The aviation sector has charted a course to decarbonize itself – and investors see opportunity. According to BNEF, startups with a focus on low-carbon aviation technology raised $4.6 billion in 2022, and another $1.21 billion was added to that tally in the first half of 2023.

Among venture capital and private equity investments, sustainable aviation fuel (SAF) startups have drawn the most attention. Power-to-Liquid technologies, which combine green hydrogen with CO2 to create synthetic kerosene, have received $592 million in funding since 2021, according to BNEF – 72% of all SAF investment and 40% of the aviation total.

It’s a step in the right direction when private markets recognize the profit potential of an innovation that could reduce CO2 emissions. But technological diversification will be necessary for the aviation sector to have any chance of achieving carbon neutrality in the coming decades.

Projections show that SAF investments are beginning to make a difference on the supply side. In 2022, according to BNEF’s Global Renewable Fuel Projects Tracker, jet fuel represented just over 8% of renewable fuel production capacity. By 2030, that number is projected to reach nearly 32% – a capacity of 6.46 billion gallons.

This shows that investment can move the sustainability needle. However, for alternative fuels to become an even larger part of the jet fuel mix will require supporting the next iteration of technologies beyond biogenic SAF.

In the Sun-to-Liquid process, a mirror field concentrates sunlight at the top of a tower, where it is converted into high-temperature process heat that turns a carbon and a water source into synthesis gas. Liquefy that syngas and you have carbon-neutral kerosene made from concentrated sunlight.

With the right support, this nascent technology could be an economically and ecologically viable substitute for fossil fuels.

In the first half of 2023, global new investment in renewable energy reached $358 billion, a new high for any six-month period according to BNEF. Solar accounted for 43% of those investments. This is a good sign for the clean energy market broadly, but within the aviation industry, solar remains overlooked and underfunded.

Early-stage investments are crucial to driving down the price of SAFs and increasing their adoption. With venture capital and private equity focused on biogenic fuels, other players will need to step up.

Lufthansa Group has shown this commitment through its strategic collaboration with Synhelion, a producer of solar aviation fuel. As the Zurich-based startup scales production, with construction on an industrial plant in Germany underway, it can do so with the confidence that Swiss International Air Lines (SWISS) has committed to become the first commercial airline in the world to fly on solar fuel when it is available.

This partnership can inspire a chain reaction of support and excitement, helping to inform and inspire the industry as a whole. On the heels of a successful CHF 22 million ($24.86 million) funding round in 2022, Synhelion is looking to raise nine figures in 2024 – crucial funding that will help the company scale beyond Europe to become a global player in the SAF market.