IATA to Double Sustainable Aviation Fuel Production in 2025

Key Takeaways

• IATA announced global SAF production will double in 2025 to 2 million tonnes, covering 0.7% of aviation fuel needs.
• SAF costs 4.2 to 5 times more than conventional fuel, potentially adding $4.4 billion to airlines’ fuel expenses.
• EU and UK mandate 1.2 million tonnes SAF use in 2025; US aims for 3 billion gallons SAF by 2030.

The International Air Transport Association (IATA) has announced a major step forward in the aviation industry’s efforts to reduce carbon emissions: global production of Sustainable Aviation Fuel (SAF) is set to double in 2025, reaching about 2 million tonnes (2.5 billion liters). This news came during IATA’s 81st Annual General Meeting, held from June 1–3, 2025. While this increase is a positive sign, it still represents only a small fraction—about 0.7%—of the aviation sector’s total annual fuel needs. The announcement highlights both progress and the ongoing challenges facing airlines, fuel suppliers, governments, and travelers as the world pushes toward greener air travel.

What Is Sustainable Aviation Fuel and Why Does It Matter?

Sustainable Aviation Fuel, or SAF, is a type of jet fuel made from renewable sources like waste oils, plants, and other organic materials. Unlike traditional jet fuel, which comes from fossil fuels, SAF can help lower greenhouse gas emissions from airplanes. The aviation industry has committed to reaching net-zero emissions by 2050, and SAF is seen as a key part of this plan.

However, producing SAF is much more expensive than making regular jet fuel. In 2025, the average cost of SAF is expected to be 4.2 times higher than conventional jet fuel. This high price is a big problem for airlines, which already spend a large part of their budgets on fuel.

IATA’s 2025 SAF Production Target: A Step Forward, But Not Enough

IATA’s announcement that SAF production will double in 2025 is a clear sign of progress. In 2024, the world produced about 1 million tonnes of SAF. By the end of 2025, that number should reach 2 million tonnes. This growth is being driven by new commercial-scale SAF refineries starting operations and by government mandates, especially in the European Union 🇪🇺 and the United Kingdom 🇬🇧.

But even with this increase, SAF will only make up about 0.7% of the aviation industry’s total fuel use in 2025. To put this in perspective, global jet fuel consumption is expected to be around 311 million tonnes in 2025. The gap between what is needed and what is being produced remains huge.

The Cost Challenge: Why Is SAF So Expensive?

One of the biggest hurdles to wider SAF adoption is its cost. In 2025, SAF is expected to cost 4.2 to 5 times more than regular jet fuel. This means airlines will pay billions more for fuel if they use SAF. For example, the extra cost of SAF could add $4.4 billion to the global aviation fuel bill in 2025.

There are several reasons for these high prices:

• Limited supply: There are not enough SAF refineries yet, so supply is low and prices stay high.
• Expensive feedstocks: The raw materials used to make SAF, like waste oils and certain plants, are costly and sometimes hard to find.
• Technology costs: The process of turning these materials into fuel is still new and expensive.

Airlines are frustrated by these costs. Many believe that fuel suppliers are not doing enough to increase SAF production or lower prices. Willie Walsh, IATA’s Director General, has openly criticized fuel suppliers, saying, “The behavior of fuel suppliers in fulfilling the SAF mandates is an outrage. Fuel suppliers must stop profiteering on the limited SAF supplies available and ramp up production to meet the legitimate needs of their customers.”

Government Mandates and Policy Changes: Who Has to Use SAF?

Governments are starting to require airlines to use more SAF. In 2025, the EU and UK will require airlines to use about 1.2 million tonnes of SAF to meet their mandates. If airlines do not comply, they could face penalties or other costs.

In the United States 🇺🇸, the Biden Administration has set a goal of producing 3 billion gallons of SAF by 2030. The US is also looking at ways to convert existing renewable diesel plants to make SAF, which could help increase supply more quickly.

Another important policy is CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), run by the International Civil Aviation Organization (ICAO). Under CORSIA, airlines must buy and cancel emissions units to offset any increase in CO₂ emissions not covered by SAF use. This adds another layer of cost and complexity for airlines.

For more information about CORSIA and its requirements, you can visit the official ICAO CORSIA page.

How Is SAF Production Scaling Up in 2025?

The process of increasing SAF production in 2025 involves several key steps:

1. New Refineries: Several commercial-scale SAF refineries began operating in early 2025, with more expected to start later in the year.
2. Feedstock Sourcing: SAF is mainly made from waste oils and biomass. In the United States 🇺🇸, there is a push to convert renewable diesel plants to produce SAF, using existing infrastructure.
   3. Mandate Fulfillment: Airlines must buy SAF to meet government rules, often paying a premium price.
3. Offsetting Emissions: Airlines use programs like CORSIA to offset emissions that are not covered by SAF use.

Despite these efforts, the industry faces ongoing challenges in finding enough raw materials and building enough refineries to meet future demand.

Stakeholder Perspectives: Who Is Affected and How?

Airlines

Airlines are under pressure from both governments and customers to reduce their carbon footprint. They need more affordable SAF to meet mandates and avoid penalties. Many airlines are frustrated by high prices and limited supply, which cut into profits and make it harder to offer affordable tickets.

Fuel Suppliers

Fuel suppliers are cautious about investing in new SAF production because of the high costs and uncertain demand. They are also criticized for keeping prices high and not moving quickly enough to increase supply.

Governments and Regulators

Governments in the EU 🇪🇺, UK 🇬🇧, and United States 🇺🇸 are pushing for more SAF use through mandates and incentives. However, they are also criticized for not providing enough support or clear policies to help the industry scale up SAF production.

Environmental Groups

Environmental groups support the use of SAF but warn that the current pace of growth is not fast enough to meet climate goals. They call for stronger action from both governments and industry.

