Sustainable aviation fuel production in 2024 is estimated to reach 1 million tons, significantly lower than the previous forecast of 1.5 million tons.
The above information was announced by the International Air Transport Association (IATA) on December 10. One million tons of sustainable aviation fuel (SAF) is equivalent to 1.3 billion liters, accounting for 0.3% of global aviation fuel and 11% of global renewable fuel.
Airlines are preparing to fly, October 2021. Image: Giang Huy
This output doubles compared to 2023, but is said to be “disappointingly” slow. The reason is that some SAF production facilities in the US have postponed increasing capacity until the first half of next year.
Mr. Willie Walsh – Director General of IATA – said that governments send “mixed” signals to oil companies, when they continue to receive subsidies to explore and produce fossil fuels. Meanwhile, SAF investors seem to be hoping for a guarantee of easy money before ramping up the factory to full capacity.
“The net profit margin of airlines is only 3.6%, SAF investors need to expect slow and steady profits, not fast and strong. Make no mistake that airlines are eager to buy SAF and investors can profit by seeing the long-term future of decarbonization,” Mr. Willie said.
Sustainable aviation fuel is considered the greatest potential option in reducing CO2 emissions from aviation activities to meet the aviation industry’s commitment to net zero emissions by 2050 according to the The Paris climate agreement, with an ambitious target of reducing industry-wide emissions from the use of this fuel by 65%.
However, the cost of SAF is 2-6 times higher than traditional JET A1 fuel with limited supply, currently only accounting for 0.3% of aviation fuel.
IATA forecasts SAF production in 2025 to reach 2.1 million tons, equivalent to 2.7 billion liters, accounting for 0.7% of aviation fuel and 13% of global renewable fuel capacity.
To reach the net zero emissions target by 2050, IATA analysis shows that 3,000-6,500 SAF manufacturing plants are needed, requiring an average capital investment of about $128 billion per year over 30 years, which is significantly lower compared to investments in the solar and wind markets ($280 billion per year from 2004-2022).