Geneva – The International Air Transport Association (IATA) has published new estimates confirming a worrying slowdown in the growth of global sustainable aviation fuel (SAF) production, warning that current regulatory frameworks—particularly in Europe and the UK—are hindering the sector’s development just before the e-SAF mandates come into effect.

According to IATA, SAF production is projected to reach 1.9 million tons in 2025, double the amount produced in 2024, but will only grow to 2.4 million tons in 2026, indicating a decline in the rate of expansion. Even with this increase, SAF will only account for 0.6% of total fuel consumption in 2025 and 0.8% in 2026, figures well below what is needed to meet global decarbonization targets.

IATA also noted that the additional cost of this limited SAF supply will reach USD 3.6 billion in 2025, driven by prices that are double those of fossil fuels and up to five times higher in regulated markets.

Willie Walsh, IATA’s Director General, stated that the current mandates are “poorly designed” and have had the opposite effect to that intended: making fuel more expensive and slowing production. In Europe, the ReFuelEU Aviation regulation has led to price increases due to low supply capacity and oligopolistic distribution chains. In the UK, its own mandate has generated price spikes that airlines must absorb without supply guarantees.

As a result, airlines face a total premium of USD 2.9 billion for available SAF in 2025, with fragmented policies that—according to IATA—”distort markets, slow investment, and undermine capacity expansion.”

The organization anticipates that many airlines will have to revise their commitments to use 10% SAF by 2030, as there simply won’t be enough production available to meet them.

Looking ahead to the e-SAF mandates in the UK (2028) and the EU (2030), IATA warns that repeating these mistakes would be even more serious. e-SAF can cost up to 12 times more than conventional fuel, and without strong incentives for its production, the targets will not be met. The costs of non-compliance could reach €29 billion by 2032.

Marie Owens Thomsen, IATA’s chief economist, insisted that a redesign of incentives is essential:

“The industry needs policies that guarantee the long-term viability of SAF production. Current mandates have had the opposite effect, and it is alarming that the same mistakes are being repeated with e-SAF.”

Source and Credits to IATA

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