Sustainable Aviation Fuel (SAF) production hasn’t scaled fast enough to the optimum level the industry and climate goals require — even though SAF is widely seen as a key tool for reducing aviation emissions.
SAF production has grown substantially from very low levels, but it still represents only a tiny fraction of total jet fuel demand globally.
Currently, SAF production is well under 1% of the total jet fuel demand and expected to fall short of long-term targets.
SAF production growth is projected to slow down and reach 2.4mn tons in 2026 as poorly designed mandates seem to have stalled momentum in the fledgling SAF industry.
In 2025, SAF output is expected to reach 1.9mn tonnes, double the 1mn tons produced in 2024.
SAF production this year represents only 0.6% of total jet fuel consumption, increasing to 0.8% in 2026, according to the International Air Transport Association (IATA).
At current price levels, the SAF premium translates into an additional $3.6bn in fuel costs for the industry in 2025.
The estimated SAF output for 2025 of 1.9mn tons is a downward revision from IATA’s earlier forecasts due to lack of policy support to take full advantage of the installed SAF capacities.
SAF prices exceed fossil-based jet fuel by a factor of two, and by up to a factor of five in mandated markets.
IATA Director General Willie Walsh noted, “SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling SAF industry. 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.”
The cumulative impact of poorly designed policy frameworks is that airlines paid a premium of $2.9bn for the limited 1.9mn tons of SAF available in 2025. Of this, $1.4bn reflects the standard SAF price premium over conventional fuel.
“Europe’s fragmented policies distort markets, slow investment, and undermine efforts to scale SAF production. Europe’s regulators must recognise that its approach is not working and urgently correct course. The recent European Commission STIP announcement is a step forward though it lacks a clear timeline. Actions, not words, are what matter,” said Walsh.
The failure to accelerate the expansion of SAF production capacity will cause many airlines to review their own SAF targets.
“Regrettably, many airlines that have committed to use 10% SAF by 2030 will be forced to reevaluate these commitments. SAF is not being produced in sufficient amounts to enable these airlines to achieve their ambition. These commitments were made in good faith but simply cannot be delivered,” said Walsh.
EU's STIP (Sustainable Transport Investment Plan) announcement in aviation, unveiled in November, is a €2.9bn strategic plan to accelerate investment in renewable and low-carbon fuels (like SAFs) to meet its decarbonisation targets
Industry analysts say SAF is much more expensive than conventional jet fuel — typically 2–5 times higher per unit. This price gap makes airlines hesitant to buy large amounts because they operate on very slim profit margins.
Many producers struggle to make SAF financially viable without long-term contracts or government incentives. Airlines often don’t commit to large long-term purchase agreements, which in turn makes financiers and producers reluctant to invest in scaling up capacity.
Traditional SAF pathways like Hydroprocessed Esters and Fatty Acids or HEFA (from used cooking oil and animal fats) rely on limited feedstocks that are also used in other industries (like road biofuels). The global availability of these sustainable feedstocks is constrained.
Alternative feedstocks such as agricultural residues, municipal solid waste or algae have potential, but require new logistics, processing technologies, and infrastructure — which are not yet mature or widely deployed, analysts point out.
SAF production isn’t scaling optimally yet because of various economic, technical, logistical, regulatory, and supply-chain barriers.
The industry is still emerging from very low starting levels, and while capacity is growing, it remains too small and too costly vis-a-vis the global jet fuel market.
