Aviation's green fuel crisis: SAF covers just 0.8% of consumption, jet fuel prices double — IATA AGM 2026

Tashkent, Uzbekistan (UzDaily.com) — Five years after the global aviation industry committed to reaching net-zero carbon emissions by 2050, its primary instrument for doing so — sustainable aviation fuel — covers less than one percent of worldwide jet fuel consumption. The conventional fuel it is meant to replace has meanwhile nearly doubled in price, supply chains are fracturing under geopolitical pressure, and the regulatory frameworks designed to accelerate the green transition are being described by the industry's own economists as "completely detached from reality."

That was the picture presented on Saturday at IATA's SAF and Net Zero press briefing on the sidelines of the organization's 82nd Annual General Meeting in Rio de Janeiro, by Marie Owens Thomsen, IATA's senior vice president for sustainability and chief economist; Hemant Mistry, director of energy transition; and Preethi Jain, head of net-zero programs.

Five years on: the SAF promise has not been kept

IATA estimates global SAF production will reach approximately 2.4 million tonnes in 2026. That figure sounds substantial until measured against actual need: it represents just 0.8 percent of total aviation fuel consumption this year, at a cost to airlines of $4.3 billion for fuel covering less than one percent of their requirements.

"This is, by all accounts, another disappointing year for SAF production," IATA Director General Willie Walsh said. "Five years after committing to net zero by 2050, SAF will account for just 0.8 percent of airlines' jet fuel consumption this year. The path to covering 65 percent of our needs by 2050 becomes harder with every year of poorly designed government policy and the apparent indifference of oil companies."

The gap becomes sharper when production capacity is factored in: total installed capacity in 2026 is expected to exceed 9 million tonnes — meaning existing infrastructure could produce more than three times current actual output. The problem is not technology or equipment.

The problem is economics and policy

Renewable fuel producers favor more profitable products, notably renewable diesel. The price premium on SAF remains prohibitive. Mandates were introduced before production incentives had made SAF economically attractive for manufacturers. And production capacity is distributed unevenly, with the majority concentrated in North America, Europe and Asia-Pacific, while resource-rich regions — South America and Africa — lag significantly behind.

Jet fuel shock: a crisis on top of a crisis

The backdrop to all SAF-related difficulties is a conventional jet fuel market under acute stress. Following the effective closure of the Strait of Hormuz as a result of the Iranian conflict in late February 2026, aviation fuel prices have risen to levels that IATA's data describes as "a completely different order of magnitude" relative to crude oil price movements.

In November 2025, the average global jet fuel price stood at approximately $96 per barrel. By April 2026 it had reached $188 per barrel — nearly double — and averaged $158 per barrel in May. The jet fuel crack spread relative to crude oil has widened from its historical range of $20–30 per barrel to $40–70 and above, reflecting acute fuel scarcity and supply chain bottlenecks.

Europe is among the most exposed regions: before the strait's closure, 24 percent of Europe's jet fuel came from the Persian Gulf. Europe's own jet fuel production has meanwhile fallen 13 percent compared with 2019, and in the United Kingdom by 42 percent. Africa is in an even more vulnerable position, with 33 percent of its aviation fuel previously sourced from the Gulf.

The Brazilian paradox

Brazil uses an import parity pricing mechanism for jet fuel, setting prices as though all fuel were being imported from the United States Gulf Coast. In practice, only around 16 percent of jet fuel consumed in the country is actually imported. Airlines operating in Brazil are paying phantom import costs on 84 percent of the fuel they use.

In the current crisis, that premium has risen from $10 to $19 per barrel, adding approximately $105 million in additional costs to airlines. Total estimated unjustified overpayment stands at $220 million. IATA called these costs "unacceptable."

E-SAF: mandates on an empty stage

If the conventional SAF picture is disappointing, the state of e-SAF — produced by converting renewable electricity into liquid fuel — is alarming. The European Union and the United Kingdom have jointly set a mandate requiring approximately 0.6 million tonnes of e-SAF production by 2030.

As of May 2026, operational and under-construction capacity worldwide stands at approximately 0.02 million tonnes — a gap of thirty-fold. Only one commercial e-SAF production facility is currently operating globally. Reaching the mandated volume would require approximately 20 industrial-scale plants. Not a single final investment decision on an e-SAF facility has been taken in the past year.

