The International Air Transport Association (IATA) has downgraded its expectations for global Sustainable Aviation Fuel (SAF) production in 2025, warning that poorly designed policy mandates in Europe and the UK are inflating prices and slowing the sector’s growth.
In its latest estimates, IATA projects SAF output to reach 1.9 million tonnes in 2025 — double the volume produced in 2024 but lower than previous forecasts — before rising to 2.4 million tonnes in 2026. The association said the revision reflects inadequate policy support, despite existing production capacity. SAF currently costs two to five times more than conventional jet fuel, depending on the market, adding an estimated USD 3.6 billion to airline fuel bills next year.
The projected volumes mean SAF will account for only 0.6% of global jet fuel consumption in 2025, edging up to 0.8% in 2026.
“SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling SAF industry,” said Willie Walsh, IATA’s Director General. “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.”
IATA criticised Europe’s ReFuelEU Aviation rules, saying airlines have been forced to pay up to five times the cost of conventional jet fuel due to limited SAF supply and concentrated supplier markets. The UK’s SAF mandate, it said, has similarly triggered sharp price increases. Airlines are expected to pay a USD 2.9 billion premium for the limited 1.9 million tonnes of SAF available in 2025 — with about half of that linked to the standard price differential between SAF and fossil jet fuel.
“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production,” Walsh said. “Regulators must recognise that its approach is not working and urgently correct course.”
He added that many airlines may have to revise their voluntary commitments to use 10% SAF by 2030, as supply will fall far short of what is needed.
IATA also warned that forthcoming mandates for synthetic e-SAF in the UK (2028) and EU (2030) risk repeating the same policy failures. The fuel could cost up to 12 times more than conventional jet fuel, and without strong incentives for producers, supply is expected to miss mandated targets. Compliance costs could reach EUR 29 billion by 2032.
“Given the low SAF production volumes, it is evident that current policies are not having the desired effect,” said Marie Owens Thomsen, IATA’s Senior Vice President for Sustainability and Chief Economist. “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.”
IATA said meaningful incentives — rather than mandates — are essential if SAF and e-SAF production is to reach levels required for aviation’s net-zero pathway.
