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Governments should incentivise SAF production, says IATA

IATA is calling for similar incentives used to drive the transition from electricity to renewable energy

The International Air Transport Association (IATA) has called for governments to urgently introduce large-scale incentives to expand the use of sustainable aviation fuels (SAF) as the aviation industry pursues its commitment to achieving net zero carbon emissions by 2050.

To fulfil aviation’s net zero commitment, current estimates are for SAF to account for 65% of aviation’s carbon mitigation by 2050. That would require an annual production capacity of 449 billion litres of SAF.

Investments are in place to expand SAF annual production from the 125 million litres produced in 2021 to 5 billion by 2025, but this is not enough to achieve aviation’s net zero goals.

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Speaking at the 78th IATA Annual General Meeting in Doha, Qatar, IATA director general Willie Walsh said: “Governments don’t need to invent a playbook. Incentives to transition electricity production to renewable sources like solar or wind worked. As a result, clean energy solutions are now cheap and widely available. With similar incentives for SAF, we could see 30 billion litres available by 2030. Though still far from where we need to be, it would be a clear tipping point towards our net zero ambition of ample SAF quantities at affordable prices.”

Despite SAF costing between two to four times the price of conventional jet fuel, airlines purchased the 125 million litres of SAF that was available in 2021.

More than 38 countries currently have SAF-specific policies that clear the way for the market to develop

Taking their cue from these policy measures, airlines have entered into US$17 billion of forward-purchasing agreements for SAF, but the SAF market more stimulation. The United States is setting an example for others to follow. Its SAF production is expected to reach 11 billion litres in 2030 on the back of heavy government incentives.

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In October 2021, IATA member airlines came together and took the decision to commit to achieving net zero emissions by 2050. Achieving net zero emissions will be a huge challenge as the expected scale of the industry in 2050 will require the mitigation of 1.8 gigatons of carbon.

To provide the right set of consistent policies and long-term stability needed for investments, the aviation industry will need governments to support the adoption of a long-term climate goal for air transport at the 41st Assembly of the International Civil Aviation Organisation (ICAO), being held in September 2022. 

The IATA maintains that this climate goal is critical to back up the industry’s decarbonisation ambitions and would provide a global multilateral framework for action without distorting competition.

For more information, visit www.iata.org

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