The International Air Transport Association says sustainable aviation fuel (SAF) mandates are helping push up prices to five times that of standard fuel.
Mandates requiring 2% SAF in aviation fuel have started in Europe and Britain but IATA director general Willie Walsh says the new rules, without adequate supplies and given market conditions, were punishing airlines and passengers. The cost of SAF to airlines has ‘unacceptably’ risen in Europe because of compliance fees that producers or suppliers are charging. For the expected one million tonnes of SAF that will be purchased to meet the European mandates this year, IATA says the expected cost at current market prices is USD1.2 billion. Compliance fees are estimated to add an additional USD1.7b on top of market prices—an amount that could have abated an additional 3.5 million tonnes of carbon emissions. Instead of promoting the use of SAF, Europe’s SAF mandates have made SAF five times more costly than conventional jet fuel. “While it is encouraging that SAF production is expected to double to 2m tonnes in 2025, that is just 0.7% of aviation’s total fuel needs. And even that relatively small amount will add $4.4b globally to the fuel bill,’’ says Walsh. The pace of progress in ramping up production and gaining efficiencies to reduce costs must accelerate,” says Walsh. “This highlights the problem with the implementation of mandates before there are sufficient market conditions and before safeguards are in place against unreasonable market practices that raise the cost of decarbonisation.’’ IATA represents 80% of air traffic and want s governments to channel fossil fuel subsidies into supporting SAF, encourage green energy to produce SAF and back a market-based approach to CO2 emission management.
*New Zealand doesn’t have SAF mandates but Air NZ has its own 10% target by 2030.
