By Marie Owens Thomsen, Senior Vice President, Sustainability & Chief Economist
The world’s governments gather in Montreal at the end of September to focus on the development of global aviation at the 42nd ICAO Assembly. Turning targets, promises, and pledges of support for the development of Sustainable Aviation Fuel (SAF) into actual SAF production should be top of mind.
Through ICAO, governments have agreed to decarbonize aviation by 2050—the epoch-defining Long-Term Global Aspirational Goal (LTAG). They also recognize the importance of SAF in achieving this and set an interim goal for SAF to enable a 5% reduction in international aviation’s carbon intensity by 2030.
Despite these commitments, SAF production is not on a trajectory to meet either of these goals. SAF production today satisfies just 0.7% of aviation’s fuel needs. And the ICAO Assembly is a golden opportunity for a critical re-set of efforts to make SAF the decarbonization driver we need it to be.
For SAF production to be possible, there has to be enough material (feedstock) available. SAF can be made from many things and in many ways, including used cooking oil, municipal waste, and agricultural residues. There is also the potential for e-SAF—SAF made by turning electrical power into liquid fuel. And whatever feedstock is used, it must be sustainable and not encroach on land or water resources needed to feed people.
The situation is encouraging. There will be enough feedstock, but it will only be available to aviation with some fundamental changes in how the SAF industry is developing. While this is no small task, the good news is that this can be influenced positively by government policy.
First, a functioning market for SAF is essential. Right now, there is far too little production of SAF and that production may not be in the physical location where the airline needs it. We can lower that barrier by adopting a book-and-claim system. If an airline can buy SAF where it is available and claim its sustainability benefits separately from the physical delivery, while verifying that there is no double-counting, then we can create a global market for SAF with infinitely more possibilities for it to be used to reduce aviation’s carbon emissions.
IATA has developed a SAF Registry to do the needed tracking. And to ensure that there is no bias in the system we have created a neutral third party to manage the Registry known as the Civil Aviation Decarbonization Organization (CADO). A registry cannot instantly deliver a global SAF market on its own, but with the support of governments, it can constitute foundational and indispensable market infrastructure.
Second, we need governments to update their policies when unintended consequences prevent progress. For example, mandates have had the perverse effect of driving up SAF prices when the policy objective must be to lower costs. Fuel suppliers have increased their margins on jet fuel to cover themselves for any risks related to the SAF mandates they face. As a result, Europe has become the most expensive place in the world to buy SAF with prices that are five times higher than conventional fuel. That’s monopolistic pricing behavior which it must be the duty of policy makers to prevent.
When creating new markets—energy markets in this case—the initial focus should be on developing the technology needed. Incentives are essential, to stimulate R&D, investments, production, reduce costs, and build a resilient SAF ecosystem. Mandates used too early in the process will only protect incumbents and raise their profits.
And lastly, we ask governments to look at the bigger picture when they consider their SAF policy options. SAF is a renewable fuel, part of total renewable energy production, which in turn is part of the whole energy complex. In essence, we need support to be redirected from fossil energy to renewable energies, providing low-emitting fuels to every sector, including SAF to air transportation. No sector and industry can solve their decarbonization on their own. It has to be a part of a national (regional, global) energy transition, and policy makers need to want it as much as we do.
Why sometimes they appear to not want it as much as we do is a bit of a mystery, given the gains it can bring to their economy. The energy transition can increase energy independence, create jobs, improve the agricultural sector, help preserve biodiversity, and strengthen local communities. The energy transition is a unique policy instrument for economic development across all sectors, everywhere.
There is momentum. Although still at low levels, SAF production did double in 2024 and will do so again in 2025. There are at least 160 SAF production projects that could become operational by 2030. And the list of airline agreements to purchase SAF is at 170 and rising. If governments can focus on supporting a functioning SAF market, correct mistakes when they happen, and align efforts with the big-picture possibilities of SAF, it is still possible to reach our common net zero by 2050 goal. That’s the message we’ll be taking to the ICAO Assembly.
