Slow SAF growth "disappointing" says IATA

The International Air Transport Association (IATA) has announced updated projections for Sustainable Aviation Fuel (SAF) production, reflecting progress in the aviation sector's shift towards greener alternatives while acknowledging challenges in scaling output.

In 2024, SAF production is expected to double to 1 million tonnes, or 1.3 billion litres, compared to 2023 levels. Despite this growth, SAF will account for just 0.3% of global jet fuel production and 11% of global renewable fuel capacity. These figures fall short of earlier forecasts that had anticipated SAF production reaching 1.5 million tonnes (1.9 billion litres) in 2024. The lower-than-expected output is attributed to delays in ramping up key SAF facilities in the United States, which have now postponed their timelines to the first half of 2025.

Looking ahead, SAF production is expected to climb to 2.1 million tonnes (2.7 billion litres) in 2025, representing 0.7% of jet fuel production and 13% of global renewable fuel capacity. The adjusted projections underline the pressing need for greater investment and policy support to accelerate SAF adoption, a critical component in the aviation industry's efforts to achieve carbon neutrality.

Achieving net-zero CO2 emissions by 2050 will require a monumental shift in renewable fuel production infrastructure, according to IATA’s analysis. To meet this goal, the industry will need to establish between 3,000 and 6,500 new renewable fuel plants, which will also cater to sectors beyond aviation by producing renewable diesel and other fuels.

The investment required to construct these facilities averages approximately US$128bn annually over the next 30 years. While substantial, this figure is notably lower than the US$280bn invested annually in solar and wind energy markets from 2004 to 2022, highlighting the comparative feasibility of scaling renewable fuel production to support aviation’s decarbonisation efforts.

“SAF volumes are increasing, but disappointingly slowly. Governments are sending mixed signals to oil companies which continue to receive subsidies for their exploration and production of fossil oil and gas. And investors in new generation fuel producers seem to be waiting for guarantees of easy money before going full throttle. With airlines, the core of the value chain, earning just a 3.6% net margin, profitability expectations for SAF investors need to be slow and steady, not fast and furious. But make no mistake that airlines are eager to buy SAF and there is money to be made by investors and companies who see the long-term future of decarbonisation. Governments can accelerate progress by winding down fossil fuel production subsidies and replacing them with strategic production incentives and clear policies supporting a future built on renewable energies, including SAF,” said Willie Walsh, IATA’s director general.

“Governments must quickly deliver concrete policy incentives to rapidly accelerate renewable energy production. There is already a model to follow with the transition to wind and solar power. The good news is that the energy transition, which includes SAF, will need less than half the annual investments that realising wind and solar production at scale required. And a good portion of the needed funding could be realised by redirecting a portion of the retrograde subsidies that governments give to the fossil fuel industry,” said Walsh.