SAF Production Hits Only 0.8% of Aviation Fuel Use in 2026 as IATA Warns Path to Net Zero Is Growing More Difficult

The International Air Transport Association has estimated that global sustainable aviation fuel production will reach approximately 2.4 million tonnes in 2026, representing just 0.8 percent of total aviation fuel use at a cost to airlines of $4.3 billion, in what IATA Director General Willie Walsh described as another disappointing year for SAF production. Five years after the aviation industry committed to achieving net zero by 2050, the gap between current production and the 65 percent SAF contribution required by 2050 remains vast, with Walsh warning that the path to meeting that target is growing more difficult with each year of ineffectively sequenced government policies and oil companies' manifest lack of interest. Walsh said the current energy shock should add urgency to SAF development as part of broader renewable energy expansion but that neither the energy shock, the need for energy independence nor climate urgency have yet materialised in the incentives needed to create a viable SAF market.

 

The Scale of the SAF Gap

 

The 0.8 percent SAF share in 2026 illustrates the enormity of the scale-up required to meet aviation's net zero commitment, with the industry needing to grow SAF from a tiny fraction of fuel use to 65 percent over the next 24 years. Even optimistic SAF growth scenarios require sustained double-digit percentage annual increases in production capacity over multiple decades, which in turn require long-term capital investment, reliable feedstock supply chains and policy frameworks that provide revenue certainty for investors. The $4.3 billion cost to airlines for 0.8 percent of their fuel needs also illustrates the current price premium of SAF over conventional jet fuel, which acts as a structural barrier to voluntary adoption at scale without either mandates, subsidies or carbon pricing that changes the relative economics.

The IATA assessment confirms that supply-side failures rather than demand constraints are the primary bottleneck, with the industry's willingness to pay demonstrated by the billions already flowing to SAF despite its premium pricing. Oil companies' lack of investment in SAF production capacity despite their financial resources and infrastructure advantages is identified as a significant obstacle, suggesting that the fossil fuel industry's commercial incentive structure does not currently favour redirecting capital toward aviation fuel alternatives that would reduce long-term demand for their primary products.

 

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IATA's Four-Point Acceleration Agenda

 

IATA is calling for coordinated action across four priorities to accelerate SAF scale-up. The first is expanding renewable energy supply to underpin SAF production and ensure sufficient feedstocks and clean energy are available for the diverse production pathways including power-to-liquid, biogenic and waste-based routes. The second is ensuring open access to fuel infrastructure including pipelines, storage and airport fuel systems to enable fair competition and efficient distribution, addressing the concern that incumbent infrastructure operators could restrict access to limit competition with conventional jet fuel.

The third priority is strengthening policy support through effective sequencing of production incentives and investment frameworks that provide certainty and reduce risk before any mandates are imposed. IATA's emphasis on sequencing reflects the industry's position that mandates imposed before sufficient production capacity exists simply impose costs on airlines without creating the market conditions needed to stimulate investment. The fourth priority is enabling a global SAF market through harmonised standards and a book-and-claim system that makes SAF accessible to airlines and producers regardless of their location, transforming what is currently a fragmented set of local markets into a global commodity market that can attract the scale of investment the industry's net zero commitment requires.

 

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Outlook for SAF Market Development

 

The combination of persistent production disappointment, oil company disengagement and policy sequencing failures identified by IATA points to a structural market failure in SAF that will require more decisive government intervention than has been deployed to date. The European Union's ReFuelEU Aviation framework and similar mandates in the United Kingdom, India and other jurisdictions provide demand certainty but without corresponding production incentives risk simply shifting SAF supply from non-mandated markets to mandated ones without increasing global production. The United States Inflation Reduction Act's SAF tax credits have provided meaningful production incentives but their long-term continuity faces political uncertainty.

Whether the global aviation industry can bridge the gap between 0.8 percent and 65 percent SAF penetration by 2050 will depend on a fundamental acceleration of both policy ambition and private capital investment in SAF production capacity across multiple technologies and geographies. Sustained failure to close this gap would place the aviation industry's net zero commitment at serious risk and create growing pressure for demand-side measures including carbon pricing, flight restrictions or differentiated taxation that would affect airline economics more directly than SAF mandates alone. The next five years are critical for establishing whether voluntary industry commitment combined with selective government policy can deliver the investment needed to put SAF production on a credible trajectory toward the 2050 target.

 

 

Source: IATA