IATA Warns of Slowing SAF Production as Airlines Push Toward Net-Zero

On December 9, 2025, IATA revealed that 2025 SAF output is projected to reach 1.9 million tonnes — roughly double 2024’s output but far below what is needed for meaningful decarbonization.

The 1.9 Mt of Sustainable Aviation Fuel will account for only 0.6% of total global jet fuel consumption this year and projections for 2026 place SAF output at 2.4 Mt, which is merely 0.8% of jet fuel demand. IATA also said that at current pricing, the SAF premium will add approximately USD 3.6 billion to the aviation industry’s fuel costs in 2025 alone.

Sustainable Aviation Fuel: Key Facts & Issues

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IATA’s Data that Highlight SAF Production and Growth data

This slow growth and elevated cost trajectory raise serious doubts about the sector’s ability to meet future targets — especially with synthetic SAF (e-SAF) mandates on the horizon in major regions like the European Union and the United Kingdom.

IATA attributes the sluggish growth in SAF adoption largely to “poorly designed mandates” in regions such as the EU and UK. Across Europe, the ReFuelEU Aviation rules have driven up expenses in a market where SAF production remains scarce and controlled by only a few suppliers.

According to IATA, the fuel suppliers “have widened their profit margins to such an extent that airlines pay up to five times more than the price of conventional jet fuel and double the market price of SAF“.

According to Willie Walsh, IATA’s Director General, Europe’s “fragmented: policies:

“…distort markets, slow investment, and undermine efforts to scale SAF production. Europe’s regulators must recognize that its approach is not working and urgently correct course. The recent European Commission STIP announcement is a step forward though it lacks a clear timeline. Actions, not words, are what matter”

Similarly, the UK’s SAF mandate has led to sharp price increases, forcing airlines to shoulder the additional cost.

Here are a few numbers that point to how the numbers surrounding sustainable aviation fuel market in the European Union looks like:

• Europe’s ReFuelEU Aviation Regulation requires suppliers to provide 2% SAF by 2025, scaling to 70% by 2050, with strict sustainability and emissions-saving criteria aligned with the Renewable Energy Directive.

• A dedicated sub-mandate for synthetic e-fuels begins at 0.7% in 2030 and rises to 35% in 2050, reflecting their long-term potential for deeper emissions cuts.

• Current global SAF output remains extremely limited, representing just 0.53% of jet fuel consumption in 2024, highlighting the need for rapid capacity expansion.

• Production facilities under development could cover the 3.2 million tonnes required for Europe in 2030, though far higher volumes will be needed afterwards.

• SAF prices continue to be a major barrier, costing three to ten times more than traditional jet fuel, though costs are expected to fall as technologies mature.

• SAF must meet strict international fuel-quality standards, with multiple pathways certified and ongoing work to enable 100% drop-in SAF by 2030.

In many mandated markets, SAF now costs two to five times more than conventional jet fuel, with no guarantee of supply or stable pricing.

IATA Director General Willie Walsh stressed that while mandates aim to accelerate the green transition, they have inadvertently hampered it:

“If the goal of SAF mandates was to slow progress and increase prices, policymakers knocked it out of the park. But if the objective is to increase SAF production to further the decarbonization of aviation, then they need to learn from failure and work with the airline industry to design incentives that will work.”

Because of the pricing distortions, airlines globally have paid an estimated USD 2.9 billion in premiums for the limited 1.9 Mt of SAF procured in 2025. Of that, about USD 1.4 billion reflects the standard SAF price premium over fossil fuel.

The effect has rippled through commitments made by carriers: many airlines that pledged to use up to 10% SAF by 2030 may need to reconsider given the limited supply and persistently high costs.

e-SAF Mandates and the Risk Ahead

Interest is rapidly growing in synthetic SAF — often referred to as e-SAF — as regulators lay down stricter mandates. In the UK, e-SAF obligations are expected by 2028, while the EU’s broader synthetic-fuel quotas target 2030 and beyond.

Under current policy trajectories, e-SAF could cost up to 12 times more than conventional jet fuel. IATA warns that without robust production incentives; these mandates may fail just like their SAF predecessors.

Estimates suggest that compliance costs for e-SAF could swell to as much as EUR 29 billion by 2032 if production volumes remain insufficient. IATA’s Senior Vice President for Sustainability and Chief Economist, Marie Owens Thomsen, argued that “current policies are not having the desired effect“.

“Faced with such facts, regulators must course-correct, ensure the long-term viability of SAF production, and achieve scale so that costs can come down. Mandates have done just the opposite, and it is outrageous to repeat the same mistakes with e-SAF mandates…”

Broader Industry Implications

The weak growth trajectory for SAF has broader consequences for aviation’s environmental goals. And the news about the weak growth trajectory comes at a time when airlines in Europe have been accused of greenwashing its passengers.

European Union’s following figures indicate that despite the environmental balance that SAF is set to provide, there’s a long way to go still.

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All in All

IATA’s study from September 2025 points to the fact that the airline industry could achieve net-zero by 2050 and that the carriers around the world will need 500 million tonnes (Mt) of SAF to do that.

One of the sources for this production is “Biomass”, which “has the potential to produce more than 300 Mt of bio-SAF annually by 2050” while the other one is “Power-to-liquid (PtL)”, which “will be required to reach 500 Mt of SAF production annually by 2050“.In other words,  200 Mt from of SAF will come from e-SAF.

The following are set to be the main challenges, though.

 

Challenge	What Lies Ahead
Strengthen feedstock supply chains	Improve sourcing systems, develop new sustainable feedstock streams, and guarantee that aviation has access to materials suitable for SAF production.
Accelerate technology deployment	Speed up commercial rollout of emerging pathways, particularly Power-to-Liquid (PtL), supported by affordable renewable energy, hydrogen, and carbon-capture infrastructure.
Ensure coordinated policy support	Align government frameworks to stimulate innovation, attract investment, and help build a stable, competitive SAF market.
Drive regional leadership	Leverage the capabilities of major regions — including North America, Brazil, Europe, India, China, and ASEAN — to lead global SAF expansion.
Mobilize the energy sector	Encourage fuel and energy producers to expand SAF capacity, back commercialization efforts, and integrate aviation decarbonization into long-term strategies.