IATA Reaffirms STIP is a significant step towards Decarbonising Air Transport.

The International Air Transport Association (IATA) reaffirmed, that the release of European Commission’s ‘Sustainable Transport Investment Plan (STIP)’, as a significant step in recognising the urgent need to accelerate air transport’s decarbonisation. The plan addresses several long-standing weaknesses in the EU’s aviation decarbonisation strategy, but more action is still needed.

“We welcome the Commission’s recognition of market challenges that derive from SAF mandates that were flawed from the outset, particularly the price gap between sustainable and conventional fuels, and the need for robust investment support. Extending SAF support under the EU ETS, exploring tradable SAF and book-and-claim mechanisms, simplifying operator reporting, improving access to sustainability certificates via the Union Database (UDB), and advancing dual conformance of SAF under EU RED and CORSIA to promote global harmonisation are positive steps but we need to see how words turn into reality. Particularly, we are concerned that the STIP falls short of critical industry expectations. We hope this is just the start of a continued review of EU aviation sustainability initiatives which will ultimately lead to a more efficient and successful program of decarbonisation for aviation”, said Willie Walsh, IATA’s Director General.

The areas of the STIP which remain areas of concern include:

Enabling SAF Book-and-Claim in Europe:

IATA notes the Commission’s recognition of the potential of mechanisms that enable tradable SAF certification, including book-and-claim options, to address the SAF supply barrier across European airports. It is also worth noting that such a system will serve as a key enabler for investments in SAF production facilities, in addition to promoting regional cohesion and connectivity by ensuring a level playing field for aircraft operators from different geographical regions in Europe.

This system is urgently required in Europe, and due to the misalignment between the flexibility mechanism under ReFuelEU Aviation, and the rules to claim SAF under EU ETS, necessary amendments to the EU ETS Directive should be implemented during its upcoming review to allow for EU-wide purchase-based claiming of SAF. It also must be noted that book-and-claim is paramount to the success of the proposed “intermediary mechanism”. Enhancement of the UDB is also critical and should be expedited to enable this.

Prioritising demand-side considerations is crucial:

Acknowledging the role of aircraft operators as end-users and giving their issues due consideration should be a priority in STIP’s materialisation. Aircraft operators require a predictable SAF market with clear price transparency to plan the integration of SAF into their daily operations effectively.

Under the current regulatory framework, aircraft operators are exposed to unjustifiably higher prices for jet fuel and SAF. While it is necessary to focus on ways to increase investment in SAF production facilities, STIP should prioritise equally the creation of a transparent and open SAF market that encourages both more supply and demand. A robust UDB is also critical to this effort, and hence, IATA urges the Commission to expedite its enhancement work. IATA and its members stand ready to contribute any necessary input to this work, to ensure the best outcome for all parties involved.

Technology-neutral SAF support is key to ensuring diversified SAF production in Europe:

While the STIP acknowledges the role of biofuels, it continues to prioritise e-SAF, citing feedstock constraints. IATA’s recent report on feedstock availability demonstrates that Europe possesses significant untapped potential for sustainable feedstocks, including advanced residues and waste streams.

A technology-neutral approach, in the form of supporting both biofuels and e-SAF is essential to maximise the potential of all SAFs, all of which will be necessary to reach the targeted 500 Million ton (Mt) in 2050. Limiting support to e-SAF alone risks undermining the scalability and cost-effectiveness of SAF deployment across the continent, with commensurate delays in achieving reductions in CO₂ emissions.

“IATA stands ready to work constructively with the Commission to address these gaps and ensure that the STIP delivers a coherent, investment-ready framework. IATA asks for the EU Commission to clarify the timelines for materialising key flagship actions, in consideration of the reviews of the EU ETS and Refuel, to allow for timely and appropriate market actions and other interventions. The airline industry is committed to net zero carbon emissions by 2050, but this ambition can only be realised if policy frameworks are fully aligned with industry needs and the true scale of the challenge”, said Willie Walsh.

IATA’s recent report on feedstock availability.

The study identified significant barriers in using that feedstock for SAF production, namely:

• The slow pace of technology rollout that would enable SAF to be produced from varied sources. Currently the only commercially scaled SAF production facilities use HEFA technology, for example converting used cooking oil into SAF.

• Competition with other potential users of the same feedstock. Policies allocating biomass feedstock to hard-to-abate sectors such as aviation must be prioritised.

Airlines will need 500 million tons (Mt) of SAF to achieve net zero carbon emissions by 2050, as outlined in the IATA Net Zero Roadmaps. This can be achieved from two main sources:

• Biomass: This has the potential to produce more than 300 Mt of bio-SAF annually by 2050. Some of this potential could be limited by use for competing sources. This potential could be expanded by unlocking additional feedstocks or through efficiency gains and technology improvements over intervening decades.

• Power-to-Liquid (PtL): This will be required to reach 500 Mt of SAF production annually by 2050. Maximising the volumes of cost-effective bio-SAF will reduce the pressure on e-SAF to bridge the gap.

Key findings from the report include:

• There are sufficient sustainable feedstocks and SAF production technologies to decarbonise aviation and meet the net zero carbon emissions goal by 2050.

• With the right policies and investments, more than 300 Mt of SAF from biomass feedstocks could be produced annually by mid-century and around 200 Mt from e-SAF.

The main challenges are:

• Enhancing the feedstock supply chain infrastructure, scaling up novel sources that meet sustainability criteria, and ensuring that the feedstocks identified for SAF production are made available to the air transport industry.

• Accelerating technology rollout to unlock new SAF production technologies, especially PtL, including reliable access to the low-cost renewable electricity, hydrogen, and carbon capture infrastructure which are all required as part of the PtL production method.

• Achieving coordinated government policies to support innovation, and investment to create a fully functioning SAF market, unlocking new economic opportunities.

• Rallying regional leadership, with North America, Brazil, Europe, India, China, and ASEAN identified as key drivers of global SAF output.

• Activating the energy industry to invest in SAF production capacity, support technology commercialisation, and align their business strategies with global decarbonisation goals.

Team Maverick