One of the most discussed topics in the panels on the future of the airline sector during the 82nd annual assembly of the International Air Transport Association (IATA) is sustainability, more precisely the search for options to fossil fuels. But while ambitious targets have been set across the industry ecosystem for decarbonization by 2050, progress has been small and slow.
According to IATA data, global production of SAF (sustainable aviation fuel) grew from 1 million tons in 2024 to 1.9 million tons in 2025 and is expected to reach 2.4 million tons by the end of this year. While it may seem like a lot in absolute numbers, the association cites that this will only cover 0.8% of airlines’ fuel needs.
Willie Walsh, director general of IATA, recalled the goal is to reach 65%, or 500 million tons, by 2050. “The gap is huge and it is not closing quickly enough,” he said.
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He stated that airlines have sent “unequivocal signals” of demand for SAF, with more than 180 purchase agreements signed since 2021. “A SAF registry, matchmaking system and accounting principles are already in place to support the development of a global SAF market.”
But supply has nowhere near kept up with demand, according to Walsh. He cited canceled or scaled-back SAF projects in Sweden, the Netherlands, Germany, Spain, Denmark, the United Kingdom and Singapore.
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The executive stated that there are two basic public policy tools available — mandates or incentives — and stressed that this sequence is important. “Where incentives were used first, production successfully increased. This was demonstrated by production tax credits in the US. Brazil has enormous potential in SAF and appears to be moving in the right direction, but needs to align its policies to be successful,” he recommended.
But most governments “put the cart before the horse with mandates,” according to Walsh’s expression. “They raised prices, but they didn’t create supply.”
In the case of the EU and the United Kingdom, he called the situation absurd. Airlines are paying billions in “compliance surcharges” associated with mandates imposed on fuel suppliers. This compensates fuel suppliers for the full penalties that they — the suppliers themselves — would pay for not producing enough SAF”, he criticized, highlighting that this happens regardless of whether they have supplied SAF or not. “And this despite the airlines wanting to buy more SAF than is being produced”.
“Instead of learning from this spectacular failure of the SAF mandates, a similar approach is being considered for the eSAF, but with even greater penalties,” he warned.
Sector agreement threatened
Another component considered fundamental in the roadmap to net zero is threatened, according to IATA: CORSIA, the first global sectoral agreement to manage carbon emissions. “Governments created it and the sector fully supported it.
But the parts of governments responsible for aviation and CORSIA were not aligned with those responsible for the Paris Agreement. Offset credits for CORSIA — Eligible Emissions Units, or EEUs — need to be formally allocated based on what a country has achieved in its Paris Agreement commitments. And this is not happening”, reported the executive.
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Walsh explained that airlines will need somewhere between 170 and 236 million EEUs for the first phase of CORSIA. To date, only 10 countries have made these EEUs available. Guyana, for example, was a pioneer in the region, and there is a concentration of six countries in Africa, in addition to Laos, Cambodia and Uzbekistan. Together, they made a total of 38 million EEUs available.
“This falls far short of what is needed. But there is potential for much more. The $4 billion to $5 billion in climate finance at stake is a huge incentive. And the solution is simply to align internal government processes.”
For the executive, what is most difficult to remedy are the constant attacks that the EU has made on CORSIA, presumably to favor its EU ETS. “There is nothing to be gained by the EU repeating an embarrassing failure that we all remember. The EU was instrumental in CORSIA. Its current efforts to undermine CORSIA need to be called out for what they are — dishonest and unacceptable.”
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The journalist traveled at the invitation of IATA.
