UK SAF mandate gov.uk
Substantial investment is required to develop and deploy SAF at scale.
Stakeholders across the aviation industry ecosystem have reiterated their commitment to the decarbonisation of air transport. However, they have underlined that accelerating the availability and affordability of sustainable aviation fuel (SAF) is essential to achieving the European Union (EU) and aviation industry climate goal of net zero CO2 emissions by 2050.
Organisations, including Destination 2050, FuelsEurope, Hydrogen Europe, Project SkyPower, European Express Association and European Cargo Alliance have highlighted that the Draghi report on European underscores that decarbonisation is a competitive challenge for hard-to-abate sectors such as aviation. Decarbonisation of the aviation sector is expected to cost around EUR61 billion annually. Furthermore, EU demand requires the construction of circa 12 new industrial-scale first-of-a-kind e-SAF plants.
Aviation is also critical to socio-economic growth. In addition to providing vital connectivity, in 2019 figures show that the industry supported 14 million jobs and EUR 851 billion to GDP in Europe.
Transitioning to a net zero industry requires substantial investment to develop and deploy SAF, to upgrade infrastructure and to support technological innovations within the industry. The EU’s ReFuelEU Aviation initiative has largely stimulated bio-SAF production capacity, with around 1.2 million tonnes of the fuel produced in 2014. Achieving the higher overall targets and the e-SAF sub-target in 2030 and beyond is dependent on the unlocking of private investment, which today is hindered by high capital costs, regulatory complexity and a lack of market-based de-risking instruments.
While the EU’s ReFuel Aviation is described as the “backbone” of Europe’s SAF strategy, its success relies on swift, coordinated action to resolve the investment and implementation barriers.
Critical challenges
The market for commercially available HEFA-produced SAF remains nascent, with the corresponding challenge of the high cost gap with conventional kerosene and possible competitive gap with non-EU airlines and SAF producers.
In addition, next-generation SAF pathways, notably e-SAF and advanced biofuels, continue to face strong challenges in securing investment decisions for commercial deployment. To date, with the exception of one small pilot-scale project, none of the 40+ EU e-SAF commercially-full-scale projects have reached final investment decision (FID).
In response the aviation industry is urging policymakers at EU and national levels to take swift action and work alongside industry stakeholders to ensure a timely and robust ramp-up of SAF in Europe. This call for action is based on a 10-point action plan to help fulfil the upcoming Sustainable Transport Investment Plan (STIP). The overall aim is to create a healthy EU SAF market and unlock investment into SAF production in the EU, as well as ensuring competitiveness of the EU aviation industry and SAF value chain.
The 10-point action plan
- Proposing to extend in volume and time the mechanism for Fuels Eligible under EU ETS (SAF allowances) to bridge the gap between SAF with conventional kerosene and further support SAF uptake as part of the 2026 EU ETS review.
- Holding dedicated calls under the Innovation Fund, Industrial Decarbonisation Bank and European Innovation Council to increase the uptake of advanced bio-SAF and e-SAF projects, as well as charging/ refuelling stations from 2025.
- Ensuring the European Investment Bank Group tailors its financial projects to suit the risk profile and financing needs of e-SAF and advanced bio-SAF projects.
- Accelerating initiatives bringing new SAF projects and plants to the market.
- Create a revenue certainty instrument to overcome the offtake mismatch between long-term production and short-term uptake.
- Explore the potential of a system allowing obligated parties under the ReFuel EU to claim SAF environmental attributes through an EU virtual ticketing mechanism.
- Create a level playing field for Europe’s aviation industry, by exploring ways to boost Eu production competitiveness.
- Proposing targeted simplification measures to reduce the administrative burden for early movers and SMEs in SAF.
- Taking the necessary measures to increase the availability of (European) feedstocks for SAF production, including renewable electricity capacity and ensure the aviation ecosystem can access sufficient eligible biomass.
- Working collaboratively with industry to accelerate the testing and certification of e-SAF technologies such as Methanol-to-Jet and advanced Ethanol-to-Jet.
