The International Air Transport Association (IATA) has revised estimates for Sustainable Aviation Fuel (SAF) production, criticizing poorly designed government mandates in Europe and the UK for stalling growth, inflating prices, and forcing airlines to reconsider their decarbonization targets.
IATA’s new figures show that while SAF output is expected to double in 2025 to 1.9 million tonnes (Mt) (2.4 billion liters), this is a significant downward revision from earlier forecasts. Furthermore, growth is projected to slow substantially in 2026, reaching only 2.4 Mt.
This production level represents a mere 0.6% of total jet fuel consumption in 2025, rising to just 0.8% in 2026, falling far short of the industry’s ambitious targets.
IATA Director General Willie Walsh did not mince words, stating, “If the goal of SAF mandates was to slow progress and increase prices, policymakers knocked it out of the park. But if the objective is to increase SAF production to further the decarbonization of aviation, then they need to learn from failure and work with the airline industry to design incentives that will work.”
The analysis revealed the cumulative, negative impact of current policy frameworks:
Sky-High Prices: SAF prices currently exceed fossil-based jet fuel by a factor of two, and up to a factor of five in mandated markets.
Massive Cost Burden: The SAF premium is translating into an additional USD 3.6 billion in fuel costs for the industry in 2025. Airlines paid a premium of USD 2.9 billion for the limited 1.9 Mt of SAF available this year alone.
Market Distortion: The EU’s ReFuelEU Aviation mandate has sharply increased costs amid limited capacity and oligopolistic supply chains, allowing fuel suppliers to widen profit margins and charge airlines up to five times more than conventional jet fuel. The UK’s SAF mandate has similarly triggered debilitating price spikes.
“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production. Europe’s regulators must recognize that their approach is not working and urgently correct course,” Walsh added.
The failure of policy to accelerate the expansion of SAF production capacity is now jeopardizing airline-led efforts toward a sustainable future.
“Regrettably, many airlines that have committed to using 10% SAF by 2030 will be forced to reevaluate these commitments. SAF is not being produced in sufficient amounts to enable these airlines to achieve their ambition. These commitments were made in good faith but simply cannot be delivered,” said Walsh.
IATA also issued a strong warning regarding impending mandates for e-SAF (Synthetic Aviation Fuel) in the UK (2028) and the EU (2030). Given e-SAF’s extremely high cost base—potentially up to 12 times that of conventional jet fuel—repeating the same policy mistakes will have catastrophic results.
IATA’s Senior Vice President for Sustainability and Chief Economist, Marie Owens Thomsen, emphasized the need for a radical shift in approach: “Given the low SAF production volumes, it is evident that current policies are not having the desired effect. Faced with such facts, regulators must course-correct, ensure the long-term viability of SAF production, and achieve scale so that costs can come down. Mandates have done just the opposite, and it is outrageous to repeat the same mistakes with e-SAF mandates.”
Failure to support e-SAF production could lead to compliance costs escalating to an estimated EUR 29 billion by 2032.
IATA is calling on regulators to immediately pivot away from punitive mandates towards comprehensive incentive-based policies that prioritize production scale and cost reduction for both SAF and e-SAF.
