Why Is the Airline Industry's Clean Fuel Transition Stalling, According to the IATA Chief?

The airline clean fuel transition is faltering, according to the head of the industry's largest trade body.

IATA Director-General Willie Walsh stated that progress on Sustainable Aviation Fuel (SAF) is insufficient. He delivered his warning at the Changi Aviation Summit in Singapore. Walsh noted that high SAF production costs and limited supply are choking the rollout of cleaner jet fuel.

The Production and Price Chokehold

SAF is the primary tool for the industry's ambitious aviation decarbonization goals. However, current production levels are far below expectations.

• Global SAF output reached only 1.9 million tonnes (Mt) in 2025.
• This volume represented just 0.6% of total jet fuel consumption.
• IATA revised this figure downward from earlier forecasts.

This scarcity directly fuels the cost disparity. SAF prices consistently exceed fossil-based jet fuel by a factor of two. In markets with strict mandates, the premium can be up to five times higher. The SAF premium translated into an additional $3.6 billion in fuel costs for the global industry in 2025.

For 2026, IATA projects SAF production will slow its growth, reaching only 2.4 Mt. This volume is expected to add an estimated $4.5 billion to airline fuel bills.

Policy and Regulatory Challenges

Walsh specifically criticized the design of regulatory frameworks. He argued that mandatory blending rules are counterproductive. These rules have pushed prices higher and discouraged voluntary demand.

He cited the European Union's (EASA) ReFuelEU Aviation mandate as an example. Walsh said this approach increases compliance costs. It fails to deliver the necessary supply growth. The IATA chief suggested that incentives work better than mandates. Incentives are needed to spur investment in new biorefineries and production facilities.

Walsh urged policymakers to learn from these failures. They must work with the industry to design effective support mechanisms.

Impact on Net Zero 2050 Target

The airline industry is committed to achieving its net zero 2050 target. SAF is the cornerstone of this plan, expected to deliver 65% of the necessary emissions reduction. The current slow pace jeopardizes this commitment.

The industry faces a massive capital investment requirement. One estimate places the transition cost as high as €2.4 trillion. Airlines cannot achieve this goal alone. They need financial institutions and governments to step up. The focus must shift from penalizing demand to incentivizing supply.

Manufacturers like Boeing are also investing in SAF technology. They are working on new aircraft capable of flying entirely on SAF. However, the structural constraint remains feedstock availability. There is intensifying competition for low-carbon feedstocks.

Walsh warned that many carriers may reassess their interim 2030 SAF-use commitments. This is necessary given the limited supply outlook. The industry must see clearer, bankable policy frameworks soon. This will encourage the large-scale investments needed for the limited SAF output to meet global demand.

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