Airlines ramp up SAF commitments, but IATA warns of major policy and cost barriers
The International Air Transport Association (IATA) projects that sustainable aviation fuel (SAF) production will double in 2025 compared to 2024 volumes. However, this figure represents only a small fraction of total fuel consumption, and the organization warns that without major policy shifts, the goal of carbon neutrality by 2050 will not be achieved.
A growing number of airlines worldwide are committing to the use of Sustainable Aviation Fuel (SAF) as they aim to achieve carbon neutrality by 2050. However, during its Annual General Meeting on June 1, the International Air Transport Association (IATA) warned of significant roadblocks—chiefly policy shortcomings and high costs—that are hindering the large-scale production and adoption of this eco-friendly fuel.
IATA reported it expects global SAF production to reach two million tonnes in 2025. Although this doubles the one million tonnes produced in 2024, it’s a downward revision from the 2.1 million tonnes projected in December 2024. More critically, these two million tonnes will cover just 0.7% of the total fuel consumption IATA forecasts for airlines this year.
SAFs, primarily made from waste materials like used cooking oil, can cut carbon emissions by up to 80% compared to conventional jet fuel. According to IATA, 81 airlines now have agreements in place to purchase and use SAF, up from 70 in 2023, with numbers continuing to rise. Singapore Airlines and its low-cost subsidiary Scoot are among those pledging to increase their use of sustainable fuel.
What you need to know about SAF and aviation:
What is SAF? Sustainable Aviation Fuel (SAF) is an alternative to traditional jet fuel, produced from renewable sources like organic waste or used oils.
Why is it important? SAF dramatically reduces lifecycle carbon emissions from flights, making it crucial to aviation’s net-zero goal for 2050.
What are the challenges? Production remains limited, costs are two to three times higher than conventional kerosene, and global incentive policies are still insufficient.
How much SAF will be produced in 2025? IATA estimates 2 million tonnes—only 0.7% of demand.
Dr. Marie Owens Thomsen, IATA’s Senior Vice President of Sustainability and Chief Economist, emphasized, “The problem isn’t the [aviation] industry. The problem is the energy source.” Speaking to journalists in New Delhi during the annual meeting, she called for government policies to maximize renewable energy production in all forms.
She urged governments to redirect part of the $1 trillion in global fossil fuel subsidies toward renewable energy producers, including SAF developers. Unless policies and behavior change, she warned, the aviation sector won’t meet its net-zero emissions goal by 2050. “It’s not impossible. It’s just that at the current pace, with today’s investments and policies, it’s a definite no,” Owens Thomsen stated.
IATA also highlighted the unintended consequences of certain regulations. SAF mandates in Europe and the UK—requiring fuel suppliers to blend 2% SAF into aviation fuel starting in 2025—have backfired. According to IATA, SAF costs, already two to three times higher than conventional fuel, doubled further because suppliers passed compliance costs onto airlines.
The projected cost of SAF to meet these mandates is $1.2 billion at current market prices, with compliance charges adding another $1.7 billion to airlines’ fuel bills. “We want to shout this loud and clear to everyone, so other countries considering mandates will rethink them,” Owens Thomsen said.
In contrast, Owens Thomsen praised Singapore’s approach as “innovative.” The city-state will require departing flights to use SAF, aiming for a 1% national target by 2026. Passengers will pay a fee to help cover the cost. Early 2024 government estimates suggest that economy passengers might pay an extra $3 for short-haul, $6 for medium-haul, and $16 for long-haul flights.
This revenue will fund centralized SAF procurement. While IATA has not proposed fare increases or centralized fuel buying, Owens Thomsen acknowledged, “The interesting and somewhat exciting part of this market is that no one knows how to do this yet. No one has the answer. Let’s see if it works and what can be learned.” There’s confidence Singapore will revise its policies if expectations aren't met.
Regarding SAF production, Preeti Jain, IATA’s head of net-zero programs, said around 300 global projects have been identified, with about 160 expected to be operational by 2030. In the Asia-Pacific region, 28 projects are planned with a combined capacity of 7 million tonnes. However, Jain expressed concerns about delays and slow progress, despite the region’s abundance of raw materials.
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