Sustainable aviation fuel output doubled in 2025 but share remains low

Sustainable aviation fuel (SAF) production is expected to have doubled in 2025 but will continue to account for less than one per cent of global jet fuel consumption, according to new estimates released by the International Air Transport Association (IATA).

In 2025, SAF output is expected to reach 1.9 million tonnes, equivalent to 2.4 billion litres, up from around 1 million tonnes in 2024.

However, growth is projected to slow in 2026, with production rising to 2.4m tonnes.

Despite the increase, SAF production in 2025 will represent just 0.6 per cent of total jet fuel consumption, rising to 0.8 per cent the following year.

At current price levels, the SAF premium is expected to translate into an additional $3.6bn in fuel costs for the airline industry in 2025.

IATA said the estimated SAF output for 2025 represents a downward revision from earlier forecasts, citing a lack of policy support to fully utilise installed SAF capacity.

At the same time, SAF prices exceed those of fossil-based jet fuel by around a factor of two, and by up to five times in markets where mandates apply, the association said.

IATA Director General Willie Walsh said that “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,” he said, adding that if the objective was to increase SAF production and support aviation decarbonisation, regulators needed to “learn from failure and work with the airline industry to design incentives that will work”.

Against this backdrop, IATA was sharply critical of SAF mandates introduced in the European Union and the United Kingdom, arguing that they have failed to accelerate production while significantly increasing costs for airlines.

In Europe, the ReFuelEU Aviation framework has pushed costs higher amid limited SAF capacity and oligopolistic supply chains.

Fuel suppliers have widened their profit margins to the extent that airlines are paying up to five times more than the price of conventional jet fuel and double the market price of SAF, IATA said, without guaranteed supply or consistent documentation.

In the UK, the SAF mandate has triggered price spikes, leaving airlines to absorb the financial burden.

As a result, airlines paid a cumulative premium of $2.9bn for the limited 1.9m tonnes of SAF available in 2025, according to IATA.

Of that amount, $1.4bn reflects the standard SAF price premium over conventional jet fuel.

“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production,” Walsh said, noting that while the European Commission’s recent Sustainable Transport Investment Plan (STIP) announcement was a step forward, it lacked a clear timeline.

Turning to the impact on airline climate commitments, IATA warned that the failure to accelerate SAF production capacity would force many carriers to review their targets.

“Regrettably, many airlines that have committed to use 10 per cent SAF by 2030 will be forced to reevaluate these commitments,” Walsh said, adding that SAF was “not being produced in sufficient amounts” to enable airlines to achieve those ambitions. He said the commitments had been made in good faith but “simply cannot be delivered”.

Looking ahead, IATA cautioned against repeating the same policy mistakes as mandates for synthetic aviation fuels, or e-SAF, approach in the UK in 2028 and in the EU in 2030.

Already, e-SAF faces a much higher cost base, potentially up to 12 times that of conventional jet fuel.

Without strong production incentives rather than mandates, IATA said supply would fall short of targets.

Under the current policy framework, compliance costs could rise to as much as €29bn by 2032 if targets are not met, which the association said was likely.

Marie Owens Thomsen, IATA’s senior vice president for sustainability and chief economist said that “Given the low SAF production volumes, it is evident that current policies are not having the desired effect.”

She said regulators must “course-correct, ensure the long-term viability of SAF production, and achieve scale so that costs can come down”, adding that mandates had “done just the opposite” and that it was “outrageous to repeat the same mistakes with e-SAF mandates”.