Kuala lumpur: The energy transition, specifically the development of sustainable aviation fuel (SAF), should be viewed as an economic growth strategy by Asia-Pacific governments rather than merely an aviation issue, according to the International Air Transport Association (IATA).
According to BERNAMA News Agency, IATA's chief economist Marie Owens Thomsen emphasized that the region risks missing out on a significant growth opportunity if policymakers delay investments in renewable energy, feedstock production, and SAF capability. Thomsen stressed the importance of mobility and energy for economic progress, noting that aviation contributes to GDP growth. She described the energy transition as a viable growth strategy for countries.
During an exclusive interview with Bernama at IATA's Global Media Day 2025, held recently, Thomsen highlighted the limitations of traditional economic tools such as low interest rates and fiscal policies, suggesting that the energy transition offers a rare chance to boost long-term productivity. She noted that countries are over-indebted, interest rates cannot be further lowered, and high taxes have maxed out traditional policies. Engaging with the energy transition could improve agriculture for feedstock production and democratize energy grids, enabling industries to decarbonize.
According to IATA's Global Feedstock Assessment for SAF Production - Outlook to 2050, approximately 500 million tonnes of SAF will be needed by 2050 to achieve net-zero CO2 emissions. In 2025, global SAF production is expected to reach just two million tonnes. Some countries and regions, such as China and ASEAN, particularly Indonesia and Malaysia, are emerging as critical feedstock hotspots, potentially accounting for about 240 million tonnes of biomass feedstock for SAF production by 2050.
Malaysia has launched initiatives such as the New Industrial Master Plan (NIMP), National Energy Transition Roadmap (NETR), Hydrogen Economy and Technology Roadmap (HETR), and the Malaysia Aviation Decarbonisation Blueprint to achieve net-zero carbon emissions by 2050.
Thomsen also noted that Asia-Pacific's progress in SAF development will depend on stronger policy coordination and clearer regulatory pathways. She emphasized the importance of beginning with renewable energy generation, not just focusing on aviation. Countries need more solar and wind energy and stronger power grids to enable industries, including aviation, to decarbonize.
IATA estimates that an average yearly investment of US$174 billion is needed over the 2024-2050 horizon to secure airlines' use of SAF and meet most of the industry's decarbonization needs.
Referencing global trade patterns, Thomsen highlighted aviation's role in economic resilience. Despite challenges like U.S. tariffs, air cargo allowed Asian exporters to quickly redirect trade flows, mitigating a global downturn. This underscores aviation's economic value beyond passenger connectivity.