The International Air Transport Association (IATA) has announced a projected Sustainable Aviation Fuel (SAF) production of 2 million tonnes (2.5 billion liters) in 2025, accounting for just 0.7% of airlines’ total fuel consumption.
While this represents a doubling of production, IATA Director General Willie Walsh emphasized the urgent need for acceleration, highlighting that this relatively small amount will add an estimated $4.4 billion to the global fuel bill.
Walsh sharply criticized the implementation of SAF mandates, particularly in Europe, where new EU and UK regulations took effect on January 1, 2025.
He stated that these mandates have unacceptably doubled the cost of SAF to airlines due to exorbitant compliance fees charged by producers and suppliers.
For the estimated one million tonnes of SAF purchased to meet European mandates in 2025, Walsh projected a cost of $1.2 billion, with an additional $1.7 billion in compliance fees.
He argued that this extra cost, which could have abated an additional 3.5 million tonnes of carbon emissions, instead makes SAF five times more expensive than conventional jet fuel.
“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 asserted.
“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 Initiatives to Foster a Global SAF Market
In response to these challenges, IATA has been actively working on two key initiatives to support the development of a robust global SAF market:
SAF Registry: Managed by the Civil Aviation Decarbonization Organization (CADO), this registry provides a transparent and standardized system for tracking SAF purchases, usage, and associated emissions reductions.
It aims to ensure compliance with international regulations such as the Carbon Offsetting Scheme for International Aviation (CORSIA) and the EU Emissions Trading Scheme.
SAF Matchmaker: This platform is designed to streamline SAF procurement by connecting airline requests for SAF with available supply offers.
Urgent Government Action Imperative
IATA is calling on governments to take urgent action in three critical areas to accelerate SAF adoption:
Effective Policies: Governments must create policies that eliminate the disadvantages faced by renewable energy producers compared to the fossil fuel industry. This includes redirecting a portion of the estimated $1 trillion in global fossil fuel subsidies.
Comprehensive Energy Policy: A holistic approach to energy policy is needed that integrates SAF. This involves increasing renewable energy production, from which SAF is derived, and ensuring SAF receives an appropriate allocation of this renewable energy.
Such an approach should support joint infrastructure use, co-production, and other measures that benefit the energy transition across all economic sectors.
Strengthening CORSIA: IATA emphasizes the importance of CORSIA as the sole market-based mechanism for addressing international aviation’s CO2 emissions.
The association urges governments to make Eligible Emissions Units (EEUs) available to airlines, noting that Guyana is currently the only state to offer carbon credits for airlines to purchase and claim against their CORSIA obligations.
India’s Leading Role in Biofuels
IATA highlighted India’s proactive stance in the biofuels sector. As the world’s third-largest oil user, India launched the Global Biofuels Alliance to position biofuels as central to energy transition and economic growth.
The nation has set a target for 2% SAF blending for international flights by 2028, supported by enabling policies such as guaranteed pricing, capital support for new projects, and technical standards.
IATA announced its collaboration with the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and Praj Industries Limited to provide guidance on global best practices for life cycle assessment of feedstock use in the country.
Given its position as the third-largest global civil aviation market, IATA believes India can further solidify its leadership in biofuels through the accelerated adoption of SAF via progressive policies.
