IATA Warns SAF Mandates In EU And UK Fail To Boost Sustainable Aviation Fuel Production

IATA reports SAF production reached 1.9 million tonnes in 2025, criticises EU and UK mandates for limiting supply and raising costs for airlines.

The International Air Transport Association (IATA) has released updated estimates for Sustainable Aviation Fuel (SAF) production, highlighting challenges in scaling the industry. In 2025, SAF output is expected to reach 1.9 million tonnes (2.4 billion litres), double the 1 million tonnes produced in 2024. Growth is projected to slow in 2026, reaching 2.4 million tonnes. Despite this increase, SAF will account for only 0.6 per cent of total jet fuel consumption in 2025, rising to 0.8 per cent in 2026. At current prices, the SAF premium will add approximately USD 3.6 billion in fuel costs for the airline industry in 2025.

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The downward revision from earlier forecasts reflects insufficient policy support to fully utilise installed SAF capacities. SAF costs exceed conventional jet fuel by a factor of two, and by up to five in mandated markets.

“SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling SAF industry. If the goal of SAF mandates was to slow progress and increase prices, policymakers knocked it out of the park. But if the objective is to increase SAF production to further the decarbonisation of aviation, then they need to learn from failure and work with the airline industry to design incentives that will work,” said Willie Walsh, Director General of IATA.

Mandates in the EU and UK have failed to accelerate SAF production and adoption. In Europe, ReFuelEU Aviation has sharply increased costs amid limited SAF capacity and oligopolistic supply chains. Fuel suppliers have raised profit margins so that airlines pay up to five times the price of conventional jet fuel and double the market price of SAF, without guaranteeing supply or consistent documentation. In the UK, SAF mandates have also triggered price spikes, forcing airlines to absorb significant costs. In total, airlines paid a premium of USD 2.9 billion for the limited 1.9 million tonnes of SAF available in 2025.

“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production. Europe’s regulators must recognise that its approach is not working and urgently correct course. The recent European Commission STIP announcement is a step forward though it lacks a clear timeline. Actions, not words, are what matter,” said Walsh.

The shortfall in SAF supply will force many airlines to review their 2030 SAF commitments. “Regrettably, many airlines that have committed to use 10 per cent SAF by 2030 will be forced to reevaluate these commitments. SAF is not being produced in sufficient amounts to enable these airlines to achieve their ambition. These commitments were made in good faith but simply cannot be delivered,” said Walsh.

With e-SAF mandates approaching in the UK (2028) and EU (2030), policymakers must avoid repeating previous mistakes. “Given the low SAF production volumes, it is evident that current policies are not having the desired effect. Faced with such facts, regulators must course-correct, ensure the long-term viability of SAF production, and achieve scale so that costs can come down. Mandates have done just the opposite, and it is outrageous to repeat the same mistakes with e-SAF mandates,” said Marie Owens Thomsen, Senior Vice President for Sustainability and Chief Economist at IATA.