The International Air Transport Association (IATA) today announced that Sustainable Aviation Fuel (SAF) production is expected to reach 2 million tonnes (2.5 billion liters) in 2025, representing approximately 0.7% of airlines’ total fuel consumption.
While this doubling of production is an encouraging step, IATA highlighted significant concerns regarding the impact of current policy approaches, particularly mandates, on the cost and scalability of SAF.
“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,” said Willie Walsh, IATA’s Director General. “And even that relatively small amount will add $4.4 billion globally to the fuel bill. The pace of progress in ramping up production and gaining efficiencies to reduce costs must accelerate.”
The Problem with Mandates: Europe’s Costly Lesson
IATA strongly criticized the implementation of mandates, particularly in Europe, where the EU and UK mandates came into effect on January 1, 2025. According to IATA, the cost of SAF to airlines in Europe has doubled due to compliance fees charged by SAF producers or suppliers.
For the estimated one million tonnes of SAF expected to be purchased to meet European mandates in 2025, the cost is projected to be $1.2 billion, with an additional $1.7 billion in compliance fees. This extra cost, IATA noted, could have abated an additional 3.5 million tonnes of carbon emissions.
“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,” stated Walsh. “Raising the cost of the energy transition that is already estimated to be a staggering $4.7 trillion should not be the aim or the result of decarbonization policies. Europe needs to realize that its approach is not working and find another way.”
IATA’s Role in Fostering a Global SAF Market
To support the development of a robust global SAF market, IATA is advancing two key initiatives:
SAF Registry (managed by CADO): A transparent and standardized system for tracking SAF purchases, usage, and associated emissions reductions, ensuring compliance with international regulations such as CORSIA and the EU Emissions Trading Scheme.
SAF Matchmaker: A platform designed to facilitate SAF procurement by connecting airline demand with supply offers.
Urgent Government Action Needed
IATA urged governments to prioritize three critical areas for effective policy intervention:
Creating More Effective Policies: Eliminating the disadvantages faced by renewable energy producers compared to fossil fuel industries is essential to scale up renewable energy and SAF production. This includes redirecting a portion of the $1 trillion in global fossil fuel subsidies.
Developing a Comprehensive Energy Policy: A holistic approach is required that supports increased renewable energy production (from which SAF is derived) and ensures SAF receives an appropriate allocation of this production. Policies should encourage joint infrastructure use, co-production, and other measures benefiting the energy transition across all sectors.
Ensuring the Success of CORSIA: Governments must make Eligible Emissions Units (EEUs) available to airlines, recognizing CORSIA as the sole market-based mechanism for addressing international aviation’s CO2 emissions. Guyana was highlighted as the only state to date that has made carbon credits available for airlines to purchase against CORSIA obligations.
India: A Beacon of Progress
IATA commended India’s proactive stance in the biofuels sector, highlighting its launch of the Global Biofuels Alliance and its target for 2% SAF blending for international flights by 2028. India’s enabling policies, including guaranteed pricing, capital support for new projects, and technical standards, were lauded. IATA will collaborate with the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and Praj Industries Limited to guide global best practices for life cycle assessment of feedstock use in the country.
“As the third-largest global civil aviation market, India can strengthen its leadership in biofuels with the accelerated adoption of SAF through progressive policies,” Walsh concluded.
