IATA Media Day SAF briefing – only 1.3Bn liters in 2024

The air transport industry is committed to achieving net-zero CO2 emissions by 2050, and while regulation is necessary, over-regulation to address every issue makes things complex, according to Willie Walsh, director general of the International Air Transport Association (IATA). IATA's latest estimates for sustainable aviation fuel (SAF) production indicate that in 2024, volumes reached 1 million tonnes (1.3 billion liters) - double that of 2023. In 2024, SAF accounted for 0.3% of global jet fuel production and 11% of global renewable fuel. Yet, this is significantly below previous estimates that projected SAF production in 2024 at 1.5 million tonnes (1.9 billion liters). According to IATA, key SAF production facilities in the US have pushed back their production ramp-up to the first half of 2025. In 2025, SAF production is expected to reach 2.1 million tonnes (2.7 billion liters), 0.7% of total jet fuel production, and 13% of global renewable fuel capacity. “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," Walsh said at IATA's Global Media Day in Geneva on Tuesday. "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 decarbonization." In his view, 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. "We need greater awareness among governments around the world to recognize their huge role to play regarding SAF. It cannot just depend on the airline industry on its own. We are not asking for facilities to be developed just for the airline industry but for areas like road transport too [to make up volume] When we talk to governments and regulators we ask for the same support as for other [sustainability areas]," said Walsh. While the US leads the way with SAF, Walsh said the "stick" approach taken in Europe by introducing mandates and fines does not yield the same results. He does not think European politicians are addressing the issue in a coordinated fashion, and "merely making statements" is insufficient. The same goes for traditional fuel producers making "great announcements" but not translating into much action. "That is disappointing. For example, fuel suppliers might get fined and then just 'pass it on' to the airlines, which, in turn, are then forced to past the additional cost on to consumers. Then the politicians slap themselves on the back about their SAF measures, without asking themselves if it actually leads to the desired results. There needs to be a focus on data - to make sure the results intended are delivered. In Europe, for example, it is clear that they are not reaching the results," said Walsh. On the other hand, significant progress is being made in the US with, according to Walsh, clear evidence of additional incentivized production of SAF. The incoming Trump Administration brings with it several significant uncertainties. Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated. However, should the business=friendly stance of the first Trump administration continue into this term, gains from deregulation and business simplification could be significant. There is uncertainty regarding government support for aviation's decarbonization efforts in the US until the path that the new administration will take becomes clearer," said Walsh. "The general expectation is that some of the measures introduced by the Biden administration will be reversed but whether it will impact investments in the development of SAF is unclear at this stage. A lot of progress was made under the first Trump administration. I think there will be significant grey ground, but we think, on balance, Trump will be net-positive for the industry." To reach net zero CO2 emissions by 2050, IATA analysis shows that 3,000 to over 6,500 new renewable fuel plants will be needed. These will also produce renewable diesel and other fuels for other industries. In a best-case scenario, the annual average capex required to build the new facilities over 30 years is about $128 billion annually. This amount is significantly less than the estimated total sum of investments in the solar and wind energy markets, which was $280 billion annually between 2004 and 2022. In a presentation, Yue Huang, IATA's assistant director of climate policy, said there are lessons to be learned from the policies that created the wind and solar energy industries. The first lesson is strategic policy sequencing—creating technology-push policies first and demand-pull measures to follow. A second lesson is the crucial element of early and substantial governmental R&D support. Bojun Wang, IATA's manager of Net Zero modeling, added that without policy action, the transition cost would double airlines' fuel costs by 2050. "We need strong support from governments for a net-zero transition by 2050," said Wang. Walsh agrees that governments must deliver concrete policy incentives to accelerate renewable energy production rapidly. To create a global SAF accounting framework, IATA proposes that a registry that allows airlines to benefit from the environmental attributes of their SAF purchases and claim these against their obligations transparently, which prevents double counting, is essential. Such a registry is necessary for achieving a global SAF market where all airlines can buy SAF, and all SAF producers can sell their fuel to airlines.

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