The International Air Transport Association (IATA) has revealed that Sustainable Aviation Fuel (SAF) production is expected to double to 2 million tonnes in 2025. However, this will still cover only about 0.7 percent of all airline fuel needs worldwide.
IATA’s Director General, Willie Walsh, said this progress is a step in the right direction, but the cost is huge. Producing even this small amount of SAF will add approximately $4.4 billion to the global fuel bill. Walsh warned that the industry must move faster to increase supply and bring costs down.
“The pace of progress must speed up […] both in ramping up production and in finding ways to bring costs down,” Walsh insisted.
Much of the current SAF supply is going to Europe, where new mandates from the EU and the UK took effect at the beginning of 2025. But these new rules have caused fuel prices to soar. Airlines now pay double for SAF due to fees from producers and suppliers.
For the expected one million tonnes bought in Europe to meet the rules, the cost will be around $2.9 billion. This includes $1.7 billion in extra compliance fees. According to Walsh, this outcome is “unreasonable.”
“This highlights the problem with implementing mandates before there are sufficient market conditions and before safeguards are in place against unreasonable market practices that raise the cost of decarbonization,” IATA’s Director General said.
“Raising the cost of the energy transition—which 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,” Walsh concluded.
