Sustainable aviation fuel (SAF) production is growing, but “disappointingly slowly”, says the head of the International Air Transport Association (IATA).
Estimates from the global trade association place SAF production volumes at 1 million tonnes, or 1.3 billion litres, in 2024. This is double the 0.5 million tonnes produced in 2023, and SAF accounted for 0.3% of global jet fuel production and 11% of global renewable fuel.
However, this is “significantly below” previous estimates, which had projected that SAF production would reach 1.5 million tonnes in 2024, as key SAF production facilities in the US have postponed their ramp-up plans to 1H2025.
“SAF volumes are increasing, but disappointingly slowly,” says IATA Director General Willie Walsh in a Dec 10 statement. “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.”
Airlines, as the core of the value chain, earn just a 3.6% net margin on average, notes Walsh, previously head of British Airways.
Hence, profitability expectations for SAF investors “need to be slow and steady, not fast and furious”, he adds. “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.”
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At the same time, Walsh calls for governments to wind down fossil fuel production subsidies and replace them with incentives and clear policies supporting renewable energy projects, including SAF.
At 11%, the SAF percentage share of renewable fuel capacity is considerably higher this year than the 3% noted in 2023. IATA attributes this to stricter inclusion criteria for projects considered. “Only projects with current or announced future SAF capability were included, reducing the total number of projects considered. This doesn’t necessarily mean that renewable fuel projects are shifting towards more SAF but rather, the increase in the SAF share is due to a smaller overall base of renewable fuel projects,” notes IATA, which represents some 340 airlines comprising over 80% of global air traffic.
In 2025, SAF production is expected to reach 2.1 million tonnes, or 0.7% of total jet fuel production and 13% of global renewable fuel capacity.
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Global energy transition
The airline industry’s decarbonisation must be seen as part of the global energy transition, not “compartmentalised as a transport issue”, says Marie Owens Thomsen, IATA’s senior vice-president (sustainability) and chief economist.
To reach net-zero emissions by 2050, IATA analysis shows that between 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.
The annual average capex needed to build the new facilities over the 30-year period is about US$128 billion per year, “in a best-case scenario”, says IATA. “This amount is significantly less than the estimated total sum of investments in the solar and wind energy markets, at US$280 billion per annum between 2004 and 2022.”
Walsh says governments already have “a model to follow” with the transition to wind and solar power, and policymakers must quickly deliver “concrete policy incentives” to accelerate renewable energy production.
“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,” he adds, “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.”
Short-term measures
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IATA recommends three ways to expand SAF production.
First, existing refineries can be used to co-process up to 5% of approved renewable feedstocks alongside the crude oil streams. According to IATA, this solution can be implemented quickly and requires minimal material investments. By 2050, co-processing could save US$347 billion in capex as more than 260 new renewable fuel plants would not need to be built.
Second, producers should diversify SAF production. There are 11 certified pathways to make SAF, but the HEFA method, or the use of hydrotreated esters fatty acids, such as used cooking oil and animal fats, will account for around 80% of production in the next five years.
SAF volumes could be boosted by increasing investments to scale up production through the other certified pathways, says IATA. In particular, IATA highlights the Alcohol-to-Jet (AtJ) method and the Fischer-Tropsch (FT) method, which use biological and agricultural wastes and residue.
Third, a global SAF accounting framework will allow airlines to benefit from the environmental attributes of their SAF purchases and claim these against their obligations in a transparent manner that prevents double counting.
According to IATA, 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.
US$1 trillion revenue
IATA also forecasts industry-wide 2025 revenue of more than US$1 trillion, with record passenger numbers expected.
As a whole, the aviation industry is looking at a net profit of US$36.6 billion in 2025, up from US$31.5 billion expected in 2024, with a record 5.2 billion passengers set to fly.
But Walsh also calls out “unacceptable” delays by plane manufacturers Boeing and Airbus, which he believes are acting like “quasi-monopolies”.
These have pushed up prices of spare parts as supply dwindles. “We are going to have to ramp up the pressure and maybe look for support to force key suppliers to get their act together,” he adds.
