonization tool must be questioned.
Alternative technologies, such as battery-powered or hydrogen-fueled aircraft, remain in their infancy. While companies like Harbour Air have successfully tested small "e-planes" for short-haul flights, the engineering required for a trans-Atlantic passenger jet powered by electricity is likely 20 to 30 years away. This leaves the industry in a precarious position: it is too early for electricity and seemingly too late for a smooth transition to biofuels.
The ultimate danger, according to researchers like Andy Navarrete of the ICCT, is that the environmental integrity of SAF could be sacrificed in the name of energy security. "If policymakers start to see SAF as a good on its own, without thinking about the sustainability implications—such as land use and food security—then we might be shooting ourselves in the foot," Navarrete warns.
As the blockade of the Strait of Hormuz continues and the airline industry struggles to stay airborne, the "inflection point" for sustainable aviation remains elusive. The crisis has proven that while the world is desperate to move away from fossil fuels, the path to the skies is far more complex than the path on the ground. For now, the aviation industry remains grounded by the harsh realities of chemistry, economics, and a global energy system that is still firmly tethered to the very oil fields it seeks to escape.
