With new 2% sustainable aviation fuel (SAF) mandates kicking in across Europe, the UK, and China, global airlines are running into a severe supply shortage. In this brief update, Panuswee Dwivedi, Project Manager at ADI Analytics, highlights the widening gap between regulatory mandates and actual production, and how governments are scrambling to subsidize the market.
Key Highlights
- The massive supply gap: Global mandates projected a 2-billion-gallon SAF demand, but actual production hit just 0.6 billion gallons—leaving airlines facing a steep shortage.
- Sky-high premium costs: Due to intense supply scarcity, airlines paid an estimated $3.6 billion in extra SAF premium costs in 2025 alone.
- The scramble for subsidies: Governments are evaluating creative solutions to bridge the gap, from passenger levies in Singapore to extended tax credits (45Z) in the US.
Watch the full video below to see how global aviation markets are navigating the SAF shortage, and to dive deeper, subscribe to bi-weekly newsletter on sustainable aviation fuel markets, SAF Tracker.
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
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