Inside the Race to Decarbonize Aviation
- SAF production is expanding fastest in emerging markets such as India, Argentina, and Indonesia, reshaping the global landscape.
- Europe and the U.K. are pressing ahead with blending mandates, but airlines warn that costs and supply constraints threaten compliance.
- Without stronger policy clarity and industry follow-through, SAF risks falling short of its role in aviation’s long-term decarbonization strategy
At the end of 2024, the International Air Transport Association (IATA) reported that there had been disappointingly slow growth in the sustainable aviation fuel (SAF) sector. However, one year on, there is greater promise around the expansion of the SAF industry, as several countries begin to develop their SAF industries.
SAF is an alternative fuel made from non-petroleum feedstocks that reduces emissions from air transportation. SAF can be blended at different levels with limits between 10 percent and 50 percent, depending on the feedstock and how the fuel is produced. According to the International Civil Aviation Organisation (ICAO), over 360,000 commercial flights have used SAF at 46 different airports, largely concentrated in the United States and Europe.
In December 2024, the IATA reported that SAF volumes had doubled to 1 million tonnes, compared to 0.5 million tonnes in 2023. However, it contributed just 0.3% of global jet fuel production, suggesting that much more needs to be done to decarbonise the aviation sector. Previous SAF production estimates put output at 1.5 million tonnes for 2024, but several delays at new facilities led companies to fall short on predictions. At this point, the IATA anticipated SAF production would grow to 2.1 million tonnes in 2025.
“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,” said the IATA’s Director General, Willie Walsh.
In October, the European Union Aviation Safety Agency (EASA) published its first ReFuelEU Aviation Annual Technical Report, outlining the achievements being seen in the SAF sector. EASA found that the EU is on track to meet the compulsory SAF blend of 6 percent by 2030, even though the technology is still in an early stage in the EU. The research showed that 25 fuel suppliers provided SAF to 33 EU airports across 12 EU Member States.
In 2025, the EU and the U.K. imposed a mandate requiring 2 percent of jet fuel to be sustainable. This figure rises to 6 percent in the EU and 10 percent in the U.K. by 2030. However, some airlines are concerned about the lack of availability of SAF and the high cost of the fuel. The CEO of low-cost airline Ryanair, Michael O’Leary, has dismissed the need to shift to SAF. “It is all gradually dying a death, which is what it deserves to do. We have just about met our 2 percent mandate. There is no possibility of meeting 6 percent by 2030; 10 percent, not a hope in hell. We’re not going to get to net zero by 2050,” said O’Leary.
Meanwhile, the IATA’s Willie Walsh suggested that a 5 percent target by 2030 might be more realistic. Walsh stated in October that he was disappointed with progress in the SAF industry and does “not believe that target can be achieved given where we are in terms of SAF production”. He also said that there was a clear case for SAF, “We now need to turn what we know is technically possible into something that’s commercially possible and commercially viable for the industry.”
However, the U.K. is hopeful about the potential for SAF production, with the Department for Transport allocating $84.2 million to 17 companies looking to produce SAF in the U.K. in July.
Meanwhile, we are seeing significant SAF production expansion in new markets, including India, Argentina, and Indonesia. India Oil’s Panipat refinery was recently certified to produce SAF from cooking oil, making it the first plant in the country with this capability. Indian Oil will use abundant waste feedstocks to produce SAF.
In Argentina, the state-owned oil company YPF announced plans to invest $400 million in its joint venture Santa Fe Bio, where it will produce SAF from agricultural residues and waste oils. This is expected to help establish the South American country as a regional SAF hub in the coming years.
In Indonesia, Pertamina has delivered its first SAF shipment, produced at its Cilacap refinery, to Soekarno–Hatta Airport. The firm is using a mix of waste cooking oil and conventional jet fuel to produce SAF, with a production capacity of 1,400 kilolitres a day. It hopes to deliver 1.7 million litres to Jakarta this year.
However, some SAF projects in more conventional production hubs, such as the United States, have faltered. Several companies have been forced to delay production or halt operations due to a plethora of challenges, such as high costs and a lack of industry commitment to SAF. “Some airlines were engaged in a pretty disingenuous effort to put out press releases” overstating their commitment to SAF projects, said World Energy’s CEO Gene Gebolys. “People sometimes said too much in the past and did too little.”
While new SAF-producing powers are beginning to emerge in unexpected parts of the world, other, more traditional SAF producers are falling behind on their targets. To increase SAF production on a global scale, the aviation industry must follow through on its commitment to decarbonise, which could be supported through stricter government mandates with clear SAF blend targets.
By Felicity Bradstock for Oilprice.com
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