17 major European airlines, including Lufthansa, call on the EU to ease SAF regulations. (Photo: pixabay)
The EU's push to expand the use of sustainable aviation fuel (SAF) has sparked strong backlash from the aviation industry.
On March 27, 17 major European airlines issued a joint statement, arguing that the limited availability and high cost of green fuels are placing a heavy burden on the industry's decarbonization efforts. The International Air Transport Association (IATA) also openly stated that the EU’s SAF targets are simply unattainable.
SAF shortages hinder aviation's path to decarbonization
The 17 airlines, including Ryanair, Lufthansa, Air France-KLM, and the International Airlines Group (IAG), which owns British Airways, have historically been recognized for their sustainability efforts. However, their sudden and vocal criticism of EU policies has drawn significant public attention.
Under the EU’s ReFuelEU Aviation Initiative, flights departing from EU airports must blend a certain percentage of SAF into their fuel supply. The target for 2024 is set at 2%, increasing to 6% by 2030 and reaching 70% by 2050. However, SAF currently costs three to five times more than conventional jet fuel and accounts for just 0.3% of global aviation fuel supply, posing a major challenge to the industry's decarbonization goals.
The joint statement cited a recent report from Steer Economics, which highlighted the financial burden on members of Airlines for Europe (A4E), the region’s largest airline association. Compliance with regulations has driven costs up by 200% over the past decade, reaching a total of €15 billion (about $16.1 billion USD) by 2024—an amount sufficient to purchase 300 new fuel-efficient aircraft.
European airlines are now calling on the EU to ramp up SAF production or relax regulatory measures to prevent them from falling behind global competitors. IATA Director General Willie Walsh warned, "We can't just stand back and pretend that these targets are meaningful and can be achieved. They were never going to be capable of being achieved."
Despite their criticism, airlines reaffirmed their commitment to achieving net-zero emissions by 2050. Meanwhile, the European Commission remains firm on its SAF targets. EU Transport Commissioner Apostolos Tzitzikostas stated that discussions with airline executives will be arranged to better understand their concerns.
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SAF and other regulations have increased environmental costs for airlines. (Image: Unsplash)
SAF production plans slashed by 50% as costs rise
After U.S. President Donald Trump significantly scaled back climate action, calls from European businesses for the EU to ease sustainability obligations have been growing. Stricter emissions regulations for the automotive industry have already been delayed, and the aviation sector is also hoping for a reprieve.
Besides, A new Boston Consulting Group (BCG) report has raised further concerns about SAF supply shortages. According to the report, under current industry trends, SAF production will be insufficient to meet airline decarbonization targets by 2030. Bio-based SAF (Bio-SAF) is expected to fall 30% short of demand, while synthetic SAF (e-SAF) will require a 45% increase in production to meet targets.
BCG surveyed 200 aviation suppliers with over 500 senior executives, finding that rising energy and operational costs have forced SAF production plans to be cut by 50 to 70%. Slow regulatory approvals and economic uncertainty have also led many companies in the SAF supply chain to adopt a wait-and-see approach.
The report suggests that in addition to regulatory mandates, carbon pricing could help bridge the price gap between fossil fuels and SAF. By creating financial incentives, carbon pricing could drive demand and encourage long-term investment in SAF production.
Source: Financial Times, Reuters, BCG, A4E
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