The global aviation industry is confronting a serious challenge: the growth of Sustainable Aviation Fuel (SAF) is falling far below expectations, threatening decarbonization goals and potentially forcing airlines to reassess their environmental commitments. What's hindering SAF development, and how can this troubling trend be corrected?
Slowing SAF Production Growth Linked to Insufficient Policy Support
The International Air Transport Association's (IATA) latest report reveals that SAF production is expected to reach 1.9 million metric tons (approximately 2.4 billion liters) in 2025, doubling from 1 million tons in 2024. However, growth is projected to slow significantly in 2026, reaching just 2.4 million tons. This means SAF will account for only 0.6% of total aviation fuel consumption in 2025, rising marginally to 0.8% in 2026.
The 1.9 million ton projection for 2025 is already lower than IATA's previous estimates. The association attributes this shortfall to insufficient public policy support that fails to utilize existing SAF production capacity. Compounding the problem, SAF prices remain substantially higher than conventional jet fuel—reaching two to five times the price in markets with mandatory usage requirements.
IATA Director General Willie Walsh sharply criticized current approaches: "The slow growth in SAF production stems from poorly designed mandates that stifle momentum in this emerging industry. If policymakers aimed to slow progress and drive up prices, they've succeeded. But if their goal is increasing SAF production to advance aviation decarbonization, they must learn from these failures and collaborate with industry to design truly effective incentives."
EU and UK Mandates Backfire on SAF Development
Mandatory SAF measures implemented in the European Union and United Kingdom have failed to accelerate production and adoption, instead creating negative consequences:
- Europe: The ReFuelEU Aviation regulation has dramatically increased costs amid limited SAF supply and oligopolistic supply chains. Fuel suppliers have expanded profit margins, forcing airlines to pay up to five times conventional fuel prices—double typical SAF market rates—without supply guarantees or consistent documentation.
- UK: British SAF mandates triggered price surges, imposing additional burdens on airlines.
The cumulative effect of these flawed regulatory structures means airlines will pay an extra $2.9 billion for the 1.9 million tons of SAF available in 2025—with $1.4 billion reflecting the premium over conventional fuel.
Walsh emphasized: "Europe's fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production. European regulators must recognize this approach isn't working and urgently correct course. The EU Commission's recent STIP program announcement represents progress but lacks clear timelines. Action, not words, is what matters."
Airlines May Reassess SAF Usage Targets
The failure to expand SAF production capacity will likely force many airlines to reconsider their voluntary usage targets. "Regrettably, numerous airlines committed to 10% SAF usage by 2030 will need to reassess these pledges. Current production levels make these goals unachievable. These commitments were made in good faith but simply cannot be met," Walsh added.
Warning Against Repeating Mistakes with e-SAF Policies
With the UK (2028) and EU (2030) preparing to implement e-SAF mandates, avoiding SAF policy failures becomes crucial. e-SAF already faces substantially higher production costs—potentially 12 times conventional jet fuel prices. Without strong production incentives (rather than mandates), supply will fall short of targets. If missed, compliance costs could reach €29 billion by 2032—a likely outcome under current regulatory frameworks.
Marie Owens Thomsen, IATA's Senior Vice President for Sustainability and Chief Economist, stated: "Given low SAF production volumes, it's clear current policies aren't delivering intended results. Facing these facts, regulators must correct course to ensure SAF's long-term viability and achieve scale that reduces costs. Mandates have the opposite effect and must not be repeated with e-SAF policies."
Expert Recommendations for Effective SAF Development
To reverse SAF's disappointing trajectory and achieve aviation decarbonization goals, experts recommend:
- Establish clear, long-term policy frameworks: Governments should create predictable SAF development roadmaps to build investor confidence and encourage long-term commitments.
- Implement effective incentives: Replace mandates with stronger financial incentives like tax relief, subsidies, and loan guarantees to lower production costs and improve market competitiveness.
- Streamline approval processes: Accelerate SAF project approvals by reducing administrative barriers to attract more producers.
- Support technological innovation: Increase investment in SAF R&D to explore more efficient, economical production methods using waste, algae, and other alternative feedstocks.
- Strengthen international cooperation: Foster global collaboration on technology exchange and joint SAF development efforts.
- Create transparent certification systems: Ensure SAF sustainability to prevent greenwashing and maintain stakeholder trust.
- Plan for e-SAF development: Proactively address e-SAF challenges to avoid repeating SAF policy mistakes.
Conclusion
SAF remains aviation's most promising decarbonization solution, but current challenges—particularly inadequate policy support and high costs—threaten progress. Without timely course correction, industry climate goals may become unattainable. Governments, businesses, and research institutions must collaborate to develop effective SAF strategies that enable sustainable aviation.