BUSINESS NEWS Iata AGM 2025: Sector’s push to decarbonise dominates event. Ian Taylor reports from Delhi


Economists warn decarbonisation goals won’t be met


Energy policy advisors have warned that governments and industries will miss current decarbonisation and net zero targets. Economist Christof Ruhl, senior


research scholar at Columbia University’s Centre on Global Energy Policy, noted: “Tens of thousands of companies, industries and governments have given themselves targets, and it’s obvious many of them won’t be met.” He argued “there is no way”


a 1.5 or two-degree rise in global temperatures will be prevented “unless there is an economic collapse” and said: “Then what do people do? They can become cynical, or they can see the weather


Christof Ruhl


Iata says SAF increased airlines’ total fuel bill by $1.6bn last year


behaving even more strangely and double up [their efforts].” Rob McLeod, head of energy


risk solutions at global energy and commodities firm Hartree Partners, argued: “We need to focus both on fossil fuel and SAF. “Fossil jet fuel demand is


going to continue growing for decades. [But] without investment, conventional oil production declines 4%-6% a year. No one thinks demand will decline that quickly, so unless we invest, we’re going to see demand outpace supply.”


Iata estimated the average cost of sustainable aviation fuel (SAF) to be more than three times the price of jet fuel last year, adding $1.6 billion to airlines’ fuel bill. The association calculates the


average cost of SAF worldwide this year will be even higher at 4.2 times the price of jet fuel, and it argues this “is largely the result” of SAF ‘compliance fees’ levied by fuel suppliers in Europe to cover their potential costs of compliance with EU and UK SAF mandates. These require a minimum


average 2% of fuel on departing flights comprise SAF over the course of this year, subsequently rising each year to at least 6% SAF in the EU and 10% in the UK by 2030.


SAF is tipped to cost 4.2 times as much as jet fuel this year


Iata forecast SAF production


would grow to two million tonnes this year, double the amount produced last year, but will still account for only 0.7% of airline fuel. It noted the need for “an exponential expansion” of production if the industry is to meet its target of net zero carbon emissions by 2050.


‘Net zero by 2050 is still the aim’


Airlines will not drop their target of net zero carbon emissions by 2050 despite the challenges of shifting from fossil fuel use in aviation, Iata director general Willie Walsh insisted last week. Speaking following the Iata


annual general meeting (AGM) in Delhi, Walsh confirmed: “The industry is still targeting 2050. We’re concerned about the pace of progress and the lack of coordination [among governments]. That will hinder progress. But there has been no discussion about changing the date.” That target, agreed at the Iata AGM


in 2021, assumes sustainable aviation fuel (SAF) will account for 65% of airline emissions reductions by 2050. Walsh argued: “Companies


now recognise the massive scale of the challenge. All of us recognise we have to play our part, but


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the concern is we’re not making progress as a whole value chain. We need coordination among governments, and we’re not helped by [government SAF] mandates that aren’t doing anything to stimulate SAF production but just adding cost.” He warned: “This is a wake-up


call. We’re sounding the alarm. “A lot of airlines are committed


to using 10% SAF by 2030. The demand signal is very strong.” But he suggested “key players” have talked about the 2050 target “but not turned words into action, and we’ve been clear that airlines can’t do this on our own”. He noted: “SAF is produced


in some parts of the world, but in others there is none produced. It’s frustrating for airline chief executives who have targets and are struggling to buy SAF to meet those targets.


Willie Walsh: ‘[Airlines] want to see governments incentivise SAF production’


It would be crazy to meet a target by buying SAF on the other side of the world and having to ship it.” Walsh insisted: “The industry


is committed. [But] it wants to see governments incentivise SAF production.” He added: “I’ve called out BP and Shell because the slow pace of developing SAF production is leading to very high prices. We have to


be realistic. In the timeframe to 2050, we don’t see another technology developing that will play a significant part [in decarbonisation].” Iata chief economist and senior


vice-president for sustainability Marie Owens-Thomsen added: “We have the technology. We don’t need to change aviation infrastructure. But we’re not getting the fuel.”


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