IATA Warns of SAF Growth Slowdown: Urgent Policy Reforms Needed Now!

Published on December 10, 2025

The International Air Transport Association (IATA) has issued a stark warning regarding the slow growth of Sustainable Aviation Fuel (SAF) production, calling for urgent changes in policy to meet the aviation industry’s decarbonization goals. According to IATA’s latest estimates, SAF production will reach only 1.9 million tonnes (Mt) in 2025, despite an earlier prediction of higher output. The association also highlighted that SAF production growth is expected to slow further in 2026, only reaching 2.4 million tonnes — a far cry from what is needed to meet the aviation industry’s ambitious carbon-neutral goals.

This news comes at a crucial juncture for the aviation sector, which has pledged to reduce its carbon footprint in line with the Paris Agreement. The slow pace of SAF adoption poses a significant barrier to achieving these goals, especially considering that SAF is seen as one of the most promising solutions to reduce aviation emissions.

SAF Growth Rate Slows: What It Means for the Aviation Industry and Decarbonization Goals

IATA has warned that the slowdown in SAF production is due to a combination of factors, including policy missteps in key markets like Europe and the United Kingdom, as well as the high costs associated with SAF production. At current levels, SAF will account for only 0.6% of total jet fuel consumption in 2025, with an increase to 0.8% in 2026. This is far below the volumes needed to meet the aviation industry’s net-zero emissions target by 2050.

One of the major challenges has been the high cost of SAF, which remains two to five times more expensive than conventional jet fuel. This pricing gap has contributed to USD 3.6 billion in additional fuel costs for the aviation industry in 2025, a burden that has primarily been passed onto airlines and, consequently, consumers. The escalating costs of SAF, combined with the lack of robust policy support, have made it increasingly difficult for airlines to rely on SAF to meet their sustainability commitments.

The Failure of SAF Mandates in the EU and UK: How Poorly Designed Policies Are Hindering Progress

IATA has called attention to the negative impact of EU and UK SAF mandates on the industry’s ability to scale up SAF production. Specifically, ReFuelEU Aviation, the European initiative aimed at increasing SAF use, has resulted in sharply increased costs without guaranteeing consistent supply or reliable documentation. Airlines are now paying up to five times more than the market price for conventional jet fuel due to a lack of competition and an oligopolistic supply chain in SAF markets.

In the UK, the SAF mandate has similarly led to price spikes, forcing airlines to absorb the burden. According to Willie Walsh, IATA’s Director General, if the goal of SAF mandates was to slow progress and increase fuel prices, policymakers have succeeded. However, he argued that if the objective is to scale up SAF production and reduce aviation emissions, these policies have been a failure.

The Growing Cost of SAF and Its Impact on Airlines

The premium paid for SAF in 2025 is projected to be a staggering USD 2.9 billion, with USD 1.4 billion of that reflecting the price difference between SAF and conventional jet fuel. This puts a significant strain on airline operations, especially for global carriers that have committed to using 10% SAF in their fuel mix by 2030. However, IATA has warned that these commitments are now at risk as the pace of SAF production continues to lag behind the required targets. Walsh pointed out that many airlines will be forced to reevaluate their SAF goals if production does not ramp up in the coming years.

The IATA report also indicates that Europe’s fragmented SAF policies have distorted the market, slowed investment, and undermined efforts to scale up SAF production. In particular, inconsistent mandates across the region have caused supply shortages, increasing prices without guaranteeing sufficient supply. Walsh urged European regulators to recognize that their current approach is not working and to urgently correct course. The recent announcement of the European Commission’s Sustainable Transport and Infrastructure Plan (STIP) is a step forward, but IATA emphasized that actions, not words, are needed.

Looking Ahead: The Challenge of e-SAF Mandates

As the industry turns its attention to e-SAF (electro-fuel), the UK and EU are setting ambitious targets for its use in the coming decades, with e-SAF mandates expected in the UK by 2028 and the EU by 2030. However, IATA has cautioned that e-SAF will face an even higher cost base, potentially up to 12 times more than conventional jet fuel, without proper incentives for production. Compliance costs could escalate to EUR 29 billion by 2032 if targets are not met, and at the current pace, IATA believes that e-SAF production will fall short of expectations.

Marie Owens Thomsen, IATA’s Senior Vice President for Sustainability and Chief Economist, echoed Walsh’s concerns, stating that regulators must learn from the mistakes made with SAF mandates to avoid repeating them with e-SAF. If the e-SAF mandates are introduced without the proper production incentives, the cost of compliance could further destabilize the aviation sector, creating a significant barrier to decarbonizing the industry.

Conclusion: The Urgent Need for Policy Change to Scale SAF Production

The aviation industry’s ability to meet its carbon-neutral goals by 2050 hinges on the scaling up of SAF production and the correction of policy missteps that have hindered growth. IATA has stressed that without robust policy incentives, the industry will continue to face supply shortages, cost increases, and delayed sustainability targets. To avoid missing the opportunity to decarbonize aviation, regulators must work in collaboration with airlines and the SAF industry to design policies that effectively incentivize production and ensure a reliable supply of affordable, sustainable aviation fuel.

As the industry looks to the future, the challenges surrounding SAF are clear. However, with the right policies and industry collaboration, the vision of a carbon-neutral aviation sector is still achievable.