IATA: Why EU, UK SAF Mandates Are Hurting Sustainable Fuel Supply, Not Helping

The International Air Transport Association (IATA) has issued a strong warning. It states that current EU and UK SAF mandates are failing to boost sustainable aviation fuel production. Instead, the policies are distorting markets. They are also restricting limiting SAF supply and raising costs for airlines.

IATA released updated estimates for the global SAF market trends. The association projected 2025 SAF output at 1.9 million tonnes (Mt). This volume is nearly double the 2024 total. However, it represents a downward revision from IATA’s earlier forecasts. The growth is expected to slow further in 2026. Production is projected to reach 2.4 Mt.

The Mandate Effect on Supply and Cost

Despite the doubling of production, SAF will account for a small fraction of total fuel use. SAF will only cover 0.6 per cent of total jet fuel consumption 2025. This share is expected to rise slightly to 0.8 per cent in 2026. This shortfall is happening while mandates are in effect.

IATA Director General Willie Walsh criticized the fragmented European policies. He argued they slow investment and undermine scaling efforts. The mandates have created market distortions. They have caused SAF prices to be up to five times higher than conventional jet fuel in mandated markets.

This price premium is a significant financial burden. The cost is expected to add an additional $3.6 billion to the airline industry’s fuel bill in 2025. Airlines paid a premium of $2.9 billion for the limited 1.9 Mt of SAF available in 2025.

The European and UK Frameworks

Both the European Union and the United Kingdom have introduced binding obligations. The goal is to secure demand for SAF. The EU’s ReFuelEU Aviation regulation, aligned with EASA efforts, mandates a 2 per cent SAF blend starting in 2025. This target escalates to 70 per cent by 2050.

Similarly, the UK SAF Mandate requires 2 per cent SAF in 2025. It then ramps up to 10 per cent by 2030 and 22 per cent by 2040. IATA contends that these mandates, without production incentives, merely increase compliance costs. They do not guarantee the necessary sustainable aviation fuel production volume.

Aviation Decarbonization Challenge

The sluggish growth rate has major implications for the aviation net zero goal. IATA warned that many airlines may need to re-evaluate their voluntary 2030 commitments. Many carriers had pledged to use 10 per cent SAF by that date. The current lack of sufficient supply makes these commitments undeliverable.

Major manufacturers, such as Boeing, rely on SAF availability. They need it to meet their own long-term sustainability goals. The current policy framework risks stalling the entire aviation decarbonization challenge.

The e-SAF Hurdle

IATA also raised concerns about upcoming mandates for synthetic Power-to-Liquid (PtL) fuels, or e-SAF. The UK will introduce an e-SAF obligation in 2028. The EU will follow in 2030.

E-SAF has an even higher cost base. It could be up to 12 times the price of fossil jet fuel. IATA argues that repeating the same policy mistakes with e-SAF will lead to further market failure. It will also drastically increase compliance costs, potentially reaching €29 billion by 2032.

IATA is calling for a policy shift. Regulators should focus on production incentives, not just demand mandates. This is essential to achieve the necessary scale and reduce costs. Find more insights on this topic and other commercial aviation news at flying.flights.