Sustainable aviation fuel (SAF) is pivotal for decarbonizing civil aviation. Carbon markets can incentivize SAF adoption and reduce costs. They play a pivotal role in attaining carbon neutrality within China’s aviation sector. This study forecasts China’s SAF demand (2025–2050) using a GA-BP neural network model, develops a CO2 emission and cost model that integrates SAF and carbon market mechanisms, and analyzes emission trends and cost changes under varying scenarios. Results show: SAF adoption could reduce cumulative CO2 emissions by 1.589 billion tons by 2050. Optimized carbon market mechanisms effectively reduce SAF decarbonization costs. Specifically, via SAF multiplier rules, airlines use carbon credit revenues to offset 36.7% of their SAF costs. Policy recommendations include establishing a supportive system for the entire SAF industry chain, exploring the linkage mechanism between SAF applications and the carbon market, and strengthening the connection between international and domestic policies.