"The e-SAF targets for 2030 set by the UK and EU are not just unrealistic — they are completely detached from reality," Owens Thomsen said. "Introducing mandates before production conditions exist is an irresponsible market-building strategy. It will only push prices higher."

The cost of non-compliance in the absence of e-SAF supply could reach €8 billion in 2030 and €16 billion in 2031.

IATA is insisting on the correct sequencing: first, low-hanging fruit — co-processing, public procurement, open access to airport fuel infrastructure; then leveling the playing field by removing oil and gas subsidies, harmonizing standards and supporting new technologies; only then building a global market; and mandates last.

Book-and-claim and the CADO registry: from private deals to a global market

The SAF market in its current form is not a market so much as a collection of private deals with minimal volumes, no price transparency and a physical tie to specific airports. Airlines can only receive credit for SAF where the fuel is physically available, concentrating it in a handful of major hubs, limiting competition and raising costs.

IATA's proposed solution is a book-and-claim system under which an airline purchases a certificate for a given volume of SAF produced anywhere in the world and credits the corresponding emissions reduction regardless of where it refuels. This severs the link between environmental credits and physical supply logistics.

To operationalize this system, IATA has established the CADO SAF registry, now housed within CADO, a Canadian international non-profit. As of June 2026, 146 organizations participate in the registry, which is free to use. The registry interacts with regulators across three geographic regions and prevents double-counting of SAF units.

CORSIA: a global agreement under quiet threat

In 2026, CORSIA — the Carbon Offsetting and Reduction Scheme for International Aviation — involves 130 states and approximately 700 airlines. In the current first phase (2024–2026), airlines are required to offset emissions exceeding 85 percent of 2019 levels. Total required offsets in 2026 are estimated at 213 million tonnes of CO₂. The supply of eligible emissions units stands at only around 38 million tonnes — a shortfall of approximately 175 million tonnes. Only ten countries have generated emissions unit supply.

IATA acknowledged that CORSIA is being undermined by "a combination of misunderstanding, insufficient awareness and isolated instances of unilateral sabotage." The parallel existence of the European Emissions Trading System for intra-European flights creates overlapping obligations. IATA's position is unambiguous: aviation requires a single global system, and any fragmentation harms the global network.

In response to the acute supply shortage, IATA has established the CORSIA Support Alliance, calling on states, airlines, project developers and carbon market participants to join forces in providing practical assistance to host countries in generating emissions unit supply. CORSIA marks its tenth anniversary this year.

Passengers: ready for change

An IATA passenger survey conducted in April found that 89 percent of respondents believe the aviation industry should continue reducing emissions even if governments retreat from their climate commitments. Two-thirds said they are willing to pay more for sustainable travel, and 88 percent expect ticket prices to rise as a result of decarbonization investment.

Passengers prioritize tangible solutions: 25 percent favor funding SAF, 23 percent favor emissions-reduction technology, and only 10 percent favor taxes. Nearly half of passengers already factor carbon footprint into their flight selection.

Brazil's opportunity

The briefing closed with a section focused on the host country. IATA calculates that Brazil's biomass potential for SAF production exceeds 120 million tonnes by 2030 and 180 million tonnes by 2050. Using only established technology pathways — sugarcane ethanol, vegetable and waste oils — the country could produce approximately 12 million tonnes of SAF per year by 2030, covering its own aviation needs and becoming a major exporter. IATA estimates Brazil's share of global biomass feedstock reserves at 10 percent.

The existing policy framework — the RenovaBio program, the Future Fuel law, the National Energy Transition Policy — provides the necessary foundation. Around 15 SAF projects are at various stages of development. However, IATA explicitly characterized the pace of implementation as insufficient and the price distortion created by the import parity mechanism as an active obstacle for the airlines that must become the primary buyers of this fuel.

IATA's call to Brazilian lawmakers: align financial incentives with rigorous sustainability criteria consistent with CORSIA; eliminate the pricing distortion; and avoid repeating Europe's mistake of introducing mandates ahead of supply.

The 82nd IATA Annual General Meeting continues in Rio de Janeiro through June 8. The organization's financial forecasts are scheduled for publication on June 7.