Rising Costs Slow Aviation’s Green Shift, IATA Warns Sustainable Fuel Adoption Remains Limited
SINGAPORE: The global airline industry is facing mounting difficulties in its transition to cleaner energy, as high production costs and limited supply continue to restrict the widespread adoption of sustainable aviation fuel (SAF).
Director-General of the International Air Transport Association (IATA), Willie Walsh, said the sector is falling behind its environmental targets, putting long-term climate commitments at risk.
He made the remarks at the Changi Aviation Summit in Singapore, attended by industry leaders and policymakers.
According to Walsh, global SAF production reached only 1.9 million tonnes in 2025, accounting for just 0.6 per cent of total jet fuel consumption, well below earlier projections.
This, he said, highlights the industry’s continued reliance on fossil-based fuel despite growing international pressure to reduce carbon emissions.
Regulatory Mandates Drive Up Prices
Walsh noted that mandatory blending requirements in several major markets have pushed SAF prices significantly higher, discouraging voluntary uptake by airlines.
In the European Union, carriers are required to use two per cent SAF from this year, rising to six per cent by 2030, 20 per cent by 2035, and eventually 70 per cent from 2050.
He explained that SAF currently costs more than twice as much as conventional jet fuel, and in some regulated markets, prices can reach four times higher.
These cost pressures, he said, are adding to the financial strain on airlines still recovering from pandemic-related disruptions.
Singapore’s Pilot Initiative
To boost adoption, Singapore’s aviation authority has launched a voluntary SAF procurement trial involving nine companies through a centralised purchasing platform.
Participants include Google, state investor Temasek Holdings, and national carrier Singapore Airlines.
The initiative aims to lower costs and encourage gradual adoption of sustainable fuel.
From October 1, all flights departing Singapore will be required to use at least one per cent SAF, funded through a levy that is expected to increase airfares.
Long-Term Targets and Structural Barriers
Singapore plans to raise SAF usage to between three and five per cent by 2030, in line with targets set by the International Civil Aviation Organization (ICAO).
Industry analysts argue that without stronger government incentives, tax support, and large-scale investment in SAF production infrastructure, progress will remain slow.
Walsh stressed that a successful green transition requires close cooperation between governments, fuel producers, and airlines.
He warned that failure to accelerate SAF adoption could undermine the aviation sector’s credibility and long-term sustainability.
Overall, the industry now stands at a critical crossroads, where environmental responsibility must be balanced against rising operational costs, with sustainable aviation fuel remaining both a key solution and a major challenge.
-wilayah.com.my
