Airlines worldwide are beginning to pass the rising cost of Sustainable Aviation Fuel (SAF) directly to passengers, with European carriers like Lufthansa adding up to 72 euros per flight. This shift comes as governments implement new mandates to decarbonize air travel, a sector projected to increase its carbon footprint significantly, according to the International Air Transport Association. The economic pressure on carriers is immediate.
The European Union and the United Kingdom initiated the world's first mandates for sustainable aviation fuel in January 2025. These regulations compel fuel suppliers to blend a minimum of 2% SAF with conventional kerosene. This blending requirement is not static; it will progressively escalate, aiming for 32% in the EU and 22% in the UK by 2040.
Such policies represent a tangible effort to curb the aviation sector's carbon footprint, which currently accounts for approximately 2.5% of all energy-related emissions. That share is expected to rise as other transport sectors transition to electric power, a technological leap still distant for commercial aircraft. Increasing demand for air travel will also play a role.
These mandates establish a new global standard. Sustainable Aviation Fuel offers a compelling solution, capable of reducing emissions by 50% to nearly 100%, depending on its production method. Critically, it requires no modifications to existing aircraft.
The fuel can be manufactured from various raw materials, known as feedstocks, using several techniques. Today, the Hydroprocessed Esters and Fatty Acids (HEFA) process dominates production. This refining method extracts oxygen from the fat molecules of natural oils and fats, replacing it with hydrogen.
The resulting HEFA fuel finds applications beyond aviation, but its role in jet fuel is growing. Follow the supply chain to understand the global implications. Used cooking oil (UCO) stands as the most common feedstock for SAF, especially within Europe.
Policies here promote UCO's use as a recycled waste product. This approach avoids competition for land with food production, a concern associated with virgin oils like soy or palm. Other nations prioritize locally available feedstocks.
The United States, for instance, focuses on soy. Brazil leverages palm oil. Both agricultural powerhouses also anticipate substantial SAF production by converting ethanol derived from corn or sugarcane, another type of drop-in fuel known as alcohol-to-jet.
These regional preferences shape global trade flows. SAF production is not limited to crops or organic waste. Synthetic fuels, termed e-SAF or power-to-liquid SAF, represent another pathway.
These are synthesized from two gases: green hydrogen, generated using renewable electricity, and carbon dioxide captured from the atmosphere or industrial processes. E-SAF can reduce emissions by up to 90% compared to fossil jet fuels. However, its manufacturing cost remains exceptionally high, creating a significant barrier to widespread adoption.
Scaling this technology presents a major hurdle. Despite these technological pathways, SAF constituted only 0.3% of global jet fuel production in 2024, a figure the International Air Transport Association (IATA) described as “disappointing.” IATA projects this figure will reach 0.7% in 2025. The numbers on the shipping manifest tell the real story of current uptake.
The primary obstacle to broader deployment is cost. SAF currently sells for two to seven times more than traditional jet fuel. This price disparity stems from the limited availability of feedstocks, particularly UCO, and the challenges associated with achieving cost-efficient production through economies of scale.
Furthermore, fossil fuel-based jet fuel benefits from widespread tax exemptions, artificially lowering its market price. This creates an uneven playing field. Governments are adopting different strategies to expand the market for cleaner aviation fuels.
Some, like the EU and UK, employ mandates. Singapore and Brazil will also implement SAF mandates in the coming years. Major aviation hubs, including Japan and China, are planning to introduce their own targets.
In contrast, the United States has chosen a different path, opting for direct subsidies and tax credits to stimulate SAF production rather than imposing blending requirements. This divergence in policy approaches highlights varied economic and political considerations across major economies. Trade policy is foreign policy by other means.
Airline executives have voiced concerns regarding the feasibility of these ambitious targets. In March, the chief executive officers of Ryanair, International Airline Group (IAG), Lufthansa, and Air France-KLM collectively stated that the EU's 6% SAF requirement for 2030 would be impossible to meet. They cited the high cost and scarcity of the fuel.
Luis Gallego, CEO of IAG, the parent company of British Airways and Iberia, called for an urgent EU aviation strategy to ensure SAF becomes available at competitive prices, Reuters reported. Without such a strategy, he suggested, “the only realistic solution is to move the 2030 SAF mandate to the right.” The EU responded by maintaining that its SAF targets were “realistic and feasible.” This disagreement underscores the tension between regulatory ambition and market realities. Beyond the cost of production, the integrity of the SAF supply chain presents another complex challenge.
Governments and the International Civil Aviation Organization require certification to verify the sustainability of any given batch of SAF and its raw materials. The industry-led ISCC (International Sustainability and Carbon Certification) operates the world’s leading certification system. EU regulators utilize ISCC certificates to confirm the origin and sustainability of SAF produced and used within the bloc.
Third-party auditors, approved by ISCC, inspect SAF producers and raw material traders globally. If these entities meet standards regarding feedstock origins and carbon savings, they receive ISCC approval. The system is designed to provide assurance.
