IATA Flags Policy Gaps Threatening Global SAF Growth: India’s Biofuel Leadership Poised to Transform Aviation and Tourism
The International Air Transport Association (IATA) has issued a sobering alert: Sustainable Aviation Fuel (SAF) production, although set to double in 2025 to 2 million tonnes, still represents just 0.7% of airlines’ total fuel consumption.
The meager supply—and more critically, the inefficient policy landscape—poses a significant risk to aviation’s long-term decarbonization goals and cost-effectiveness.
IATA’s Director General Willie Walsh delivered the message with urgency:
“While it is encouraging that SAF production is expected to double, the current levels are nowhere near enough. Worse, poor policy implementation—particularly in Europe—is inflating SAF costs unnecessarily.”
With global attention on climate change and energy security, IATA’s critique comes at a crucial time. The agency calls for structural reforms in SAF policy and urges governments worldwide to collaborate in scaling sustainable fuel production while protecting airlines from volatile and inflated costs. Notably, India’s rising role as a SAF innovator and biofuel hub stands out as a potential game-changer.
Europe’s SAF Mandates Backfire, Raising Costs
IATA’s concerns stem from the European Union and United Kingdom’s implementation of SAF blending mandates effective from January 1, 2025. These mandates, while meant to incentivize sustainable fuel adoption, are now causing unintended consequences due to premature rollout in the absence of robust supply chains and price controls.
For the one million tonnes of SAF expected to be purchased in Europe this year to meet these mandates:
- Market prices are expected to hit $1.2 billion
- Compliance fees—charged by suppliers—could add an estimated $1.7 billion
“Instead of promoting SAF, Europe’s mandates have made it five times more expensive than conventional jet fuel,” said Walsh. “That $1.7 billion could have abated an additional 3.5 million tonnes of CO₂ emissions.”
The critique underlines a vital policy lesson: premature mandates without price control and production scale-up mechanisms undermine the goal of energy transition and strain aviation economies, particularly in the post-pandemic recovery period.
IATA’s Two Key SAF Initiatives
To mitigate these challenges, IATA is proactively building industry tools to support SAF growth:
- CADO SAF Registry: Managed by the Civil Aviation Decarbonization Organization (CADO), this registry provides a transparent, standardized system for tracking SAF transactions, usage, and emissions reductions. It ensures compliance with global carbon accounting systems like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) and the EU Emissions Trading Scheme
- SAF Matchmaker Platform: This new tool matches SAF demand from airlines with verified supply offers, improving procurement and planning, especially for carriers outside Europe and North America.
Both initiatives aim to streamline SAF adoption, reduce compliance confusion, and promote international alignment.
What Governments Must Do: IATA’s Three-Point Reform Agenda
IATA is calling on governments to act swiftly and strategically by focusing on three priority areas:
1. Equalize Policy for Renewables vs. Fossil Fuels
Renewable energy producers currently operate at a cost disadvantage due to long-standing fossil fuel subsidies, which according to the International Monetary Fund (IMF) and the International Energy Agency (IEA), amount to over $1 trillion globally per year.
IATA urges governments to:
- Redirect a portion of fossil fuel subsidies toward SAF innovation
- Provide capital access, price guarantees, and tax credits to SAF producers
2. Integrate SAF in Broader Energy Policy
Governments must develop a comprehensive approach to energy policy that ensures SAF is:
- Allocated sufficient renewable feedstock
- Supported with shared infrastructure and co-production systems
- Recognized as a priority in national energy and transport strategies
3. Ensure CORSIA Success and Carbon Credit Access
IATA reiterates support for CORSIA as the sole global, market-based mechanism to offset international aviation CO₂. Airlines currently lack access to adequate Eligible Emissions Units (EEUs)—with Guyana being the only country offering carbon credits to airlines under CORSIA.
IATA calls on other states to:
- Make carbon credits available
- Create certification and trading channels
- Harmonize international reporting standards
India’s Emerging Leadership in SAF and Biofuels
India is uniquely positioned to emerge as a global SAF leader—a fact that IATA acknowledges in its SAF market outlook. As the third-largest oil-consuming nation and one of the fastest-growing aviation markets, India’s proactive steps toward sustainable aviation could reshape not just domestic travel but global emissions outcomes.
India’s recent launch of the Global Biofuels Alliance aligns with its G20 Presidency 2023 priorities and signals a national commitment to renewable energy integration. The alliance aims to:
- Establish biofuels as a pillar of global energy transition
- Promote cross-border investments and technology transfers
- Support regulatory frameworks for SAF and other green fuels
The Indian government, through the Ministry of Petroleum & Natural Gas (MoPNG) and the Ministry of Civil Aviation (MoCA), has set a 2% SAF blending target for international flights by 2028. Supporting policies include:
- Guaranteed pricing for SAF producers
- Capital support for infrastructure
- Technical standards for feedstock and lifecycle assessments
In March 2025, IATA partnered with the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and Praj Industries, two major biofuel stakeholders, to implement best practices in SAF production and feedstock validation.
Implications for India’s Travel and Tourism Industry
India’s leadership in SAF policy isn’t just an environmental win—it presents a strategic advantage for tourism and air travel.
According to the Ministry of Tourism, India welcomed 17.4 million foreign tourists in 2023, with forecasts predicting 25 million by 2028. Long-haul travelers increasingly prefer airlines with strong sustainability credentials, particularly in Europe, North America, and East Asia.
Adopting SAF at scale will allow Indian carriers like Air India, IndiGo, and Vistara to:
- Enhance brand reputation in eco-conscious markets
- Comply with EU SAF mandates for incoming international flights
- Attract code-share partnerships and global tourism alliances
Additionally, eco-tourism and green travel packages, supported by SAF-powered routes, can create new revenue streams and sustainable employment in India’s Tier-2 and Tier-3 cities.
The integration of SAF into India’s aviation economy may also enable green corridors linking key tourism destinations like Kerala, Rajasthan, Ladakh, and the Andaman Islands—creating a competitive edge for India as a sustainable destination.
Conclusion: Time for Coordinated Action
IATA’s stark warning makes it clear that policy missteps risk stalling the aviation industry’s decarbonization efforts, and that SAF must be scaled responsibly, affordably, and globally.
India’s progress—through its clear targets, policy backing, and industry partnerships—offers a model for other nations. If supported with the right economic tools and international collaboration, India can be a biofuel powerhouse that transforms not only its own aviation industry but contributes meaningfully to global climate goals.
In the words of IATA’s Willie Walsh:
“The aviation industry is ready. The technology is advancing. But governments must now provide the foundation through smart, effective policies that support—not stifle—the transition to sustainable flight.”
Official Sources Referenced:
- IATA SAF Outlook – 2025
- Ministry of Civil Aviation – India
- Ministry of Petroleum & Natural Gas – Biofuels Policy
- Global Biofuels Alliance – MoPNG
- Executive Office of CORSIA – ICAO
- International Energy Agency – SAF Reports
- Praj Industries
- ISMA – Indian Sugar & Bio-Energy Manufacturers Association
- Ministry of Tourism – India
This article has been republished from Travel and Tour World.