SAF Growth Slows as Policy Gaps Undermine Aviation’s Decarbonisation Push: IATA
The International Air Transport Association (IATA) has released updated estimates for Sustainable Aviation Fuel (SAF) production, revealing a mixed picture for aviation’s decarbonisation efforts.
Global SAF output is expected to reach 1.9 million tonnes (2.4 billion litres) in 2025, nearly double the 1 million tonnes produced in 2024.
However, growth is projected to slow in 2026, with production rising to just 2.4 million tonnes, highlighting the challenges facing scale-up. Even at these levels, SAF will account for only 0.6% of total jet fuel consumption in 2025, inching up to 0.8% in 2026—far short of what is needed to meaningfully cut aviation emissions.
High Costs and Weak Policy Support Stall Momentum
IATA has revised its 2025 SAF outlook downward from earlier forecasts, citing insufficient and poorly designed policy support. Despite installed production capacity, SAF output has failed to accelerate due to a lack of effective incentives.
At current prices, SAF costs around twice as much as conventional jet fuel, and in markets with mandates, prices can rise to five times higher. For airlines, this translates into an additional USD 3.6 billion in fuel costs in 2025 alone.
“If the goal of SAF mandates was to slow progress and increase prices, policymakers knocked it out of the park,” said Willie Walsh, IATA’s Director General. “But if the objective is to scale SAF production and decarbonise aviation, then regulators must rethink their approach.”
EU and UK Mandates: Rising Prices, Limited Supply
According to IATA, SAF mandates in Europe and the UK have failed to deliver the intended boost to production and adoption.
Under the EU’s ReFuelEU Aviation framework, airlines face sharply higher costs amid limited SAF supply and concentrated fuel markets. In some cases, airlines are paying up to five times the cost of conventional jet fuel and double the market price of SAF, without guaranteed supply or consistent certification.
Similarly, the UK’s SAF mandate has triggered price spikes, leaving airlines to absorb the financial burden. In total, airlines paid a USD 2.9 billion premium for the limited SAF available in 2025—of which USD 1.4 billion reflects the standard SAF price gap over fossil fuel.
“Europe’s fragmented policies distort markets, slow investment and undermine efforts to scale SAF,” Walsh warned, calling for urgent course correction beyond policy announcements.
Airline SAF Targets Under Pressure
The slow expansion of SAF production is already forcing airlines to reconsider their climate commitments. Many carriers that pledged to use 10% SAF by 2030 may be unable to meet those targets due to supply constraints.
“These commitments were made in good faith,” Walsh said, “but SAF is simply not being produced in sufficient quantities to deliver on that ambition.”
The Risk of Repeating Mistakes with e-SAF
Looking ahead, IATA has cautioned regulators against repeating the same errors as e-SAF mandates approach—scheduled for 2028 in the UK and 2030 in the EU.
E-SAF faces an even steeper cost challenge, with prices potentially up to 12 times higher than conventional jet fuel. Without strong production incentives, IATA warns that supply will fall well short of targets, potentially pushing compliance costs to EUR 29 billion by 2032.
“Current policies are clearly not delivering the desired outcomes,” said Marie Owens Thomsen, IATA’s Senior Vice President for Sustainability and Chief Economist. “Mandates have driven up costs and constrained supply. Repeating the same approach with e-SAF would be a serious mistake.”
A Call for Smarter Incentives
IATA’s message is clear: mandates alone are not enough. To make SAF viable at scale, governments must shift focus toward long-term production incentives, policy coherence and market frameworks that encourage investment, expand supply and bring costs down—ensuring aviation’s path to net zero remains achievable.
