Sustainable Aviation Fuel (SAF) production is projected to double and hit 2 mn tonnes in 2025 — making up only 0.7% of airlines’ total fuel consumption, IATA’s Director General Willie Walsh said in a statement. The doubled production — albeit representing a minor amount of the industry’s total demand — could drive up the global fuel cost by an additional USD 4.4 mn.

Behind the production hike: The UK and the EU issued mandates earlier this year to stipulate the integration of SAF in their aviation industry — in which both the UK SAF and the EU’s ReFuelEU Aviation mandates require 2% of all jet fuel demand to be SAF starting in 2025. The UK aims to increase this rate to 10% by 2030 and 22% by 2040, whereas the EU is aiming for a 70% target by 2050.

Current green policy could bleed airlines dry: The projected cost for the one mn tonnes of SAF required by the EU could cost a combined USD 2.9 mn — USD 1.2 bn from production costs and USD 1.7 bn from mandated compliance fees. This makes sustainable fuels five times more expensive than traditional jet fuel, highlighting what Walsh described as “the problem with the implementation of mandates before there are sufficient market conditions and safeguards” that would keep prices reasonable.

What can IATA do? IATA has already established its SAF registry in March to manage a purchasing tracking system for the fuel emissions and cutbacks attributed to alternative fuels, as well as its usage and emission reductions. The registry provides technical support to organizations involved in the SAF supply chain and is overseen by the association’s Civil Aviation Decarbonization Organization (CADO). The association also has a SAF Matchmaker platform which connects airlines with SAF suppliers and producers.

Gov’ts need to step in as well: Governments need to focus on creating policies for the current market to make SAF more affordable — for producers to increase production and for airlines by limiting unnecessary fees.

Some regional players are also doubling down on SAF: Emirates is investing over USD 200 mn in SAF, while actively testing SAF-powered flights from Singapore, Amsterdam, and London. Joramco is also investing in DHL’s GoGreen Plus program to integrate SAF practices into its operations. Qatar Airways also partnered with Virgin Australia and Renewable Development Australia to develop an SAF production facility in North Queensland with a 96-mn-liter annual capacity. Red Sea Global and daa International signed an agreement in February with the Arab Petroleum Supply Company to supplySAFas a refueling option for all airlines operating from the airport.

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