However, guaranteeing the sustainability of feedstocks across complex global supply chains has proven difficult. For UCO, which is a key feedstock, suppliers at the point of origin—such as restaurants and individuals—are required to complete a self-declaration form. The system relies on their honest assertion that the product is indeed waste oil, repeatedly used and no longer suitable for cooking.
This honor system has vulnerabilities. This is where the numbers on the shipping manifest can diverge from reality. The ISCC verification system has faced criticism from European industry members and national regulators for failing to detect cases of fraud in biodiesel supplies.
In 2024, the ISCC conducted 79 “integrity assessments,” with approximately two-thirds specifically targeting Asia-based suppliers. These assessments independently monitored the work of auditors. A third of the analyzed cases revealed violations of certification requirements.
This led to the withdrawal of 11 certificates. Such findings point to systemic issues in verifying feedstock provenance, particularly in regions where supply chains are opaque or regulatory oversight is less stringent. The implications for the credibility of SAF as a truly sustainable fuel are significant.
With airlines now paying a substantial premium to incorporate SAF into their airport fuel supplies, some have started to transfer this extra cost to passengers. Air France-KLM and Lufthansa have introduced mandatory SAF levies on tickets. The German flag carrier's charge can reach up to 72 euros ($82) per flight, varying by route and fare class.
This directly impacts the consumer. Singapore, positioning itself as a regional SAF hub, will implement a SAF levy on travelers departing the country starting in 2026. All departing flights will be required to carry 1% SAF from that point.
Preliminary estimates from the Civil Aviation Authority of Singapore suggest economy-class passengers might incur an additional S$3 ($2.30) levy for short-haul flights and S$16 ($12.40) for long-haul journeys. These costs, though seemingly small per ticket, aggregate to substantial sums for airlines and represent a new burden for travelers. Beyond mandatory charges, a growing number of airlines offer customers the option to pay a voluntary SAF charge.
This helps offset the carbon footprint of their journey. British Airways, for example, encourages members of its loyalty program to make such contributions, allowing them to pay with and earn points. Vueling, a low-cost Spanish airline also owned by IAG, allows passengers to contribute an amount equivalent to the cost of 2% of the total fuel needed for their destination, provided in the form of SAF.
Vueling then matches this contribution. These voluntary schemes aim to engage environmentally conscious consumers, but their overall impact on SAF uptake remains limited compared to mandates or subsidies. Why It Matters: The global push for Sustainable Aviation Fuel directly impacts consumers through rising airfares and new ticket levies.
For the aviation industry, it represents a substantial operational cost increase and a complex supply chain challenge. The integrity of SAF certification systems, particularly concerning feedstock origins like used cooking oil, is critical for the credibility of decarbonization efforts. Without robust verification, the environmental benefits claimed by SAF could be undermined, potentially leading to accusations of greenwashing.
This shift also reshapes international trade dynamics as countries vie for feedstock resources and develop their own production capacities, influencing agricultural markets and energy policy decisions worldwide. The move toward SAF is a test of global supply chain resilience and regulatory effectiveness in meeting ambitious climate targets while managing economic realities. Key Takeaways: - Global airlines are passing the increased cost of Sustainable Aviation Fuel (SAF) to passengers through new levies and higher ticket prices. - Mandates in Europe, Singapore, and Brazil aim to boost SAF use, but current production is far short of targets, accounting for only 0.3% of global jet fuel in 2024. - The primary barrier to SAF adoption is its high cost, which is two to seven times that of conventional jet fuel, driven by limited feedstock availability and production scale challenges. - A leading certification system, ISCC, found widespread fraud in SAF feedstock supply chains, particularly among Asia-based suppliers, casting doubt on sustainability claims.
Looking ahead, the tension between ambitious SAF mandates and the realities of production capacity, cost, and supply chain integrity will intensify. The International Energy Agency (IEA) projects that existing and advanced-stage SAF projects will meet only 2%-4% of jet fuel demand by 2030, a figure well below the trajectory needed for the sector to achieve net-zero emissions by 2050. Policymakers will face ongoing pressure from airlines and fuel producers for increased financial support, especially for expensive e-SAF technologies.
The effectiveness of certification bodies like ISCC in combating fraud will determine the long-term credibility of SAF. Watch for further adjustments to mandate timelines and potential shifts in government subsidy programs as the global aviation industry navigates this complex transition.
Key Takeaways
— - Global airlines are passing the increased cost of Sustainable Aviation Fuel (SAF) to passengers through new levies and higher ticket prices.
— - Mandates in Europe, Singapore, and Brazil aim to boost SAF use, but current production is far short of targets, accounting for only 0.3% of global jet fuel in 2024.
— - The primary barrier to SAF adoption is its high cost, which is two to seven times that of conventional jet fuel, driven by limited feedstock availability and production scale challenges.
— - A leading certification system, ISCC, found widespread fraud in SAF feedstock supply chains, particularly among Asia-based suppliers, casting doubt on sustainability claims.
Source: Climate Home News
