Vietnam's SAF Ambitions: 1M Barrels Daily Potential Faces Economic Hurdles

Vietnam has the potential to produce approximately 1 million barrels of sustainable aviation fuel (SAF) daily between 2030 and 2050 by leveraging its vast agricultural waste from rice and cassava.

This assessment was delivered by Sharmine Tan, Boeing’s Southeast Asia Sustainability Lead, at the international workshop "Sustainable Aviation Fuel (SAF): Policy Framework and Market Development in ASEAN" held on June 25, as reported by the Government News.

Speaking at the event, Deputy Minister of Construction Le Anh Tuan noted that the green transition in the aviation sector is increasingly urgent. This aligns with Vietnam's national commitment to achieve net-zero emissions by 2050 and its official participation in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) beginning in 2026.

The scale of the challenge is significant. Vietnam's aviation industry maintains one of the fastest growth rates in Asia, with current consumption of traditional Jet A-1 fuel at 2.8 to 3 million tons annually, according to Nguyen Thi Phuong Hien, Deputy Director of the Ministry of Construction's Institute of Strategy and Development. Air transport demand is forecasted to drive fuel consumption to 4 million tons by 2030 and 11 million tons by 2050.

"The biggest barrier to the development of SAF in Vietnam remains the economic challenge, as SAF production requires massive capital investment and cutting-edge technology," Ms. Hien remarked.

Currently, the production cost of SAF is two to five times higher than conventional Jet A-1 fuel. Investors also face hurdles including the lack of a formal SAF adoption roadmap, inadequate support mechanisms, difficulties in mobilizing sustainable raw materials, and challenges in meeting international traceability and certification standards.

This reflects a global trend, according to Philip Goh, CEO of the Asia-Pacific Sustainable Aviation Centre (APSAC). He noted that SAF is projected to account for less than 1% of total global aviation fuel consumption by 2025, primarily due to its high cost and concentrated production in a few countries. Market instability and uncertain demand make investors hesitant to fund production without guaranteed long-term off-take agreements.

To advance, Ms. Hien suggested Vietnam must establish a national roadmap tailored to its conditions. This would involve refining policies to support the SAF ecosystem, ensuring sustainable feedstock supplies, selecting appropriate technologies, and developing robust supply chains. She also emphasized mobilizing investment, creating risk-sharing mechanisms, and expanding international cooperation for technology transfer and human resource development.

Echoing this, Subash S, Deputy Regional Director for Asia-Pacific at the International Civil Aviation Organization (ICAO), stated that each nation must build a roadmap aligned with its specific reality, based on its feedstock potential, energy sources, and market demand.

He stressed that SAF development requires a coordinated policy framework involving transport, energy, environment, finance, and industry ministries. "SAF must be integrated into existing national policies, with the Government playing a leading role by committing to SAF usage in state-managed activities," said Mr. Subash S.

Mr. Goh added that Vietnam possesses immense potential for feedstock from agricultural by-products like rice straw, husks, and bagasse. He affirmed that APSAC is prepared to support research on materials and policies for Vietnam, provide training for government officials, and connect the country with ICAO and the global aviation industry.