IATA warns poorly designed SAF mandates threaten decarbonisation

The International Air Transport Association (IATA) has released updated estimates for sustainable aviation fuel (SAF) production, highlighting significant challenges for the aviation industry in meeting decarbonisation targets.
According to IATA, SAF production in 2025 is expected to reach 1.9 million tonnes (2.4 billion litres), doubling from the 1 million tonnes produced in 2024. However, growth is projected to slow in 2026, reaching just 2.4 million tonnes. SAF will account for only 0.6% of total jet fuel consumption in 2025, rising to 0.8% in 2026, while the SAF premium is expected to add $3.6 billion (€3.1 billion) in fuel costs for the airline industry in 2025.
This downward revision from earlier forecasts reflects insufficient policy support, high SAF prices — up to five times the cost of fossil-based jet fuel in mandated markets — and underutilised production capacity.
“SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling SAF industry.
“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 decarbonisation, regulators need to learn from failure and work with the airline industry to design incentives that will actually work,” said Willie Walsh, IATA director general.
Mandates in Europe and the UK have failed to accelerate SAF adoption. In Europe, the ReFuelEU Aviation framework has sharply increased costs amid limited SAF capacity and oligopolistic supply chains, forcing airlines to pay up to five times the price of conventional jet fuel without guaranteed supply or consistent documentation. In the UK, SAF mandates have triggered similar price spikes, leaving airlines to absorb significant costs.
“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production. Regulators must recognise the current approach is not working and urgently correct course. Announcements alone are not enough – action is required,” Walsh added.
“Current policies are not producing the desired effect. Regulators must ensure SAF production is viable long-term, achieve scale, and bring costs down. Mandates alone have done the opposite, and it would be outrageous to repeat the same mistakes with e-SAF,” said Marie Owens Thomsen, IATA senior vice-president for sustainability and chief economist.