IATA boss criticizes EU’s SAF mandate design, slams fuel suppliers for markups 

Willie Walsh, Director General of the International Air Transport Association (IATA) has expressed concern about the way airlines are made to carry most of the burden of the European Union’s Sustainable Aviation Fuel (SAF) mandate. 

Speaking at the 3rd IATA World Sustainability Symposium, which is taking place in Hong Kong, October 21-22, 2025, Walsh stated that, while the airline industry remains committed to decarbonization, some elements of the current mandate design are not fit for purpose. 

According to the airline executive, rather than leading to a boost in SAF production, as was intended by regulators, the mandate, which sets minimum SAF procurement requirements for airlines over time, has led to price hikes for airlines while production remains way below expectations. 

Walsh, who was joined on stage by IATA’s VP Sustainability & Chief Economist, Marie Owens Thomsen, quantified the cost of the airline industry’s transition to net zero at US$174 billion per year. This roughly translates to a cost of almost US$35 per passenger per year, a figure five times higher than the approximately US$7 the airline industry makes on average per year with every passenger it carries. 

Both Walsh and Owens Thomsen dismissed comments from industry figures critical of the industry’s net zero goals. Ryanair’s CEO Michael O’Leary has notoriously stated that the “net zero agenda is dead.” However, while both defended the decarbonization drive as necessary over the long term, they called for a different approach. 

“If the levies don’t lead to significant increases in SAF production, then they are not achieving what they were intended to do, and a new design is needed,” Walsh stated. 

Willie Walsh speaking at the IATA WSS plenary sessionIn this regard, Walsh highlighted the United States’ approach in providing incentives as having yielded more tangible results than the European one. This difference in approach is often referred to in the industry as the “carrot vs. stick” debate. 

The airline executive, who is known in the industry for being outspoken, also denounced that the lion’s share of the SAF mandate costs have fallen on the airlines, while other operators had been benefiting from them.  

In particular Walsh was critical of fuel suppliers, which, he said, had raised prices well above the expected differential between SAF and conventional fuel, linking this markup to a “compliance surcharge”. Walsh said IATA had raised this issue in Brussels with European regulators and legislators, as airlines sought ways to prevent this practice. 

At this point, Owens Thomsen noted that, despite its fundamental role in society and the broader economy, commercial aviation had historically been a low margin, low profit industry, with net margins never surpassing 5% on average for the ensemble of carriers. She contraposed this to the much larger profit margins enjoyed by the oil and gas industry. 

Replying to questions by journalists from the Asia-Pacific region, Walsh issued a note of caution regarding the steps other countries are taking to follow the European example.  

While admitting the matter required further assessment, he specifically highlighted Singapore’s SAF mandate plan, noting that, even if it contained some interesting elements, initial analysis suggested it could encounter similar problems to the European approach, particularly its inability to effectively encourage SAF production. 

“My advice would be to be very careful,” he said, “because Europe doesn’t always get it right.” The post IATA boss criticizes EU’s SAF mandate design, slams fuel suppliers for markups  appeared first on AeroTime.

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