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IATA expects sustainable aviation fuel production increase amid policy challenges

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IATA expects sustainable aviation fuel production increase amid policy challenges
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Tony Concil Vice President, Corporate Communications | International Air Transport Association

The International Air Transport Association (IATA) anticipates that Sustainable Aviation Fuel (SAF) production will reach 2 million tonnes, equivalent to 0.7% of total airline fuel consumption by 2025. Willie Walsh, IATA's Director General, stated, "While it is encouraging that SAF production is expected to double to 2 million tonnes in 2025, that is just 0.7% of aviation’s total fuel needs. And even that relatively small amount will add $4.4 billion globally to the fuel bill."

In Europe, the cost of SAF has doubled due to compliance fees following new mandates from the EU and UK implemented on January 1, 2025. For one million tonnes of SAF required for these mandates in 2025, market prices suggest a cost of $1.2 billion with an additional $1.7 billion from compliance fees.

"This highlights the problem with the implementation of mandates before there are sufficient market conditions and before safeguards are in place against unreasonable market practices that raise the cost of decarbonization," Walsh commented.

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To foster a global SAF market, IATA has launched two initiatives: a SAF registry managed by the Civil Aviation Decarbonization Organization (CADO) and a SAF Matchmaker for procurement facilitation.

IATA calls on governments to create more effective policies by eliminating disadvantages faced by renewable energy producers compared to big oil companies and redirecting subsidies towards renewable energy production. They also urge development of comprehensive energy policies and ensuring CORSIA's success as a mechanism for addressing CO2 emissions in international aviation.

India has taken steps with its Global Biofuels Alliance aiming for a target of 2% SAF blending for international flights by 2028 supported by enabling policies such as guaranteed pricing and capital support for new projects.

"As the third-largest global civil aviation market, India can strengthen its leadership in biofuels with the accelerated adoption of SAF through progressive policies," stated IATA.

For further information, please contact Corporate Communications at IATA.

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