Military Jet Fuel Market Size & Share Analysis - Growth Trends and Forecasts (2023 - 2028)

Military Jet Fuel Market Size & Share Analysis - Growth Trends and Forecasts (2023 - 2028)

The global military jet fuel market is expected to register a CAGR of over 3% during the forecast period.

The outbreak of COVID-19 had a negative effect on the market. Currently, the market has rebounded to pre-pandemic levels.

Key Highlights

• Factors such as the growing expenditure in the defense sector as the security threats intensified, requiring governments around the world to continue increasing their defense budgets, in turn, are expected to drive the military jet fuel market. Moreover, countries such as China, the United States, India, and other countries increasing the fleet of their air force planes are further expected to promulgate the market during the forecast period.
• However, the high costs associated with jet fuel and renewable fuel are expected to hinder the growth of the military jet fuel market.
• Moreover, the military sector seeks to improve the environmental performance of its aircraft fleets and reduce environmental emissions. Biofuels are considered a way to maintain secure sources of fuel and reduce cost volatility, creating several opportunities for market study.
• North America is expected to be the largest and fastest-growing region during the forecast period, bolstered by the highest defense sector budget and the largest fleet of air force and navy planes, mainly in the United States.

Military Jet Fuel Market Trends

Renewable Aviation Fuel to be the Fastest Growing Market

• According to IATA, the global airline industry’s fuel bill is estimated to reach a total of USD 192 billion in 2022 (accounting for around 24% of operating expenses at an average price of USD 101.2 per barrel Brent), an increase of 28% over the USD 103 billion fuel bill for 2021, which accounted for 19% of operating expenses at USD 70.7 per barrel Brent.
• Due to the impact of the Russia-Ukraine conflict, which started in February 2022, international oil prices spiked significantly, which is expected to translate into higher jet fuel prices.
• The defense sector consumes a large amount of aviation fuel. For instance, on average, the United States military burns about 4.8 billion gallons of jet fuel and diesel each year. Nearly half of that goes to the Air Force, and around one-third goes to the Navy.
• In Asia-Pacific, higher defense spending by major regional powers such as India, China, and Japan will likely contribute to the increase in defense aircraft and the total flying time. Therefore, with an increase in aircraft and more stringent carbon emission rules in hindsight, the demand for renewable aviation fuel is expected to increase in upcoming years.
• Hence, such increasing development in the aviation fuel sector and the need to cut carbon emissions are expected to drive the renewable aviation fuel market in the defense sector during the forecast period.

North America to Dominate the Market

• North America has emerged as one of the largest military jet fuel markets in recent years, with a rise in energy demand from the Air Force and Navy, which in turn increased the demand for cable accessories in this region.
• The BioEnergy Technologies Office (BETO) of the United States and the Department of Energy (DOE), supported by Energy Efficiency and Renewable Energy (EEREnd), are making efforts to expand the adoption of sustainable, domestically produced alternative fuels for transportation and aviation to stimulate the growth of the renewable fuel industry.
• In North America, the primary policy incentive for renewable aviation fuel production is the United States Renewable Fuel Standard (RFS), which provides credits to refiners and importers of fuel who blend renewable fuel into transportation fuel to meet Renewable Volume Obligation standards.
• In the United States, the demand for jet fuel has increased at a steady pace, and the fleet is expanding exponentially with an increase in the defense budget. As of 2022, the United States had the highest defense budget of over USD 773 billion, which in turn aided market growth.
• As part of the United States Air Force’s goal of achieving half of its domestic fuel needs from alternative sources, the military and commercial airlines tested alcohol-to-jet (ATJ) fuel on A-10 ground attack aircraft.
• Under the Defense Protection Act 2014, the United States Department of Energy (DOE) co-funded the construction of three integrated biorefineries with the capacity to produce hydrocarbon fuels that meet military specifications for JP-5 (jet fuel used primarily by the US Navy), JP-8 (jet fuel used mostly by the US Air Force), or F-76 (diesel).
• Further, companies, such as Honeywell, Shell, and Chevron, use air turbine fuel and renewable jet fuel to fuel the United States Navy and Air Force as part of a joint program for the US Defense Energy Support Center (DESC) for alternative fuel testing and certification.

Therefore, owing to the above factors, North America, and in particular the United States, is expected to be the largest market during the forecast period.

Military Jet Fuel Industry Overview

The military jet fuel market is moderately consolidated. Some of the key players (in no particular order) are Shell PLC, BP PLC, Honeywell International Inc., Repsol SA, and GS Caltex Corporation.

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