Jet Fuel's Green Shift Is Losing Altitude

Global SAF output will meet just 0.8 percent of jet fuel demand in 2026 as policy gaps widen and regional supply grows increasingly uneven.

25 Jun 2026

Aviation's clean fuel ambitions continue to outpace reality. Global sustainable aviation fuel (SAF) production is expected to reach 2.4m tonnes in 2026, enough to meet just 0.8% of jet fuel demand, according to IATA. Refinery capacity is expanding. Policy support is not keeping pace.

Nowhere is the imbalance clearer than in Asia. The region has announced annual SAF capacity of 1.6m tonnes, while mandated demand amounts to only 380,500 tonnes. Producers are therefore looking overseas, sending surplus fuel to Europe, where ReFuelEU rules have created a more dependable market. Companies such as Apical and EcoCeres have secured buyers, but intense competition for limited feedstocks continues to erode margins.

Across the Pacific, the picture is different. The US Energy Information Administration expects SAF production to fall to 11,600 barrels a day in 2026, down from 13,900 barrels in 2025. Competition for feedstocks has intensified, while restrictions tied to eligibility for the 45Z tax credit have weakened incentives to invest. A market once expected to drive global growth is instead losing momentum.

Meanwhile, the timetable leaves little room for delay. Britain will introduce SAF targets in 2028, while the European Union's e-SAF mandates begin in 2030. Airlines face legal obligations that fuel producers have yet to match. Willie Walsh, IATA's director general, offered a bleak assessment: "The path to meeting 65% of our needs in 2050 is growing more difficult with each year of ineffectively sequenced government policies and oil companies' manifest lack of interest."

Ultimately, the industry's constraint is no longer a shortage of projects. It is a shortage of policies that align investment, production and demand. Until governments provide clearer incentives and more consistent rules, the gap between climate targets and fuel supply is likely to widen.