IATA Urges Stronger EU Aviation Plan as SAF Costs Persist

The International Air Transport Association (IATA) said the European Commission’s Sustainable Transport Investment Plan (STIP) represents meaningful progress in tackling structural barriers to aviation decarbonization but warned that several provisions still fall short of industry needs. IATA Director General Willie Walsh noted, “We welcome the Commission’s recognition of market challenges stemming from SAF mandates that were flawed from the outset—particularly the price gap between sustainable and conventional fuels—and the need for strong investment support.”

Walsh said measures such as extending SAF support under the EU ETS, exploring tradable SAF systems, simplifying reporting requirements, improving access to sustainability certificates through the Union Database, and advancing dual conformance of sustainable fuels under EU RED and CORSIA are positive steps. However, he cautioned, “We need to see how words turn into reality. We are concerned that the STIP falls short of critical industry expectations.”

A core element of the plan is the Commission’s acknowledgement of mechanisms enabling tradable SAF certification, including book-and-claim systems. IATA said these tools are essential to ease supply constraints across European airports and stimulate investment in new production capacity. A continent-wide book-and-claim system, it added, would also help ensure a level playing field for operators in different regions. IATA urged the EU to amend the ETS Directive in its upcoming review to allow purchase-based SAF claims and stressed that the proposed intermediary mechanism must be fully compatible with book-and-claim while accelerating enhancements to the Union Database.

IATA emphasized that demand-side factors must remain a priority, as airlines need predictable pricing to incorporate SAF into daily operations. Current rules, the association said, expose operators to higher costs for both conventional jet fuel and SAF. STIP should balance investment incentives with market transparency to support supply and demand growth. Strengthening the Union Database is also essential to establishing an open and functional SAF market.

The association further criticized STIP’s bias toward e-SAF over biofuels, arguing that Europe has “significant untapped potential for sustainable feedstocks,” including residues and waste streams. IATA said a technology-neutral approach is necessary to scale all SAF pathways and warned that limiting support to e-SAF could slow deployment, raise costs, and hinder progress toward producing 500 million tons of SAF by 2050.

Walsh reiterated that IATA “stands ready to work constructively with the Commission to address these gaps and ensure that the STIP delivers a coherent, investment-ready framework,” stressing the need for clear timelines for upcoming EU ETS and ReFuelEU reviews. He said aviation remains committed to reaching net-zero emissions by 2050, but success will require alignment between policy design, industry capabilities, and the scale of the decarbonization challenge.

Walsh also warned that airlines are absorbing most of the financial burden created by the EU’s ReFuelEU SAF mandate. The concerns follow data from the European Union Aviation Safety Agency showing SAF accounted for just 0.6% of fuel supplied at EU airports in 2024—below this year’s 2% requirement and far from the 6% target for 2030. He noted that the industry’s transition to net zero will require annual investments of about US$174 billion, or nearly US$35 per passenger, compared with average profits of roughly US$7 per traveler, underscoring the growing financial strain on operators.