With sustainable aviation fuel (SAF) being crucial for reducing carbon emissions in aviation and transitioning to cleaner energy, new estimates from IATA show strong growth in SAF production, although it remains below previous expectations.
In 2024, SAF production reached one million tonnes, double the 0.5 million tonnes produced in 2023. SAF accounted for 0.3 per cent of global jet fuel production and 11 per cent of global renewable fuel. However, this is still below earlier projections of 1.5 million tonnes, as key SAF production facilities in the US have delayed their ramp-up to the first half of 2025. In 2025, SAF production is expected to reach 2.1 million tonnes, representing 0.7 per cent of total jet fuel production and 13 per cent 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. 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 per cent net margin, profitability expectations for SAF investors need to be slow and steady, not fast and furious,” said IATA’s director general Willie Walsh.
However, he added 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”.
He stressed: “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.”
IATA’s senior vice president sustainability and chief economist Marie Owens Thomsen echoed the sentiment, stating that aviation’s decarbonisation should be part of the global energy transition. Renewable fuel refineries will support various industries, with SAF as a small share, and airlines simply want access to their fair portion of renewable energy.
To achieve net-zero CO2 emissions by 2050, IATA analysis suggests that between 3,000 and 6,500 new renewable fuel plants will be required. These plants will also produce renewable diesel and other fuels for different industries. The annual capital expenditure needed to build these facilities over the next 30 years is estimated at around US$128 billion per year, in a best-case scenario. Notably, this figure is significantly lower than the US$280 billion per year invested in solar and wind energy markets between 2004 and 2022.
Governments must implement policies quickly to accelerate renewable energy production, using the wind and solar transition as a model. The energy shift, including SAF, will require less than half the investment needed for wind and solar, with much of the funding potentially coming from redirecting fossil fuel subsidies, continued Walsh.
To further accelerate SAF production and use, three key actions are needed.
First, existing refineries should be allowed to co-process up to five per cent renewable feedstocks alongside crude oil. Expanding this practice could save 347 billion pounds (US$425 billion) by 2050, as it would reduce the need for building over 260 new renewable fuel plants.
Second, while the HEFA method currently accounts for around 80 per cent of SAF production, increasing investments in alternative certified pathways like Alcohol-to-Jet and Fischer-Tropsch, which use biological and agricultural waste, would help boost SAF volumes.
Finally, creating a global SAF accounting framework is essential. A transparent registry would allow airlines to track and claim the environmental benefits of their SAF purchases, ensuring a well-functioning global SAF market and preventing double counting.