Aircraft Manufacturers

Delays in delivering more fuel-efficient airplanes make it even harder for airlines to reduce emissions. This puts more pressure on SAF as the main solution for cutting carbon in the short term.

The Numbers: SAF Production and Costs at a Glance

Here’s a quick look at the key numbers for SAF production and costs from 2023 to 2025:

These figures show that while production is growing quickly, SAF still makes up a very small part of the total fuel used by airlines. The high cost remains a major barrier.

The Role of IATA and Industry Leaders

IATA plays a central role in pushing for more SAF production and use. The association represents airlines worldwide and works with governments, fuel suppliers, and other stakeholders to set industry standards and advocate for policies that support greener aviation.

According to analysis by VisaVerge.com, IATA’s call for urgent government action is a sign of growing frustration within the industry. IATA wants governments to redirect fossil fuel subsidies to support SAF production and invest in new technologies that can lower costs and increase supply.

Marie Owens Thomsen, Hemant Mistry, and Dr. Preeti Jain from IATA’s Sustainability and Economics team have said that while the 2025 production targets are achievable, there is still uncertainty about how quickly supply can grow in the long term.

Policy Implications: What Does This Mean for Airlines and Travelers?

The push for more SAF has several practical effects:

• Higher Ticket Prices: As airlines pay more for SAF, some of these costs may be passed on to travelers in the form of higher ticket prices.
• Compliance Costs: Airlines that do not meet SAF mandates may face fines or other penalties, adding to their financial burden.
• Profit Margins: Even though airline profit margins are expected to rise to 3.7% in 2025 (up from 3.4% in 2024), this is still much lower than the average for other industries. High fuel costs make it harder for airlines to stay profitable.
• Supply Chain Tensions: Airlines and fuel suppliers are at odds over SAF availability and pricing, leading to tension and calls for more rapid scale-up.

Background: How Did We Get Here?

The aviation industry’s journey toward SAF began in earnest in 2021, when airlines worldwide committed to reaching net-zero emissions by 2050. SAF was identified as a cornerstone of this strategy because it can be used in existing aircraft and infrastructure, making it a practical solution for reducing emissions.

From 2023 to 2024, SAF production doubled each year, but it still made up only a tiny fraction of total jet fuel use. The doubling expected in 2025 is another important step, but the industry is still far from where it needs to be.

The Road Ahead: What’s Next for SAF and Aviation?

Looking ahead to 2030 and beyond, there are reasons for both optimism and caution:

• Production Capacity: Global SAF production is expected to grow as more refineries come online and as governments provide more support.
• US Goals: The United States 🇺🇸 aims to produce 3 billion gallons of SAF by 2030, with federal funding and incentives helping to drive growth.
• Technology and Feedstock: Long-term growth will depend on developing new technologies and finding more sustainable sources of raw materials.
• Policy Needs: IATA and industry experts agree that stronger government action is needed, including redirecting fossil fuel subsidies and supporting research and development for SAF.

Industry analysts warn that the slow pace of SAF scale-up is due to high costs, limited feedstock availability, and not enough policy incentives. US academic experts say that the best short-term way to increase SAF supply is to convert existing renewable diesel plants, but this approach is limited by current technology and the availability of raw materials.

What Can Stakeholders Do Now?

For airlines, the main focus should be on securing enough SAF to meet mandates and working with suppliers to lower costs. Fuel suppliers need to invest in new production capacity and find ways to bring prices down. Governments should provide clear policies and incentives to support SAF growth, while also making sure that environmental standards are met.

Travelers can expect to see more airlines promoting their use of SAF and may notice higher ticket prices as a result. Environmental groups will likely continue to push for faster action and greater transparency from both industry and governments.

Practical Guidance and Next Steps

• For Airlines: Start planning early to secure SAF supplies and budget for higher costs. Work with industry groups like IATA to advocate for better policies and more support.
• For Fuel Suppliers: Invest in new refineries and work with partners to find more affordable feedstocks. Be transparent about pricing and supply challenges.
• For Governments: Provide clear, long-term policies and incentives to support SAF production. Consider redirecting fossil fuel subsidies to support greener alternatives.
• For Travelers: Stay informed about how airlines are working to reduce emissions. Be prepared for possible changes in ticket prices as the industry shifts to greener fuels.

Where to Find More Information

For those interested in learning more about SAF policies and requirements, the ICAO CORSIA official website offers detailed information about international carbon offsetting rules for airlines.

Conclusion

IATA’s plan to double Sustainable Aviation Fuel production in 2025 is a meaningful step toward a greener future for air travel. However, the industry still faces big challenges, including high costs, limited supply, and the need for stronger government support. Airlines, fuel suppliers, governments, and travelers all have a role to play in making SAF a mainstream solution. The next five years will be critical as the world works to turn this promising technology from a niche product into the standard fuel for global aviation.

Learn Today

Sustainable Aviation Fuel (SAF) → Jet fuel made from renewable sources like waste oils and plants, reducing aviation carbon emissions.
IATA → International Air Transport Association representing airlines, leading initiatives for safer, greener air travel.
CORSIA → International program requiring airlines to offset emissions not reduced by Sustainable Aviation Fuel use.
Jet Fuel → Conventional fuel derived from fossil fuels, primarily used in aircraft engines worldwide.
Refinery → Facility where raw materials are processed into usable fuels like conventional jet fuel or SAF.

This Article in a Nutshell

IATA’s 2025 forecast shows Sustainable Aviation Fuel production doubling to 2 million tonnes, yet covers only 0.7% of aviation fuel. Costs remain high, pressuring airlines. Stronger government mandates, new refineries, and technology advances are vital, but supply and affordability challenges endure as the industry strives for greener air travel.
— By VisaVerge.com