The commencement of SAF blending mandates in the UK and EU in January, along with consideration of similar mandates progressing in key markets in Asia Pacific ahead of the transition from CORSIA’s voluntary to mandatory phase in 2027, signal a clear shift: decarbonisation is no longer a future ambition—it’s a near-term imperative.

Against this backdrop, airlines must navigate a complex landscape of emerging technologies, evolving regulation, and cost pressures. But for those that respond strategically, decarbonisation can be more than compliance—it can be a catalyst for competitive advantage.

In this piece, we explore four essential levers and outline how airlines can build an integrated approach to sustainability that enhances both resilience and return on investment. 

SAF Procurement

SAF is widely recognised as the most material level for the aviation industry to achieve its shared commitment to net zero emissions by 2050. Unlike conventional jet fuel, SAF can reduce lifecycle emissions by up to 80%. However, the availability, cost, and scalability of SAF remain major barriers.

Current global SAF production is a fraction of what is needed to meet projected demand in line with SAF blending mandates, with production constrained by feedstock availability and refining capacity. Many SAF production projects are also first-of-a-kind (FOAK), which presents an additional set of challenges. This includes high capital costs and long lead times for deployment of early-stage technologies at commercial scale. Securing financing for FOAK projects can also be difficult, given that financiers typically want to see projects de-risked through long-term offtake agreements, whereas airlines tend to prioritise short-term procurement arrangements for jet fuel.

SAF also remains significantly more expensive than conventional jet fuel, often two to five times the price, posing cost challenges for airlines already operating on low profit margins per seat. According to IATA, the average net profit per passenger across the global airline industry in 2023 was US$5.44. In the same year, aircraft fuel costs were by far the largest contributor to airlines’ cost base, accounting for almost 30% of total operating costs on average. Clearly, increasing fuel costs through the procurement of SAF has potentially significant implications for airlines’ profitability.

Fragmented policy settings across global markets are another key barrier to scaling SAF adoption. Inconsistent incentives, misaligned emissions accounting and a lack of harmonised book-and-claim systems create an uneven playing field for airlines and dilute demand signals for investment. Without coordinated international frameworks, SAF uptake is likely to remain piecemeal, undermining the aviation sector’s ability to decarbonise at pace. Pollination recently authored a report published by Virgin Australia and Boeing on the challenges and opportunities of an international book and claim system for SAF accounting and how this could be integrated into Australian policy settings.

Reducing Operational Emissions

While SAF is critical for long-term decarbonisation, airlines must also tackle near-term operational efficiencies to meaningfully reduce emissions this decade. One major challenge lies in aircraft efficiency—most airlines operate legacy fleets that will remain in service for the near future, making rapid change difficult. Retrofitting older aircraft with fuel-saving technologies or accelerating fleet renewal requires substantial capital and introduces significant logistical hurdles.

Optimising flight operations offers another lever, with smarter flight planning, continuous descent approaches, and improved air traffic management all capable of reducing fuel burn. However, these gains depend on close collaboration with regulators and airport authorities, as well as investment in modernising aviation infrastructure.

Ground operations are another sometimes overlooked emissions source. From ground transport to auxiliary power units and terminal energy use, Scope 1 and 2 emissions across airport ecosystems need to be aggressively managed. Airlines and airports must work together to electrify equipment, decarbonise energy supply, and improve efficiency if the sector is to hit net-zero targets. 

Securing High-Integrity Carbon Credits Under CORSIA

Under CORSIA, airlines are required to offset any emissions from international flights that exceed 2019 levels (on an absolute emissions basis). While this mechanism is central to aviation’s current decarbonisation efforts, securing high-quality, CORSIA-compliant carbon credits introduces a number of hurdles.

First, there are currently significant supply constraints. CORSIA demands that offsets meet strict environmental integrity standards, which limits the pool of eligible credits and intensifies competition among airlines for access to credible options. Second, price volatility is a growing concern. As demand for high-integrity credits climbs, price instability has increasingly become a feature of the market, making it harder for airlines to forecast and manage future carbon compliance costs. Finally, airlines face mounting reputation risks. With growing scrutiny of offsetting practices, stakeholders are demanding greater transparency and stronger proof of impact to guard against greenwashing—raising the bar for airlines in both the sourcing and communication of their offset strategies. 

Building Competitive Advantage Through an Integrated Decarbonisation Strategy

While global aviation demand is expected to continue to grow in the coming decades, the market is also becoming increasingly competitive. Customers are becoming more sophisticated in examining the sustainability practices of airlines and integrating this into their purchasing decisions. In this context, airlines should be seeking to connect decarbonisation to their brand in-market to align with the expectations of increasingly environmentally conscious consumers.

To turn decarbonisation into a competitive advantage, airlines must move beyond compliance and develop a holistic, integrated strategy that optimises ambition and investment across SAF procurement, operational efficiencies, and carbon offsetting. Key elements of a leading-edge strategy include: 

• A coordinated and sophisticated approach to scaling SAF use through targeted procurement and investment activities aligned with strategic objectives. This may include investment in long-term SAF procurement agreements or partnering with SAF producers to co-invest in production capacity to secure supply and hedge against price volatility.
• Balancing of capital investments in impactful operational decarbonisation levers based on materiality to emissions targets and key commercial and technical considerations.
• A dynamic and diversified procurement approach to secure access to high-quality, CORSIA compliant carbon credits over key time horizons, which may involve direct investment in offset projects to provide long-term security of supply.

Airlines must also embed their strategy across key business activities and processes through integrated governance and capital allocation frameworks, proactive policy advocacy, actionable targets and KPIs and impactful commercial partnerships and broader supply chain collaboration. As aviation faces an era of rapid transformation, airlines that approach decarbonisation as a strategic opportunity—rather than just a compliance challenge—will position themselves for long-term success. The path to net-zero aviation is complex, but with an optimised, sophisticated approach, airlines can enhance both environmental outcomes and commercial value.