Sustainable Aviation Fuels Digest for 2/11

EU Regulatory Push for SAF Adoption:

• The European Union is actively promoting SAF through its Emissions Trading System (EU ETS).
• A delegated regulation adopted in February 2025 outlines the support system for SAF, funded by the EU ETS.
• “The 2023 revision of the EU ETS Directive provides a support mechanism for the use of eligible aviation fuels. To incentivize early uptake of the best-performing alternative fuels in terms of emissions reduction potential, 20 million EU ETS allowances, estimated at around $1.6 billion, are set aside from 1 January 2024,” the commission said.
• The EU ETS support mechanism aims to cover “all or part of the remaining price differential between fossil kerosene and the eligible aviation fuels.”
• All flights departing from EU airports are obligated to use a gradually increasing share of SAF.

European Airline Concerns about Competitiveness:

• European aviation associations, particularly in Germany and France, are concerned about new SAF mandates creating “competitive distortions.”
• They argue that these rules unfairly penalize European airlines operating long-haul flights compared to competitors in regions like Turkey and the Gulf.
• “For Germany, this means $400 million extra in costs, without additional revenue,” said Joachim Lang of the German Aviation Association (BDL).
• These associations propose a ticket surcharge for journeys with stopovers outside the EU to address the competitive imbalance.
• They also call for national governments to reduce or eliminate taxes on aviation, arguing “Everything combined makes flying in Europe more expensive than it needs to be.”

Industry Collaboration & Scaling Up SAF Production:

• Several companies are actively pursuing partnerships and projects to increase SAF production and adoption.
• Neste and DHL: They have agreed to develop a commercial model for DHL to offtake around 300,000 tons of unblended SAF per year from Neste by 2030. “The signing of this agreement with Neste is a significant step in our strategy to achieve net-zero emission logistics by 2050.”
• Moeve and Norwegian: They have a contract for Moeve to supply SAF for Norwegian flights from Spain to the Nordic region. “At Moeve, we agree with the widespread industry view that SAF is the only immediate solution for achieving more sustainable aviation.
• Power2X and Worley: Power2X is partnering with Worley to develop the eFuels Rotterdam project, which will produce over 250,000 tons/year of e-SAF.
• Blue Biofuels: They have acquired land in Florida to build a facility to produce both cellulosic ethanol and SAF, planning an initial 3 million gallons per year with potential expansion to 100 million gallons per year.
• These projects aim to address both short-term and long-term needs for SAF supply.

Diverse SAF Feedstocks and Production Pathways:

• SAF is being produced from a variety of sources, showcasing the flexibility of the market.
• Examples include:
• Used cooking oil (Skymark Airlines in Japan)
• Biogenic carbon and green hydrogen (Power2X’s eFuels Rotterdam project)
• Cellulosic materials (Blue Biofuels)
• The diversity indicates the ongoing experimentation to find the most efficient and sustainable routes to creating SAF.
• Moeve highlighted “second-generation biofuels” which suggests not only the material but a process for future development in their operations.

Airlines and Logistics Companies Setting Ambitious Decarbonization Goals:>

• Several companies have set targets to reduce their emissions through SAF and other means:
• DHL aims for net-zero greenhouse gas emissions by 2050, with an interim target of more than 30% sustainable fuels by 2030.
• Skymark Airlines plans to replace 10% of its aviation fuel with SAF by 2030 and aims for net-zero CO2 emissions by 2050.
• These companies are driving the demand for SAF and other forms of sustainable fuel.

Global Exploration and Investment in SAF:

• SAF production is not limited to Europe, with projects and initiatives emerging in other parts of the world
• SOCAR exploring the potential for SAF production in Turkey, anticipating “growing demand for biofuels in the oil refining sector”
• Skymark starting procurement in Japan