The central fact of the sustainable aviation fuel story is now volatility itself. S&P Global reports that SAF prices have become unstable enough to highlight the industry's core scaling problem: refiners cannot yet produce the fuel at volumes or price points that airlines can absorb.

That is not a marginal concern. Fuel is the largest single operating cost for most carriers, and SAF currently trades at a persistent premium to conventional jet fuel. When that premium swings rather than declines, airline procurement teams face a planning problem that hedging strategies built for petroleum were never designed to solve.

What is driving the price swings?

SAF supply remains concentrated among a small number of producers using limited feedstock streams. That thin market structure magnifies every disruption, from feedstock availability to refinery outages. A market with few sellers and lumpy output produces exactly the volatility S&P Global describes.

Demand, by contrast, is being engineered upward by regulation. Mandates in the European Union and the United Kingdom require rising SAF blends in airline fuel uplifts over the coming decade. Singapore and other jurisdictions are moving in the same direction. Regulators have, in effect, scheduled demand growth on a timeline that production investment has not yet matched.

The result is a familiar mismatch. Carriers must buy increasing volumes of a fuel whose price moves unpredictably and whose supply base remains narrow. Volatility is the market's way of reporting that gap.

Who carries the cost?

Airlines do, initially. SAF's green premium flows into operating costs at a time when carrier margins remain thin and aircraft delivery delays are already constraining capacity growth. Carriers have responded with offtake agreements and equity stakes in producers, effectively paying upfront to secure future supply rather than betting on spot markets.

The passenger eventually carries part of the burden. Some carriers already itemize sustainability surcharges on tickets, a pricing mechanism that converts fuel policy into a per-passenger cost. The size of that cost depends directly on where SAF prices settle — and on that question, the market currently offers no settled answer.

Can supply scale faster than the mandates require?

S&P Global's framing — scaling challenges highlighted by volatile prices — suggests caution. New SAF pathways, including alcohol-to-jet and power-to-liquids, remain at earlier stages of industrialisation than the hydroprocessed esters and fatty acids that dominate today's output. Each new facility takes years and significant capital to build, and final investment decisions depend on assumptions about feedstock, policy support and offtake pricing that volatility itself makes harder to underwrite.

There is an irony worth noting. Price volatility deters the very investment that would dampen price volatility. Producers want stable, bankable demand signals; airlines want stable prices before committing to long-term purchases. Regulators are attempting to break that loop with mandates, but mandates fix quantity, not cost.

What comes next?

The trajectory of SAF prices over the next several years will determine whether decarbonisation targets for aviation remain an economic proposition or become a cost problem distributed across tickets and taxpayers. S&P Global's reporting points to a market still too small to be stable and too important, politically, to be ignored. Until production capacity catches up with mandated demand, volatility is the price of the transition.