IATA Calls for Government Support to Enable Aviation's Decarbonization

The International Air Transport Association (IATA) is urging governments to implement the supportive policies needed to expedite aviation's decarbonization, as agreed upon at the Third Conference on Aviation Alternative Fuels (CAAF/3) held in Dubai under the auspices of the International Civil Aviation Organization (ICAO).

CAAF/3 yielded crucial consensus on:

• A global framework to promote Sustainable Aviation Fuel (SAF) production worldwide. The objective is for aviation fuel in 2030 to be 5% less carbon-intensive than the fossil fuel currently used by the industry.
• Recognition that certain nations have the capacity to advance at a faster rate than others.
• Capacity building, a "Finvest Hub," and voluntary technology transfer are among the measures proposed to ensure that all countries can participate in a global SAF market.
• The necessity of a solution that fosters a global SAF market while enabling airlines to attribute the environmental benefits of their SAF purchases to their decarbonization obligations based on a global and robust SAF accounting framework.

"Governments have recognized the critical role of SAF in achieving net zero emissions for aviation by 2050. The CAAF/3 outcomes add a vision for the shorter 2030 timeframe, which is ambitious. To that end, the CAAF/3 agreement sends a clear message to the world that policies enabling genuine progress are required. There is no time to lose. IATA now expects governments to swiftly implement the strongest possible policies to unlock the full potential of a global SAF market with an exponential increase in production," stated Willie Walsh, IATA's Director General.

Demand Signal and Policies to Support SAF Production

This is crucial because airlines' demand for SAF, in line with their commitment to net zero carbon emissions by 2050, far exceeds the current availability of SAF, which is restricted to 0.2% of airlines' jet fuel consumption in 2023. Airlines have sent strong demand signals to the SAF production market:

• All SAF produced in 2022 was purchased, at an additional cost to the industry of around USD 500 million, as SAF is priced at a significant premium over the price of jet fuel.
• There are growing instances of airlines vertically integrating into the supply chain, with some committing equity and risk capital into SAF projects.
• Airlines have entered into forward purchase agreements for SAF worth around a total of USD 45 billion, far exceeding today's SAF availability.

"We need to see governments acting on the CAAF/3 declaration with policies that expand SAF production in all its shapes and forms. Despite unequivocal demand signals, the SAF production market is not developing fast enough. We need SAF everywhere in the world, and to that end, the right supportive policies – policies that can stimulate production, promote competition, foster innovation, and attract financing - must be put in place today," said Walsh.

IATA urges governments to adopt policies to maximize SAF production globally by:

• Enabling producers to fully utilize local feedstock availability
• Enacting positive – not punitive - policies
• Balancing existing and future potential policy support across different energy sources and preferably strive to favor renewable energies and ensure SAFs’ fair share of the latter
• Recognize that the road to success in to transform aviation and achieve reaching net zero carbon emissions is a collective responsibility.

"The goal is maximizing SAF production everywhere with positive, not punitive, policy measures. Airlines are ready with open arms to catch the resulting SAF production. While airlines are at the sharp end of decarbonization, they cannot bear the burden alone. CAAF/3 has again made it clear that aviation's decarbonization will require the wholehearted and united efforts of the entire value chain and governments as we all focus on net zero by 2050. To be perfectly clear, where government money leads, private money will follow. It is absolutely essential that governments play their part, and we will certainly play ours," said Marie Owens Thomsen, IATA's Senior Vice President Sustainability and Chief Economist.