A Turbulent Push for Net Zero: How Airlines, Fuel Producers, and Policymakers Are Reshaping the Future of Flight

Aviation's $4.7 Trillion Gamble on Climate

At the 2025 IATA summit in New Delhi, more than 350 global airlines reaffirmed their commitment to achieving net zero emissions by 2050, a bold move that could cost the sector an estimated $4.7 trillion. Yet behind the confident pledges, tensions continue to brew across the aviation value chain.

Despite a shared climate goal, airline executives voiced growing frustration over fuel suppliers, aircraft manufacturers, and policymakers who have fallen behind in delivering the tools and resources needed to meet industry targets.

"We still have time to get there, but we do need to see more action on the part of all of the partners in the value chain," said Willie Walsh, Director General of IATA.

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The Sustainable Aviation Fuel (SAF) Dilemma

Sustainable aviation fuel is widely viewed as the aviation sector's most powerful tool for reducing emissions. IATA expects production to reach 2 million tonnes in 2025, which is twice the amount produced in the previous year. Still, this figure accounts for only 0.7% of total jet fuel demand, highlighting the scale of the challenge ahead.

The mismatch between ambition and availability continues to be the main source of friction. Airlines point to an urgent need for greater production, while suppliers push back, citing oversupply and price resistance.

"Contrary to what some are saying, we believe we have an oversupply situation currently in the SAF market," said Carl Nyberg, Senior VP at Neste, one of the world's leading SAF producers.

The real issue, Nyberg added, is price: SAF costs three times more than traditional jet fuel. And with suppliers in Europe adding compliance fees tied to new regulations, some carriers claim the cost of SAF has soared to five times that of fossil-based alternatives.

Long-Term Deals Could Unlock Supply

Matthias Berninger, Executive VP of Sustainability at Bayer, argues the solution lies in long-term purchasing contracts. Speaking at ICAO’s Aviation Climate Week, he said:

"If they [airlines] commit to buy a certain amount over a certain period of time, we can guarantee that farmers will grow it and processors will process it."

Bayer, through its crop science unit, plays a major role in SAF feedstock supply, supporting farmers who grow biomass crops essential to fuel production. Long-term contracts could stabilize demand and trigger the scaling needed to bring costs down across the board.

Europe's Mandate Backfires

While mandates were intended to jumpstart SAF adoption, IATA believes Europe's 2% blending requirement has led to unintended negative consequences. Instead of encouraging growth, the rule has driven up costs and created added pressure on airlines without meaningfully expanding fuel availability. The approach, according to IATA, risks slowing the very progress it was meant to accelerate.

According to IATA, the European SAF mandate has inflated costs by $1.7 billion in compliance fees alone. That amount, if invested wisely, could have abated an additional 3.5 million tonnes of CO2.

"Raising the cost of the energy transition that is already estimated to be a staggering $4.7 trillion should not be the aim or the result of decarbonization policies," said Walsh.

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CORSIA and the Push for Global Consistency

Meanwhile, IATA is pushing for stronger global alignment through CORSIA, the international aviation offsetting framework. So far, only Guyana has issued the high-quality carbon credits required to meet CORSIA standards, highlighting a major lag in global participation.

To aid the transition, IATA recently launched a SAF Registry managed by the Civil Aviation Decarbonization Organization (CADO) and a SAF Matchmaker platform to connect buyers and sellers of clean fuel.

These tools aim to bring greater clarity to the SAF market by helping airlines track purchases and carbon reductions with consistency. They also foster trust in emissions data by standardizing how SAF is measured and verified globally. Regardless of where the fuel is made or consumed, the process ensures accountability and transparency every step of the way.

Airlines Are Turning Profits, But Margins Remain Thin

Airlines are expected to see stronger financial results in 2025, with IATA projecting net profits of $36 billion. Total revenues are anticipated to reach a record $979 billion, reflecting steady growth across both passenger and cargo markets. These gains suggest a more resilient industry, even in the face of persistent cost pressures and global uncertainty.

Still, the margins are razor thin: just $7.20 in net profit per passenger, or 3.7% overall. And as Walsh reminded governments and regulators:

"Our profitability is not commensurate to the enormous value that we create at the heart of a value chain supporting 3.9% of global GDP."

Infrastructure and Aircraft Delivery Delays Still Holding Industry Back

While SAF is the leading tool for decarbonization, it isn't the only area facing challenges. Airlines are also counting on the arrival of newer, more fuel-efficient aircraft to reduce emissions. However, many of these planes are caught in delays caused by ongoing supply chain disruptions.

Aircraft backlogs now top 17,000 units, implying a 14-year wait for delivery. Issues with engine reliability and spare parts have left more than 1,100 aircraft under 10 years old in storage, dragging down fleet efficiency and raising operational costs.

"Manufacturers continue to let their airline customers down," Walsh said. "It’s just not acceptable that it could take until the end of the decade to sort this mess out."

India Emerges as a Growth Engine

Despite ongoing global turbulence, India continues to stand out as a beacon of opportunity. Its rapidly expanding aviation sector, combined with strong climate ambitions, is helping the country gain recognition as a rising force in the biofuels industry. By aligning market growth with sustainability, India is carving out a strategic leadership role in the clean energy transition.

The country has launched the Global Biofuels Alliance, introduced 2% SAF blending targets by 2028, and is working closely with groups like the Indian Sugar & Bio-Energy Manufacturers Association and Praj Industries to align feedstock and policy frameworks.

Prime Minister Modi’s presence at the IATA AGM underscored India’s commitment, especially as the country’s airlines have placed orders for over 2,000 new jets.

What Needs to Happen Next

Across the industry, there’s growing urgency to speed up climate action. IATA and its members are calling for:

• Production incentives and supportive policy frameworks for SAF, modeled after successful renewable energy subsidies

• Immediate investment from energy companies into SAF production, without waiting for perfect price conditions

• Global alignment through CORSIA, and access to quality carbon credits

• Modernization of fleets and infrastructure, free from trade-related disruptions

There is a silver lining to the turbulence: public trust in aviation’s climate goals remains intact. In April 2025, a global survey found that 81% of travelers believe airlines are taking climate action seriously. This shows that despite the industry's many challenges, its efforts to reduce emissions are resonating with the flying public.

The path to net zero by 2050 won’t be smooth, but the push is gaining momentum. With stronger policies, better partnerships, and bold investment, the industry could shift from turbulence to tailwinds.