IATA says incentives needed to increase SAF production

Airlines have signed $17bn of forward-purchasing agreements for SAF; 30 billion litres production possible by 2030.

IATA says incentives needed to increase SAF production
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International Air Transport Association (IATA) has called for governments to put in place large-scale incentives to rapidly expand the use of sustainable aviation fuel (SAF) as aviation pursues its commitment to achieving net zero carbon emissions by 2050.

"To fulfil aviation's net zero commitment, current estimates are for SAF to account for 65 percent of aviation's carbon mitigation in 2050. That would require an annual production capacity of 449 billion litres. Investments are in place to expand SAF annual production from the current 125 million litres to 5 billion litres by 2025. With effective government incentives, production could reach 30 billion litres by 2030, which would be a tipping point for SAF production and utilisation," IATA said after its 78th annual general meeting in Doha today.

"Governments don't need to invent a playbook," Willie Walsh, Director General, IATA, said at the AGM. "Incentives to transition electricity production to renewable sources like solar or wind worked. As a result, clean energy solutions are now cheap and widely available. With similar incentives for SAF, we could see 30 billion litres available by 2030. Though still far from where we need to be, it would be a clear tipping point towards our net zero ambition of ample SAF quantities at affordable prices."

In 2021, irrespective of price (SAF is between two and four times the price of conventional jet fuel), airlines purchased every drop of the 125 million litres SAF available, IATA said in its statement. "And already more than 38 countries have SAF-specific policies that clear the way for the market to develop. Taking their cue from these policy measures, airlines have entered into $17 billion of forward-purchasing agreements for SAF."

Incentives to ramp-up production
"The United States is setting an example for others to follow. Its SAF production is expected to reach 11 billion litres in 2030 on the back of heavy government incentives."

Europe, on the other hand, is an example not to follow, the IATA statement added. Under its Fit for 55 initiative, the EU is planning to mandate that airlines uplift 5 percent SAF at every European airport by 2030. "Decentralising production will delay the development of economies of scale. And forcing the land transport of SAF will reduce the environmental benefit of using SAF."

To provide the right set of consistent policies and long-term stability needed for investments, the aviation industry is calling on all governments to support the adoption of a long term climate goal for air transport at the 41st Assembly of the International Civil Aviation Organization (ICAO) this September, the IATA statement said. The climate goal is critical to back up the industry's decarbonisation ambitions and would provide a global multilateral framework for action without distorting competition, the statement added.

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