SAF Output Doubled, So Why Is IATA Sounding Alarms?

The aviation industry just hit a major milestone. Global sustainable aviation fuel production doubled in 2025, reaching 1.9 million tonnes compared to 1 million tonnes the year before. That's real progress. But according to the International Air Transport Association (IATA), the path forward needs a serious course correction if aviation wants to hit its 2050 net-zero targets.

The message from IATA's December 2025 report is clear: production incentives work better than mandates. And regions like North America, where incentive-based policies dominate, are proving that point with real results on the ground.

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The Numbers Tell the Story

IATA's latest data shows SAF now represents 0.6% of total jet fuel consumption globally. By 2026, that figure is projected to reach 0.8%. While modest, the underlying growth signals real momentum for the clean aviation fuel sector.

The U.S. tells a particularly encouraging story. American SAF production capacity jumped from 2,000 barrels per day at the start of 2024 to 30,000 barrels per day by early 2025, a 15-fold increase in just 12 months.

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IATA's Call for Smarter Policy Design

IATA isn't asking governments to back off. They're asking them to back smarter approaches. The association points to the Inflation Reduction Act's 45Z Clean Fuel Production Tax Credit as a model that actually drives production rather than just adding compliance costs.

The contrast between policy approaches is stark. In the U.S., production incentives have helped new facilities come online across California, Texas, and Nevada. Phillips 66 completed its 10,000 barrel-per-day SAF project in Rodeo, California, while Diamond Green Diesel added 15,000 barrels per day from Port Arthur, Texas.

What's Working in North America

The U.S. approach combines federal tax credits with state-level programs that encourage investment rather than penalize non-compliance. This has attracted significant private capital into the sector.

Recent U.S. SAF Production Milestones

1. XCF Global's New Rise Reno facility has produced over 2.5 million gallons of renewable fuels since commercial operations began in February 2025
2. Calumet's Montana Renewables has become North America's largest SAF producer using Topsoe's HydroFlex technology
3. Par Pacific in Hawaii is preparing to deliver locally made SAF to Hawaiian and Alaska Airlines in early 2026

Major logistics companies are committing to long-term SAF purchases. DHL recently signed a binding contract with Neste for 50 million liters of SAF for 2026. FedEx has started using SAF at Chicago O'Hare and Miami International airports.

The Path Forward Needs Balance

IATA's chief economist emphasized that the current trajectory, while imperfect, can be corrected with the right policy adjustments.

The good news? Investment keeps flowing. Companies like AIR COMPANY recently raised $69 million in Series B funding to advance CO2-derived SAF technology. Avfuel led the round, signaling long-term confidence from the supply chain.

Where the Industry Goes From Here

Aviation's path to net-zero by 2050 requires SAF to contribute roughly 65% of emissions reductions needed, according to IATA. Getting there means scaling production while bringing costs down to competitive levels.

The foundations are being laid. Green hydrogen projects are advancing across the country, providing essential feedstock for e-SAF production. Direct air capture technology is maturing, offering pathways to produce synthetic fuel from atmospheric carbon.

The industry isn't asking for less ambition. It's asking for policies that deliver results. With production capacity expanding and private investment flowing in, the SAF sector is poised for growth. The question now is whether policymakers will design frameworks that accelerate that growth.