Need incentives to boost Sustainable Aviation Fuel production, not blending mandate: IATA

Geneva: Sustainable Aviation Fuel (SAF) will help reduce fuel price volatility for the airline industry but incentives rather than a blending mandate are required to boost the production of the fuel, global grouping IATA said on Wednesday.

The International Air Transport Association (IATA) also said that there will be significant positives in making the transition from traditional jet fuel to SAF.

In 2021, around 100 million litres of SAF was produced and the quantum has to jump to 30 billion litres in 2030 and then scale up the production further, as per estimates.

Between 2022 and 2025, renewable fuel capacity is set to grow by more than 400 per cent. "SAF needs to be 30 per cent of that output — 24 Mt (30 billion litres) in 2030 to reach the tipping point," IATA said.

The Indian government is working on mandating blending of jet fuel with SAF as part of efforts to reduce carbon emissions. Against this backdrop, IATA Director Energy Transition Environment & Sustainability Hemant Mistry on Wednesday said that a mandate for blending would not really help increase SAF production.

"If you just give a mandate, all you do is support the opportunity for a handful of suppliers. That does not solve the problem... mandate by itself at this stage wouldn't really help production of SAF because we need incentives to boost production of SAF," he said.

While talking about SAF at a session here, IATA Director General Willie Walsh said there should be greater scaling up for SAF in 2023.

Going forward, there will be less volatility in SAF price compared to significant volatility in oil prices, he added.