‍DELHI – In a step toward decarbonizing the skies, the International Air Transport Association (IATA) announced on the first day of its Annual General Meeting (AGM) that the global production of Sustainable Aviation Fuel (SAF) is expected to reach two million tonnes in 2025.

While this marks a doubling of 2024’s output, it still represents just 0.7% of total airline fuel consumption—a sobering reminder of the long road ahead.

“This small but growing volume of SAF will still add US$4.4 billion to airlines’ fuel bills globally,” said Willie Walsh, IATA’s Director General. “We must urgently accelerate production and drive down costs.”

A key challenge lies in the unintended consequences of well-meaning environmental mandates. In Europe, where SAF blending mandates took effect in January 2025, compliance costs have doubled the price of SAF. For the one million tonnes expected to be purchased to meet these mandates, airlines will pay US$1.2 billion—plus an additional US$1.7 billion in compliance fees. This $2.9 billion total could have instead abated 3.5 million tonnes of CO₂, raising questions about the effectiveness of current policy approaches.

“Europe’s strategy has made SAF five times more expensive than conventional jet fuel,” Walsh warned. “Decarbonization policies must not make the energy transition more costly.”

To help scale the SAF market, IATA is rolling out two major initiatives. The first is a SAF registry managed by the Civil Aviation Decarbonization Organization (CADO), which will ensure transparency and compliance with emissions schemes, such as CORSIA. The second, the SAF Matchmaker platform, aims to connect airlines with SAF suppliers, streamlining procurement.

Governments also play a critical role. IATA is urging them to refocus energy policies, eliminate fossil fuel subsidies that disadvantage renewables, and ensure SAF gets fair access to renewable energy infrastructure. Supporting the CORSIA framework and expanding access to eligible emissions credits is also key. So far, only Guyana has made credits available to airlines.

Meanwhile, India has biofuel ambitions. As the` world’s third-largest oil consumer and a rising aviation power, the country has committed to a 2% SAF blend by 2028. However, while the skies are busy, the fuel powering India’s aircraft is not yet sustainable, as there is currently no commercial production of SAF in the country.

If global aviation is to meet its sustainability goals, bold policy shifts and international cooperation—especially from emerging economies like India—are essential.