Sustainable Aviation Fuel (SAF) production is expected to reach 1.9 million tonnes (2.4 billion litres) this year, double the 1mt produced in 2024.
However, in 2026, SAF production growth is projected to slow down and reach 2.4mt, says IATA director general Willie Walsh.
SAF production in 2025 represents only 0.6% of total jet fuel consumption, increasing to 0.8% next year.
At current price levels, the SAF premium translates into an additional USD3.6 billion in fuel costs for the industry in 2025.
. . . 2026 Output
The estimated output this year is a downward revision from IATA’s earlier forecasts due to lack of policy support to take full advantage of the installed SAF capacities.
SAF prices exceed fossil-based jet fuel by a factor of two, and by up to a factor of five in markets where it is mandated.
“SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling industry. If the goal of SAF mandates was to slow progress and increase prices, policy makers knocked it out of the park,’’ says Walsh.
“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,” he adds.
. . . Mandates fail
Mandates in the EU and UK have failed to accelerate SAF production and adoption.
The cumulative impact of poorly designed policy frameworks is that airlines paid a premium of USD2.9 billion for the limited 1.9mt of SAF available in 2025.
Of this, USD1.4 billion reflects the standard SAF price premium over conventional fuel. “Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production,’’ states Walsh.
