The International Air Transport Association’s (IATA) director-general Willie Walsh has weighed in on the European Union’s (EU) sustainable aviation fuel (SAF) mandate, saying it is a costly initiative that isn’t helping the environment. Walsh made the statement during a media roundtable in Singapore.

IATA Estimates:

• Sustainable aviation fuel (SAF) production reaches 2 million metric tons, or 0.7% of airlines’ fuel consumption, in 2025
• EU airline targets to have a 6% SAF blend in their jet fuel usage by 2030, but production remains low

Walsh, during the roundtable, stated that the cost of SAF is significantly higher than the actual cost of the fuel due to production, storage, and transportation. He also mentioned that airlines would pay twice the cost to produce SAF rather than their traditional jet fuel. The EU mandate was initially established to reduce greenhouse gas emissions, but regional supplies of SAF remain underwhelming, leading Walsh to argue that it has had little to no environmental effect.

“The idea that you’re buying sustainable fuel and then transporting it to use in Europe isn’t the right way to do it, because you’re clearly increasing the carbon footprint of that fuel as a result of the transportation costs,“ Walsh said. “Mandating the use of a product that isn’t available doesn’t lead to any environmental benefit.”

Walsh pointed out that despite efforts to increase SAF production, the demand for the alternative fuel remains limited, resulting in higher production costs and thus higher costs for traditional jet fuel as well.

Other Green Fuel Sources:

1. Natural gas: A common fuel source used in power generation, but not directly related to jet fuel production
2. Algae: Could potentially be used to produce a low-carbon fuel

Walsh has suggested that a more nuanced approach to sustainable fuel sources is needed, particularly when it comes to using palm oil. He noted that some regions may not use palm oil responsibly, resulting in unsustainable practices.

The transport sector is a significant contributor to greenhouse gas emissions, and the introduction of sustainable aviation fuel has been aimed at reducing this impact. However, the low availability of SAF and the high costs of production and transportation have raised concerns about its effectiveness. In response to Walsh’s comments, EU officials said that the implementation of SAF targets aims to reduce emissions, even if it is challenging, and that they will continue to work with airlines and producers to meet the required targets. Singapore is playing a significant role in the production and export of SAF, with at least five SAF projects in the region currently in operation or planned. The city-state aims to become a major player in the low-carbon aviation industry. A revised approach to sustainable aviation fuel may be needed to effectively address environmental concerns. It is imperative to strike the right balance between meeting regulatory targets and addressing the concerns raised by international organizations and stakeholders. The transport sector continues to be an important area of focus for reducing greenhouse gas emissions.

It is crucial to note that the EU mandating the use of sustainable aviation fuel, known as ReFuelEU Aviation, aims to reduce greenhouse gas emissions and has already led to some airlines exploring alternative fuel sources. However, significant challenges remain, particularly regarding production costs and availability. Walsh has suggested that a more detailed assessment of the sustainability of sustainable feedstocks is needed to determine whether the current approach to sustainable aviation fuel is effective. He also pointed out that the EU should work with airlines, producers, and other stakeholders to ensure that SAF targets are realistic and achievable. This could involve reviewing and revising the existing SAF targets, and potentially introducing new policies or incentives to support the transition to low-carbon fuels.

“The EU in effect has facilitated monopoly suppliers to increase prices with no environmental benefit,” said Walsh, adding that the region needs to re-evaluate its SAF targets.

Further research and collaboration are necessary to ensure the successful implementation of sustainable aviation fuel, including exploring alternative feedstocks and refining existing production methods to reduce costs and environmental impact.

Potential Directions for Reform

Some potential directions for reform have been proposed to address the challenges faced by the current approach.