According to IATA, SAF production is expected to reach 2 million tonnes (2.5 billion litres) in 2025, representing only 0.7% of total fuel consumption by airlines worldwide. While the increase signals progress, the price of adoption remains a concern. At current prices, the 2 million tonnes will add an estimated $4.4 billion to the aviation industry’s global fuel bill.

“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, Director General of IATA. “The pace of progress in ramping up production and gaining efficiencies to reduce costs must accelerate.”

Mandates Without Market Readiness

The European Union and United Kingdom mandates, effective from 1 January 2025, have led to a surge in SAF demand across Europe. However, IATA has raised concerns over the unintended consequences of these policies. For 2025, European airlines are expected to purchase 1 million tonnes of SAF at a base cost of $1.2 billion, with an additional $1.7 billion in compliance-related fees—fees charged by producers or suppliers that further burden the sector.

“These extra costs could have funded an additional 3.5 million tonnes of carbon abatement,” noted Walsh. “Europe’s approach has made SAF five times more expensive than conventional jet fuel, undermining the very goal of reducing aviation’s carbon footprint.”

He added that mandates, implemented without the necessary market safeguards, risk distorting the SAF market and jeopardising long-term decarbonisation efforts. “Europe needs to realise that its approach is not working and find another way,” Walsh said.

IATA’s Efforts to Build a Global SAF Framework

To support SAF scale-up, IATA is actively working on two core initiatives:

• A SAF Registry developed in partnership with the Civil Aviation Decarbonisation Organisation (CADO). This system will track SAF purchases, usage, and emissions reductions, ensuring compliance with international frameworks such as CORSIA and the EU Emissions Trading Scheme.
• The SAF Matchmaker, a platform designed to streamline procurement by connecting airline demand with SAF supply offers.

Call to Governments: Align Policies and Priorities

IATA is urging governments to act decisively in three critical areas:

1. Policy Equality: Level the playing field between renewable energy producers and traditional fossil fuel suppliers by reallocating a portion of the $1 trillion in global fossil fuel subsidies toward SAF development.
2. Integrated Energy Strategy: Adopt a comprehensive energy approach that increases renewable energy production and ensures adequate allocation to SAF. Policies should support shared infrastructure, co-production, and broader industrial benefits.
3. CORSIA Support: Back CORSIA as the single global market-based mechanism for international aviation emissions. Governments are encouraged to make Eligible Emissions Units (EEUs) accessible—Guyana remains the only country to have done so to date.

India’s Emerging SAF Potential

India, the world’s third-largest oil consumer, has signalled strong intent to integrate SAF into its energy strategy. Through the launch of the Global Biofuels Alliance, India is targeting a 2% SAF blend for international flights by 2028, supported by guaranteed pricing, capital funding for infrastructure, and robust technical standards.

To accelerate progress, IATA will collaborate with the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and Praj Industries Limited to ensure alignment with global best practices for feedstock life cycle assessments.

As the third-largest civil aviation market, India is well-positioned to become a global leader in sustainable aviation—if policies continue to align with long-term climate and economic goals.