Taiwan should develop domestic sustainable aviation fuel (SAF) production and position itself as a regional supply hub, offering the conversion of alcohols to jet fuels as a potential way around the island’s limited feedstock resources, a new policy paper said.
Alcohol-to-jet technology (ATJ) is a certified low carbon aviation fuel that transforms alcohols such as ethanol or isobutanol into synthetic jet fuel compatible with existing aircraft.
SAF is expected to accelerate as the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation, known as CORSIA, enters its second mandatory phase in 2027.
The Chung-Hua Institution for Economic Research, a Taipei-based think tank, has laid out a 10-year policy roadmap for Taiwan’s SAF industry, assessing different technologies for making low‑carbon jet fuel, including ATJ, hydroprocessed esters and fatty acids (HEFA), and Fischer-Tropsch (FT) processes.
The paper said Taiwan should evaulate technologies not only on their technical and cost feasibility, but on whether they could form scalable and governable supply chains suited to the island’s resources and regulatory environment.
Chen Chung-shun, an associate research fellow at the institution’s Center for Energy and Environmental Research and project leader, said in the report that 2035 should serve as a key policy review point as global supplies of oils and fats used in first-generation HEFA production approach their limits.
Taiwan would by then need to recalibrate the balance between imported feedstocks and domestic production capacity, he said.
While FT technology offers strong potential for negative carbon emissions, Taiwan’s limited biomass resources and the high cost of collecting material from mountainous forests constrain its prospects, Chen said.
ATJ, which converts alcohol such as ethanol into jet fuel, should therefore be a major part of Taiwan’s medium- to long-term strategy, he added.
With an effective feedstock import regime, Taiwan could become a regional centre for importing, converting and distributing bioethanol, helping address its shortage of domestic oils and fats, Chen said.
Concerns over the carbon footprint of ATJ have eased following recent improvements, while the United States, Britain and Japan increasingly view the technology as important to aviation fuel transition and domestic industrial development, according to the paper.
Aviation fuel demand could reach 4.9 million tonnes
Taiwan’s aviation fuel demand was about 3.28 million tonnes in 2025, according to the paper.
Under a conservative scenario in which aviation market growth stagnates, demand would remain at that level in both 2030 and 2035.
A baseline scenario assuming historical annual growth of about 2 per cent would see demand rise to around 3.63 million tonnes in 2030 and 4 million tonnes in 2035.
Under a more optimistic scenario, in which Taiwan strengthens its role as an aviation transit hub and demand grows by about 4 per cent annually, fuel consumption could reach around 4.01 million tonnes in 2030 and 4.9 million tonnes by 2035.
Decarbonising aviation is widely considered one of the most difficult parts of the global net-zero transition.
Liu Che-liang, director of the institution’s Center for Energy and Environmental Research, said in the study that Taiwan should move beyond treating SAF development as a compliance exercise aimed at meeting international carbon rules.
Instead, it should view the sector as an industrial strategy, with the goal of establishing domestic manufacturing capacity and becoming a regional supply hub, Liu said.
The US, Britain and Singapore have used policy tools to support SAF supply chains, while the US has accumulated experience in ATJ technology and integrating supply and demand, Lu said.
The US industry also hopes to help Taiwan introduce bioethanol feedstocks that meet international sustainability and carbon certification standards, including those recognised under CORSIA and the International Sustainability and Carbon Certification system, he added.
The high cost of SAF compared with conventional jet fuel remains a major obstacle to scaling production.
Chen said policy tools would be needed to create certainty for demand, with Taiwan focusing on establishing a regulatory foundation in the short term and introducing policy incentives over the medium term.
Such an approach could help Taiwan emerge as a green aviation transit and SAF supply hub in the Asia Pacific region, he added.
