IATA puts 2026 sustainable aviation fuel at 0.8 percent of jet use as the UK funds a new package

Sustainable aviation fuel will cover about 0.8 percent of jet fuel demand in 2026, IATA estimated, and the trade group warned that growth stays too slow even with a higher production forecast. The number frames the whole biofuels week. Ambition is large and the actual volume is tiny.

Money in, volume short

Capital keeps arriving. The UK government unveiled a 219 million pound package to boost its SAF industry, and Petrobras approved a $1.2 billion plant for bio-jet and renewable diesel at RPBC. Refinity picked up a PNNL license to turn plastic waste into SAF liquids. Each deal adds future capacity, yet IATA's 0.8 percent figure shows how far supply sits behind the targets airlines have signed up to.

The technology race

Researchers are widening the feedstock base. One group showed food waste converting to jet fuel through simpler refining and a 50-50 blend, and SED is developing a second-generation ethanol biorefinery in India. Cheaper feedstocks and lighter processing are the path to volume, since today's SAF costs far more than fossil jet fuel, which keeps uptake low.

Prices and credits

The market gave airlines some near-term relief. Jet fuel posted its largest weekly price drop since the start of the Iran war, easing fuel bills while SAF scales. On the ground-fuel side, funds added net length in US biodiesel credits and Paraguay set a diesel blend mandate of 8 to 10 percent, both signs of steady blending demand in the wider biofuels pool.

What to watch

Watch whether the UK package and similar mandates actually move SAF volume or just fund pilots. Track feedstock breakthroughs like waste-to-fuel, since cost is the ceiling on volume. And watch the SAF price premium over fossil jet fuel, because that spread decides how fast airlines buy.