BUSINESS NEWS and maintenance delays. Ian Taylor reports from the association’s Global Media Day in Geneva


Airlines ‘set to face shortage of jet fuel’ as oil refineries close


Airlines could face an increasing squeeze on the supply of jet fuel at some airports in Europe given the rate at which oil refineries are closing, even as they struggle to secure adequate supplies of SAF. That is according to Iata chief


economist and senior vice- president for sustainability Marie Owens Thomsen. She described SAF mandates as “a problem” but said: “There have been big changes even in the fossil fuel market. We have concerns about a shortage of supply at certain airports.” An estimated one in five refineries


are forecast to close by 2035, mainly in Europe, due to falling demand for petrol and diesel as vehicles increasingly switch to electric power. Owens Thomsen noted jet fuel


comprises just 8.7% of refinery output and said: “Oil products compete for refinery capacity and jet fuel demand, being one of the smaller components, won’t be enough to justify refinery capacity. We face a threat of limited access to fossil fuel.” Increased SAF production


would help, she said, although “how we get SAF to airports is potentially a significant sticking point”. However, 59% of renewable fuel


projects announced to date and due to be operating by 2030 have seen “nothing happen” since being announced, according to Owens Thomsen, with 29% in operation and only 12% under construction. She noted: “All the projects would need to start in 2026 to hit existing targets.”


Economist blames SAF profitability for low investment


The failure to invest sufficiently in SAF production is “not about a lack of money” but “how capital is allocated”, Iata chief economist Marie Owens Thomsen has insisted. She noted an estimated


$217 billion was invested in AI in 2025 when “no one knows how much profit it will deliver” and said: “If we could capture that money for SAF production, we could fund all we need to 2036.” Owens Thomsen pointed out


investment in oil earns investors “about a 20% return” when the return on SAF “is below 5%”, arguing: “We need help because of the lower profit margin.”


Marie Owens


Thomsen She said “oil companies just


say there is not enough profit [in SAF]” and suggested: “I don’t know why there isn’t more outrage at the oil companies over this. Every country continues to support producers of fossil fuels, amounting to $1 trillion a year. Imagine if that was put into renewables. It would be a completely different scenario.”


Walsh calls for SAF price review


Iata director general Willie Walsh has called for an urgent review of the UK and EU sustainable aviation fuel (SAF) mandates which came into force last year, arguing they have inflated the price of SAF without stimulating the supply. Walsh highlighted “worrying


developments” and said: “I’m disappointed at the pace of progress. We’re not seeing SAF produced in the volumes we hoped or expected.” He noted: “We said when we


committed to net zero by 2050 that it would be extremely challenging and expensive. It will be more challenging now. The regulation has not been helpful. Mandates have led to huge increases in price [of SAF].” Walsh accused fuel suppliers of


“price gouging and ripping us off”, saying: “If you mandate a product that is in short supply, it will increase


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in price. Airlines that need to comply with the mandates can’t get the supply. Governments will have to review these mandates.” He suggested the UK mandate


target of 10% SAF use by 2030, which some airlines have committed to across their operations, is “now impossible to achieve” and said: “The EU’s 6% SAF target will be challenging, [but] 10% SAF use by 2030 is beyond the reach of most airlines. SAF is not available. A lot of airlines will have to reassess their commitments. “About 70% of airlines have


made commitments on SAF use by 2030. There is just no way those commitments can all be met. We’re not seeing the supply stimulated.” Walsh noted fuel suppliers pay


the costs of compliance with the mandates but “just pass them on”,


‘Mandates have led to huge increases in price [of SAF],’ says Iata’s director general


saying: “They’re in a position to adjust the price to protect themselves. “This is a wake-up call. SAF is just


not available. The regulators need to look urgently at what is happening versus what they thought would happen.” Walsh said Iata had not set a 2030


target for SAF use “because what we thought achievable wouldn’t look ambitious”.


Global SAF production is


forecast to reach 2.4 million tonnes (MTs) in 2026, up from 1.9 MTs in 2025. That was almost double the 1 MTs produced in 2024 but represented only 0.6% of global jet fuel consumption while adding $3.6 billion to airline fuel bills. SAF is forecast to comprise just 0.8% of the world’s aviation fuel supply in 2026.


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PICTURES: Shutterstock/Bulent camci, 1000 Words


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