Finance
EU's 'green' fuel mandate costly and not helping environment, IATA says
Published by Global Banking & Finance Review®
Posted on July 16, 2025
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on July 16, 2025
2 min readLast updated: January 22, 2026
IATA criticizes the EU's sustainable aviation fuel mandate as costly and ineffective, citing low regional supply and increased fuel costs.
By Jun Yuan Yong
SINGAPORE (Reuters) -The International Air Transport Association on Wednesday stepped up criticism of the European Union's sustainable aviation fuel mandate as a costly initiative that is not helping the environment as regional supplies there remain low.
"The idea that you're buying sustainable fuel and then transporting it to use in Europe isn't the right way to do it, because you're clearly increasing the carbon footprint of that fuel as a result of the transportation costs," IATA's director-general Willie Walsh said at a media roundtable in Singapore.
IATA estimated in June that production of SAF, which is considered a low-carbon replacement for traditional jet fuel, is expected to reach 2 million metric tons, or 0.7% of airlines' fuel consumption, in 2025.
"Mandating the use of a product that isn't available doesn't lead to any environmental benefit," Walsh said, adding that fuel companies that have an obligation to produce SAF are also increasing the cost of traditional jet fuel.
By IATA's assessment, he said "the cost that they're charging is way in excess of the actual cost of the limited supplies of sustainable fuel."
"The EU in effect has facilitated monopoly suppliers to increase prices with no environmental benefit," said Walsh, adding that the region needs to re-evaluate its SAF targets.
Under the ReFuelEU Aviation requirement, airlines need to have a 6% SAF blend in their jet fuel usage by 2030. The EU is offering some subsidies for SAF purchases by airlines, Reuters reported in June.
On the supply front, at least five SAF projects in Asia, outside of China, have started up or are earmarked to start production this year, targeting exports regionally and to Europe. Singapore is among key exporters of the green fuel to the EU.
Walsh also questioned the use of palm oil as a means to produce sustainable fuel.
"I think that you could argue there is sustainable palm oil and there is palm oil that wouldn't be considered sustainable, and I think in some parts of the world there it's too black and white," Walsh said.
We need to have a much more "nuanced approach" to the usage of palm oil as a feedstock and "much more detailed assessment of the sustainability of the feedstock", he added.
(Reporting by Jun Yuan Yong; writing by Trixie Yap; Editing by Muralikumar Anantharaman and Sonali Paul)
IATA criticizes the EU's sustainable aviation fuel mandate as a costly initiative that does not provide environmental benefits.
IATA estimated that production of sustainable aviation fuel (SAF) is expected to reach 2 million metric tons, which is only 0.7% of airlines' fuel consumption.
Walsh questioned the sustainability of palm oil as a feedstock for sustainable fuel, suggesting a need for a more nuanced approach to its usage.
Under the ReFuelEU Aviation requirement, airlines are mandated to have a 6% blend of sustainable aviation fuel in their jet fuel usage by 2030.
IATA believes that the costs charged for sustainable aviation fuel are excessively high compared to the actual costs of the limited supplies available.
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