The International Air Transport Association (IATA) has said that inadequate policy frameworks are jeopardising the viability of sustainable aviation fuel (SAF) use in the aviation industry.
The IATA made its call as it announced that global production of SAF is expected to double to two million tonnes this year – welcome progress, but for the increased costs associated with using the sustainable fuel alternative.
Compliance fees
The group said that new mandates put in place by the EU and UK has meant the cost of SAF for airlines has doubled, due to compliance fees that SAF producers or suppliers are charging.
‘For the expected one million tonnes of SAF that will be purchased to meet the European mandates in 2025, the expected cost at current market prices is $1.2 billion,’ the IATA said. ‘Compliance fees are estimated to add an additional $1.7 billion on top of market prices’.
Rather than promote the use of SAF, these mandates have made SAF ‘five times more costly’ than conventional jet fuel, it added.
‘Pace of progress’
“While it is encouraging that SAF production is expected to double to 2 million tonnes in 2025, that is just 0.7% of aviation’s total fuel needs,” commented IATA director general Willie Walsh. “And even that relatively small amount will add $4.4 billion globally to the fuel bill. The pace of progress in ramping up production and gaining efficiencies to reduce costs must accelerate.”
Walsh hit out at the introduction of mandates before sufficient market conditions were established, and “before safeguards are in place against unreasonable market practices that raise the cost of decarbonisation. Raising the cost of the energy transition that is already estimated to be a staggering $4.7 trillion should not be the aim or the result of decarbonisation policies. Europe needs to realise that its approach is not working and find another way.”
To support the development of a global SAF market, the IATA has unveiled two initiatives – a SAF registry through the Civil Aviation Decarbonization Organization (CADO) to ensure transparent emissions tracking, and a ‘SAF Matchmaker’ platform to connect airlines with fuel suppliers.
The group is also calling for increased government action in terms of levelling the policy playing field for renewable energy producers, integrating SAF into broader energy planning, and strengthening the CORSIA framework with more accessible carbon credits. Read more here.
