The aviation industry has spent years making the case that sustainable fuel is the path to decarbonization. In early March, a global energy shock made that case in a way no industry conference ever could, and simultaneously exposed how fragile the supply chain behind that fuel actually is.
SAF prices in California hit an all-time high of $8.85 per gallon in the week ended March 4, a surge of more than $1.32 in a single week, according to S&P Global Platts.
The price spike pulled back the curtain on something the industry had been managing around for years: Sustainable aviation fuel runs on a feedstock base so narrow and so concentrated that any major disruption to energy markets exposes its limits almost immediately.
The feedstock problem the crisis did not create but made impossible to ignore
The dominant form of SAF in production today is Hydroprocessed Esters and Fatty Acids (HEFA) fuel derived from used cooking oil, animal fats, and vegetable oils. These feedstocks are priced by agricultural commodity markets, not crude oil.
That is why the Hormuz shock did not immediately close the price gap between SAF and conventional jet fuel.
But it did something more structurally damaging. It forced the aviation industry to confront how little room it has to maneuver when multiple pressures converge.
International Air Transport Association (IATA) expects 2.4 million metric tons of SAF to be available in 2026, covering just 0.8% of total aviation fuel consumption, according to Reuters. That is less than one percent of global demand.
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The feedstock base supporting that supply is concentrated in a way that amplifies every disruption. European Union data showed that roughly 81% of SAF feedstock inputs in 2024 came from used cooking oil, with most of the remainder from animal fats.
Both are finite, competed over by the marine and road transport sectors under their own decarbonization mandates, and impossible to scale quickly.
The supply squeeze is now structural rather than cyclical. Key Asian used cooking oil-producing nations are increasingly restricting exports as governments prioritize domestic SAF production, according to S&P Global. Thailand, Indonesia, and Malaysia are all moving from feedstock exporters to SAF producers.
At the same time, Europe’s ReFuelEU mandate has been escalating blend requirements since 2025, creating a bidding war for the same shrinking pool of waste oils across aviation, marine, and road transport simultaneously.
Feedstock search reached crops nobody seriously considered 2 years ago
The aviation industry’s feedstock diversification effort has been underway for years. Camelina, jatropha, algae, and municipal solid waste have all attracted serious capital at different points. What they share is a history of clearing early-stage trials and then stalling before reaching commercial supply chains at the volumes airlines actually need.
Castor oil has historically sat outside that conversation. The crop is labor-intensive to harvest because the seed pods ripen unevenly and require multiple passes, which has kept it in the specialty industrial rather than commodity feedstock category.
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That assessment may be changing. Casterra, a subsidiary of Evogene, revealed in March that it had completed commercial field trials across 74 hectares in Bahia, Brazil, using seed varieties engineered to ripen uniformly and enable single-pass mechanical harvesting.
The trials covered 64 rainfed hectares and 10 irrigated hectares on just 382 millimeters of rainfall.
The significance of the trials is not simply that castor can be grown at scale. It is what castor avoids.
Unlike corn ethanol or palm oil, castor is not a food crop. It is toxic to humans and animals, which eliminates the food-versus-fuel political dynamic and any competition with the grocery supply chain.
Castor also grows in semi-arid conditions where food production is not viable, so expanding castor cultivation does not require converting premium agricultural land.
“Brazil is uniquely positioned to become a global leader in sustainable castor farming, building on its long-standing agricultural expertise, strong infrastructure, and vast available farmland,” Casterra CEO Ofer Haviv told TheStreet.
“We have demonstrated that castor can be cultivated profitably even under low rainfall conditions, while significantly reducing production costs and strengthening castor oil’s potential as a competitive biofuel feedstock.”
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What castor oil would need to actually matter at scale
Proving economic viability on 74 hectares is meaningfully different from proving it at the volumes SAF refiners need. The industry has watched promising feedstocks stall at exactly that transition before.
In that environment, a crop that sidesteps the food debate and grows on marginal land commands attention it would not have warranted two years ago. Whether that attention translates into commercial supply chains depends on factors that a single trial in Bahia cannot yet answer.
Consistent multi-country supply would need to be demonstrated to attract binding offtake commitments. Castor oil would need formal approval as an eligible feedstock under the EU’s ReFuelEU framework and the U.S. Sustainable Aviation Fuel Grand Challenge parameters.
Processing and logistics infrastructure capable of moving castor oil from semi-arid growing regions into certified SAF refining pathways would need to be built. And the price would need to compete with used cooking oil-based SAF pathways that benefit from decades of established processing infrastructure.
None of those hurdles are insurmountable. None of them are cleared yet, either.
What the Hormuz crisis changed about the urgency of this conversation
The energy security argument for SAF was, until recently, a long-range policy argument. The Hormuz crisis converted it into a live operational problem.
Airlines are not in a position to sign large new long-term SAF supply agreements in the middle of an acute fuel cost shock, but the political and strategic case for feedstock diversification has become viscerally real in a way that years of industry lobbying never quite achieved, according to Thrust Carbon.
Global SAF production is on track to reach just 2.4 million tonnes in 2026 against a long-term requirement of 500 million tonnes annually by 2050, according to IATA. That gap is so large that every viable feedstock pathway, including ones that looked marginal a few years ago, is now being reevaluated.
Castor oil cleared one significant commercial hurdle in March. Whether the investment and policy frameworks arrive quickly enough for it to clear the rest depends on whether the aviation industry treats the Hormuz crisis as a temporary disruption or a permanent signal about the cost of supply chain concentration.
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