IAG CEO warns EU SAF mandates and carbon costs could crush European aviation competitiveness

International Airlines Group CEO Luis Gallego is pushing back on the pace of Europe's aviation green rules, saying SAF blending mandates and carbon costs are stacking up faster than fuel supply can scale. Under ReFuelEU, airlines must blend 2% SAF today and 6% by 2030, but production remains scarce and SAF can cost three to five times more than kerosene. Gallego argues airlines are being forced to buy fuels that barely exist, which could raise fares and push hub traffic to carriers outside the EU. European carriers also lose free ETS allowances from 2026, adding another compliance layer. The real policy question is whether these mandates reduce emissions or just move them, since passengers can switch to non-EU hubs. For anyone tracking carbon markets or SAF project finance, this is a useful case study in what happens when regulation outruns industrial capacity.