IATA warns SAF production growth is slowing, urges policy correction

December 10, 2025 at 10:05 AM•2 min read

IATA warns sustainable aviation fuel production growth is slowing, urging policymakers to correct course on mandates.

Key Points

1IATA warns SAF production growth is slowing, with 2025 output revised down to 1.9 Mt due to insufficient policy support.
2Poorly designed EU and UK mandates have stalled SAF adoption, leading to airlines paying up to five times more for fuel and absorbing a USD 2.9 billion premium in 2025.
3Airlines may re-evaluate 2030 SAF targets due to inadequate supply, while future e-SAF mandates risk similar failures and EUR 29 billion in compliance costs by 2032.
4IATA urges regulators to correct course, implement production incentives, and scale SAF output to achieve aviation decarbonization goals.

The International Air Transport Association (IATA) has issued a significant warning regarding a slowdown in sustainable aviation fuel (SAF) production growth, emphasizing the critical need for policy correction. New IATA estimates project SAF output to reach 1.9 million tonnes (Mt) in 2025, doubling 2024's production, but growth is expected to decelerate to 2.4 Mt in 2026. This 2025 figure represents a downward revision from earlier forecasts, primarily attributed to insufficient policy support for existing SAF capacities. Currently, SAF accounts for only 0.6% of total jet fuel consumption in 2025, rising to 0.8% in 2026, with its premium price adding an estimated USD 3.6 billion to industry fuel costs in 2025.

IATA Director General Willie Walsh criticized poorly designed mandates in the EU and UK, stating they have stalled momentum and increased costs rather than accelerating SAF adoption. European policies, such as ReFuelEU Aviation, have led to sharp cost increases for airlines, with fuel suppliers widening profit margins and airlines paying up to five times more than conventional jet fuel prices, often without guaranteed supply. Similarly, the UK's SAF mandate has caused price spikes, forcing airlines to absorb the burden. The cumulative effect of these policy frameworks resulted in airlines paying a USD 2.9 billion premium for SAF in 2025, with USD 1.4 billion reflecting the standard premium.

Walsh warned that this failure to expand SAF production capacity will compel many airlines to reassess their commitments to using 10% SAF by 2030, as current production levels are insufficient to meet these ambitious targets. Looking ahead, IATA cautions against repeating these policy missteps with approaching e-SAF mandates in the UK (2028) and EU (2030). E-SAF faces even higher costs, potentially 12 times that of conventional jet fuel, and without strong production incentives, supply will likely fall short, leading to compliance costs that could reach EUR 29 billion by 2032. IATA's Senior Vice President for Sustainability, Marie Owens Thomsen, stressed that regulators must course-correct to ensure SAF's long-term viability and scale production to reduce costs.