NLR Study Evaluates Five Emerging Aviation Fuels to Ease Jet Fuel Supply Crunch

A new study from the National Laboratory of the Rockies (NLR), funded by NASA, has assessed the production potential of five emerging aviation fuels as the industry faces tightening jet fuel supplies and a projected surge in demand. The fuels under the microscope are sustainable aviation fuel (SAF), liquid hydrogen, liquefied natural gas (LNG), liquefied ethane, and an early-stage research fuel called Jet X.

The research comes at a moment when global jet fuel consumption is set to climb from just over 100 billion gallons in 2025 to 165 billion gallons by 2050. Kristi Moriarty, the senior analyst who led the work, said the fuels share one key advantage: they can be produced domestically from feedstocks and electricity rather than imported oil, potentially shielding airlines and passengers from the cost shocks of volatile supply chains.

Among the five, SAF is already commercially available as a drop-in replacement for up to 50% of traditional Jet A in existing aircraft. Yet it represents only 1% of global jet fuel use, hampered by a price that rarely dips below $6 a gallon and a limited biorefining base. With conventional Jet A now trading above $4 a gallon, the price gap is narrowing, and NLR calculates that enough feedstock exists to produce 132 billion gallons of SAF per year—80% of the 2050 demand.

Cryogenic fuels such as liquid hydrogen and LNG will require new aircraft designs and airport infrastructure, while Jet X remains a lab-scale exploration of next-generation hydrocarbon chemistries. The study underscores that large-scale adoption will depend on coordinated investment from fuel producers, governments, and regulators.

Why the Future of Aviation Fuel Hinges on Infrastructure and Policy

SAF’s Price and Scale Dilemma

SAF is the most mature option, but its commercial viability is pinned on a fragile economic equation. Production costs remain high because biorefineries are few and capital-intensive. NLR notes that achieving price parity with Jet A would require cheaper feedstocks, lower plant operating costs, and a faster build-out of new production capacity—factors that are all sensitive to government policy and oil-market swings. The Massachusetts Port Authority’s separate NLR-funded study found New England alone could produce up to 850 million gallons of gasoline-equivalent SAF per year from local feedstocks, hinting at a regional model that could be replicated.

Cryogenic Fuels: The Long Game

Liquid hydrogen, LNG, and liquefied ethane are not drop-in solutions. Airlines would need entirely new propulsion systems, and airports would have to install insulated storage and dispensing infrastructure. International safety standards are still to be written. The FAA is already working with NLR to prepare for hydrogen demand, and several companies are developing hydrogen-powered aircraft for regional routes, but these fuels are decades away from widespread use. Their appeal lies in energy security: LNG can be sourced from abundant domestic natural gas and biomethane, while hydrogen carries the added benefit of zero emissions at the point of use.

Jet X and the Unknown Frontier

Jet X covers a family of liquid hydrocarbons still in early research, with potential to improve fuel economy, eliminate toxic aromatics, and reduce contrail formation. The long-term compatibility with existing aircraft and airport equipment is unproven, making it the most speculative of the five. For now, it serves mainly as a hedge against uncertainty about which fuel chemistry will eventually deliver the best trade-off between performance, cost, and environmental impact.

Who Gains — and Who Faces Pressure

Domestic biofuel producers and firms with early-stage SAF technologies stand to benefit if policy mandates or carbon pricing tighten. Traditional jet fuel refineries, by contrast, could see their margins squeezed if substitute fuels capture even a fraction of the future market. Airports and airlines are caught in the middle: they need to plan for fuel flexibility without betting heavily on one technology too soon.

What the Rise of Alternative Jet Fuels Means for Industry and Regulators

  • Airlines and operators: The narrowing price gap between SAF and Jet A (now around $4/gallon vs. $6+/gallon for SAF) suggests it may be time to test longer-term offtake agreements. However, any contract should include provisions for cost reductions as refining scales, given that NLR sees a path to meeting 80% of 2050 demand with existing feedstocks.
  • Investors in biorefining: Regional feedstock assessments—such as the New England study showing 850 million gallons potential—indicate that location-specific projects could be viable. The key variable remains government support, because plant construction costs are the main barrier.
  • Regulators and policymakers: The FAA’s collaboration with NLR on hydrogen infrastructure signals that safety standards for cryogenic fuels are advancing. Without internationally harmonized rules, airlines will struggle to adopt LNG or hydrogen across borders. The report makes clear that decisions at government level will directly shape whether fuel producers build new plants or invest in next-generation pathways.
  • Fuel suppliers: For those currently reliant on petroleum-based Jet A, the window to diversify into SAF or cryogenic fuel production is open but finite. The study’s projection that up to 132 billion gallons of annual demand could shift to alternative fuels by 2050 underscores the strategic risk of staying tied to a single feedstock.

Risk & Opportunity Assessment

Commercial RiskMediumSAF remains significantly more expensive than conventional jet fuel despite a narrowing price gap; scaling production requires billions in new biorefineries and refinery conversions, with uncertain returns until government mandates or carbon pricing improve the economics.
Competitive RiskMediumTraditional jet fuel suppliers could lose market share if alternative fuels achieve substantial scale—NLR’s finding that enough feedstock exists to produce 80% of 2050 demand suggests the incumbents face a long-term demand shift.
Regulatory RiskHighCryogenic fuels depend on yet-to-be-written international safety standards and certification for new aircraft; government decisions on mandates, subsidies, and infrastructure funding will directly determine whether fuel producers invest in SAF plants or hydrogen supply chains.
Reputation RiskLowWhile some feedstocks for SAF (fats, oils) raise sustainability questions, the report focuses on domestic energy security and supply chain resilience, reducing immediate reputational pressure for early movers.
Technology DisruptionHighHydrogen, LNG, and ethane require entirely new propulsion systems and aircraft designs, while Jet X research targets next-generation liquid hydrocarbons; these technologies could obsolesce existing fleets and fueling infrastructure over a 20–30 year horizon.
Commercial OpportunityHighA significant domestic fuel market of up to 132 billion gallons per year is addressable if costs fall; regional feedstock studies (e.g., 850 million gallons in New England) demonstrate near-term opportunities for biorefineries and supply chain partners.