---
title: Sustainable Jet Fuel Costs Several Times More Than Kerosene, and the Gap Now Has a Daily Price
description: IATA put the European premium on HEFA sustainable aviation fuel at about $1,000 a tonne in 2024. Argus now publishes daily emissions reduction indexes.
author: Darie Nani (Editor-in-Chief)
date: 2026-08-03T11:43:36.972Z
updated: 2026-08-03T11:43:36.982Z
canonical: https://www.sovereignmagazine.com/article/sustainable-aviation-fuel-premium-argus-emissions-index
image: https://cdn.nanimediahouse.com/sustainable-aviation-fuel-price-index-93048.webp
categories: Green Tech
content_type: News
region: Europe
publication: Sovereign Magazine
schema_type: Article
---

Fuel suppliers at EU airports have been required since the start of 2025 to put a minimum share of sustainable aviation fuel into what they sell, whatever it costs them. Argus, the London energy and commodity price reporting agency, has started publishing daily assessments of exactly what that requirement is worth in money, and of how the bill might be split between the airlines buying the fuel and the suppliers making it.

## Europe's Premium on the Cleaner Fuel Reached $1,000 a Tonne in 2024

The clearest public measure of the cost so far comes from the International Air Transport Association. [IATA puts](https://www.iata.org/en/programs/sustainability/sustainable-aviation-fuels/) the market premium on HEFA sustainable aviation fuel in Europe, the difference between what the fuel costs to produce and what it sells for, at around $1,000 a tonne in 2024.

Sustainable aviation fuel still accounts for less than 1% of the fuel burned by the world's aircraft, and IATA says it remains several times more expensive than ordinary jet fuel. It attributes that to costlier feedstocks, production technology that is still maturing, thin physical and market infrastructure, and the heavy upfront investment a new plant requires. On top of production costs sit certification, transaction fees and markups through the supply chain, which IATA says vary considerably from one deal to the next.

## The New Indexes Price the Fuel Against the Carbon Permits It Replaces

Argus calls the assessments emissions reduction indexes. They cover Europe, Asia and the United States excluding Corsia, the international scheme under which airlines can offset emissions by buying carbon units, and there is a separate European assessment excluding the EU emissions trading system.

The structure is the useful part. The ex-Corsia assessments show the net cost of cutting aviation emissions through the HEFA synthetic paraffinic kerosene pathway instead of buying Corsia-eligible units. The ex-ETS assessment sets the same fuel against the cost of complying with the EU carbon market. Both net off the value of whichever carbon market route the airline would otherwise have taken, which turns a fuel price into something an airline can compare directly with the cheapest alternative way of meeting the same obligation.

Argus normalises the prices on an energy-equivalent basis using regional lifecycle emissions assumptions, and publishes the daily figures in US dollars per tonne of carbon dioxide equivalent, with a second reading in dollars per tonne of fuel that isolates the underlying premium. The index values are a subscription product and are not published openly. Argus says the audience is airlines, fuel suppliers, corporate buyers of the fuel, investors and sustainability specialists.

## EU Suppliers Must Reach 2% This Year and 70% by 2050

The obligation the indexes price is fixed in law. Under [ReFuelEU Aviation](https://transport.ec.europa.eu/transport-modes/air/environment/refueleu-aviation_en), suppliers at EU airports have had to ensure at least 2% of the aviation fuel they supply is sustainable since 2025, rising to 70% by 2050, as part of the bloc's target of cutting emissions 55% by 2030. Synthetic aviation fuels carry their own separate track, 1.2% from 2030 and 35% by 2050.

Switzerland adopted the same regulation on 1 January 2026, so suppliers at Zurich and Geneva now work to the same 2% floor and the same path to 2050. Swiss operators also come under the 90% fuel uplift rule, which is meant to stop airlines carrying more fuel than a route needs.

## Argus Has Also Released a Calculator for Splitting the Cost

Alongside the indexes, Argus has released an Excel calculator that lets subscribers model their own procurement, compliance and decarbonisation scenarios, including Scope 3 negotiations, where a company and its suppliers work out which of them books an emissions reduction.

Adrian Binks, Argus Media chairman and chief executive, said the assessments "help aviation industry market participants understand more clearly the relationships between fuel pricing and steadily increasing mandated and voluntary carbon markets obligations". Binks said the tools give participants "a transparent and independent means of establishing the cost of emissions reduction" and help them decide how to allocate the cost and the environmental credit between buyers and sellers.

## Supply Is Doubling and Still Nowhere Near the Requirement

Global production of the fuel is expected to reach about 2.4 million tonnes in 2026, on IATA's figures, which is 0.8% of the jet fuel the industry burns in a year. Output roughly doubled from 1 million tonnes in 2024 to 1.9 million tonnes in 2025, though IATA expects that growth to slow this year.

For the industry to reach net zero by 2050 on its current plan, IATA puts the annual requirement at around 500 million tonnes, more than 250 times what is made now. HEFA, which converts fats such as used cooking oil and animal tallow into jet fuel by a process close to conventional refining, is the most mature pathway and the cheapest way to make the fuel today, and it is capped by how much of that feedstock exists.

Argus was founded in 1970, is headquartered in London and employs more than 1,500 people across 32 offices. It is privately held, owned by its employee shareholders and the growth equity firm General Atlantic.

## FAQ

**Q: Why is sustainable aviation fuel more expensive than ordinary jet fuel?**
IATA points to costlier feedstocks, production technology that is still developing, limited physical and market infrastructure, and the heavy upfront investment new capacity requires. Certification, transaction fees and supply chain markups sit on top. IATA put the European market premium on HEFA sustainable aviation fuel at around $1,000 a tonne in 2024.

**Q: What are the practical limits on sustainable aviation fuel?**
Supply. HEFA, the most commercially developed pathway, runs on used cooking oil and animal fats, and there is only so much of either. IATA expects global output of about 2.4 million tonnes in 2026, roughly 0.8% of jet fuel use, against the 500 million tonnes a year it says the industry would need by 2050.

**Q: What does the ReFuelEU mandate actually require?**
It obliges fuel suppliers at EU airports, not airlines, to make sure a minimum share of what they supply is sustainable aviation fuel: 2% from 2025, rising to 70% by 2050, with a separate synthetic fuel track of 1.2% from 2030 and 35% by 2050. Switzerland adopted the same rules from January 2026.