Sustainable Fuel Growth Stalls Due to Policy Gaps IATA

The International Air Transport Association (IATA) reports a slowdown in the production growth of Sustainable Aviation Fuel (SAF), highlighting policy missteps as a key obstacle. Mandatory measures in the EU and UK have proven counterproductive, leading to soaring costs. The report urges policymakers to adjust their approach, establishing long-term policy frameworks, providing financial incentives, and strengthening international collaboration to promote SAF production and adoption. This is crucial for achieving a green future for the aviation industry.
Sustainable Fuel Growth Stalls Due to Policy Gaps IATA

The aviation industry faces mounting pressure to reduce its environmental footprint, with sustainable aviation fuel (SAF) emerging as the most promising solution. However, recent reports indicate this green alternative faces significant production and policy challenges that threaten its widespread adoption.

SAF: The "Green Blood" of Aviation

Sustainable aviation fuel represents a cleaner alternative to conventional jet fuel, capable of reducing lifecycle carbon emissions by up to 80%. Unlike traditional petroleum-based fuels, SAF can be produced from diverse sources:

  • Biomass: Derived from algae, oil crops (soybeans, rapeseed), or agricultural waste (corn stalks, rice husks)
  • Waste materials: Converted from municipal solid waste or food waste through advanced processing
  • Synthetic fuels: Produced using renewable electricity to create e-SAF through carbon capture and hydrogen synthesis

Beyond emissions reduction, SAF offers additional benefits including improved air quality, enhanced energy security through diversified fuel sources, and economic development opportunities in biomass-rich regions.

Mounting Challenges in SAF Implementation

Despite its potential, SAF faces three critical barriers to widespread adoption:

Production Shortfalls: Current SAF output remains negligible, projected to reach just 0.6% of total aviation fuel consumption by 2025. This scarcity creates a chicken-and-egg problem where airlines cannot access sufficient quantities to meet sustainability goals.

Prohibitive Costs: SAF currently costs two to five times more than conventional jet fuel. The International Air Transport Association (IATA) estimates airlines will incur an additional $3.6 billion in fuel expenses in 2025 alone due to SAF premiums.

Policy Missteps: Well-intentioned but poorly designed regulations in Europe have exacerbated these challenges. The EU's ReFuelEU Aviation initiative and UK mandates have created market distortions without ensuring adequate supply or quality control, leading to price spikes without corresponding environmental benefits.

Policy Reform: The Path Forward

Industry experts emphasize the need for coordinated policy adjustments to accelerate SAF adoption:

  • Establishing long-term policy frameworks to provide investor certainty
  • Implementing financial incentives like tax credits and production subsidies
  • Streamlining regulatory approvals for SAF production facilities
  • Supporting technological innovation to improve production efficiency
  • Fostering international cooperation on standards and best practices

Particular attention must be paid to upcoming e-SAF mandates in the UK (2028) and EU (2030), where production costs could reach twelve times conventional fuel prices without proper incentives.

The Road Ahead

The aviation industry's decarbonization efforts hinge on overcoming SAF's current limitations. While technical solutions exist, their implementation requires careful policy design that balances environmental objectives with economic realities. Without course correction, many airlines may need to revise their 2030 sustainability targets due to insufficient SAF availability.

As the industry navigates this transition, the focus must remain on developing truly sustainable solutions that consider the entire fuel lifecycle while maintaining aviation's essential role in global connectivity.