European airlines, airports, and aircraft manufacturers are urging EU policymakers to take immediate steps to accelerate the production of sustainable aviation fuel (SAF).
A newly published report by global advisory firm ICF outlines seven key measures that could help Europe close the gap in SAF production and maintain its competitiveness in the global aviation industry.
The report, jointly commissioned by six industry bodies, highlights how current projections for SAF production in Europe fall short of ambitions and are made worse by industrial strategies in other countries, such as the US Inflation Reduction Act (IRA) and Chinese strategic investment, which have created an unequal marketplace.
If this trend continues, increasing quantities of SAF are likely to be imported to meet the EU’s mandates, undermining its attempts to attain energy independence. On top of this, consumers will end up bearing extra costs for more expensive SAF and an increasing share of jobs will be created in other countries, further undermining Europe’s competitiveness.
The report highlights that this negative projection for Europe is not guaranteed and a concerted policy push can boost SAF production in Europe. Amongst the recommendations are:
- Introducing risk-sharing mechanisms, such as Contracts for Difference, to unlock private investments and reduce consumer costs.
- Enhancing financial support for advanced SAF facilities, including capital grants and loan guarantees.
- Prioritising access to feedstocks and renewable electricity to ensure sustainable and competitive production.
- Refining existing mechanisms, such as adding increased flexibilities to the ReFuelEU Aviation mandate and ETS allowances, to improve market efficiency and reduce volatility.
“Sustainable aviation fuel (SAF) isn’t just the key to decarbonising aviation in the short term, it’s an opportunity for Europe to establish itself as a global leader in a new form of energy. The competition is intense, and the choice is clear. If policymakers step up and implement the measures in this report, Europe can lead the transition to decarbonised aviation, increase its energy independence and enhance its competitiveness. The Clean Industrial Deal and Sustainable Transport Investment Plan are ideal opportunities to get started,” the heads of association of A4E, ACI EUROPE, ARC, ASD, ERA and GAMA said.
