SAF Production Growth Rate is Slowing Down, Essential to Correct Course Ahead of e-SAF Mandates

The International Air Transport Association (IATA) has raised concerns that the growth rate of Sustainable Aviation Fuel (SAF) production is slowing down, just as the industry prepares for upcoming e-SAF mandates in the UK (2028) and EU (2030)

Key Findings
- 2025 Output: SAF production is expected to reach 1.9 million tonnes (Mt), double 2024’s output but still only 0.6% of total jet fuel consumption.
- 2026 Projection: Growth slows to 2.4 Mt, representing just 0.8% of global jet fuel demand.
- Cost Burden: At current prices, SAF premiums add USD 3.6 billion in fuel costs for airlines in 2025.
- Price Gap: SAF costs are 2–5 times higher than fossil jet fuel, with mandated markets seeing the steepest increases.

Policy Challenges
- EU & UK Mandates:
- ReFuelEU Aviation has sharply raised costs without ensuring supply security.
- UK’s SAF mandate triggered price spikes, leaving airlines to absorb the burden.
- Industry Impact: Airlines paid a USD 2.9 billion premium in 2025 for limited SAF availability.
- Future Risks: e-SAF could cost up to 12 times more than conventional jet fuel, with compliance costs potentially hitting EUR 29 billion by 2032.

Industry Voices
- Willie Walsh (IATA DG): Criticized poorly designed mandates, saying they “stalled momentum” and forced airlines to reevaluate SAF targets.
- Marie Owens Thomsen (IATA SVP Sustainability): Warned that repeating policy missteps with e-SAF would be “outrageous,” urging regulators to focus on incentives rather than mandates.

Implications
- Many airlines that pledged 10% SAF usage by 2030 may be forced to scale back commitments.
- Without stronger incentives and investment, SAF production will remain insufficient to meet decarbonization goals.
- The industry is calling for policy course correction to ensure SAF and e-SAF can scale sustainably.