Core Insights - The International Air Transport Association (IATA) projects that sustainable aviation fuel (SAF) production will reach 2 million tons (25 billion liters) by 2025, accounting for 0.7% of total airline fuel consumption [1] - IATA's Director General Willie Walsh indicates that this increase in SAF production will lead to an additional $4.4 billion in global airline fuel costs, emphasizing the need for rapid production scaling and efficiency improvements [1] - The majority of SAF is currently directed towards Europe due to the EU and UK’s mandatory quota policies effective from January 1, 2025 [1] Industry Dynamics - The cost of SAF in Europe has doubled due to compliance fees charged by SAF producers or suppliers, with an estimated cost of $1.2 billion for 1 million tons of SAF needed to meet the EU quota by 2025 [1] - Compliance fees are expected to add an additional $1.7 billion, which could have been used to reduce 3.5 million tons of carbon emissions [1] - Walsh highlights the challenges of implementing mandatory quotas in an immature market lacking safeguards against unreasonable market behavior [1] Policy Recommendations - To support the global SAF market, IATA has introduced two initiatives: a SAF registry managed by the Civil Aviation Decarbonization Organization (CADO) for tracking SAF purchases and emissions reductions, and a SAF supply-demand matching platform [2] - IATA urges governments to focus on effective policies, including comprehensive energy policies that incorporate SAF, and to eliminate disadvantages faced by renewable energy producers compared to large oil companies [2] - The organization emphasizes the importance of ensuring the success of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) as the only market mechanism to address international aviation carbon emissions [2] Membership and Influence - IATA represents 350 member airlines worldwide, accounting for over 80% of global international passenger traffic [3]