Introduction: A Critical Step Toward Cleaner Skies
In a decisive move that marks a new chapter in aviation sustainability, the European Commission has published the essential details for calculating the price difference between kerosene and sustainable aviation fuels. This development is far more than a technical update—it is a linchpin in the EU’s broader strategy to integrate environmental responsibility into the core of commercial aviation through the Emissions Trading System.
Fuel Price Transparency as a Policy Lever
The 2025 Commission Notice released on 26 May establishes the methodology for quantifying the cost disparity between conventional kerosene and eligible aviation fuels. This is not just about numbers—it is about creating a market environment that supports greener choices. By defining a transparent pricing benchmark, the Commission enables a reliable and equitable system for allocating free EU ETS allowances to operators using cleaner fuels.
This pricing transparency also serves another strategic function. It reduces market ambiguity and levels the playing field, particularly for smaller or regional carriers that may be deterred from adopting sustainable aviation fuels due to perceived cost disadvantages.
Bridging the Price Gap: How the Support Mechanism Works
The underlying challenge in transitioning aviation toward sustainability has long been the price premium of sustainable fuels compared to fossil-based kerosene. The revised EU ETS tackles this head-on. Under the system introduced by the EU ETS Directive, commercial aircraft operators receive free emission allowances that correspond to the additional cost of sustainable fuels.
This ensures that carbon-efficient fuels are not penalised by market dynamics. Instead, they become a viable, supported choice—turning decarbonisation into a rational business decision rather than a costly environmental ideal.
Regulation and Reporting: A Harmonised European Framework
The process was formally initiated through the adoption of Commission Delegated Regulation (EU) 2025/723 on 6 February. This regulation established the rules for calculating annual price differences and for allocating free allowances accordingly. The approach is methodical and fair, relying on standardised, EU-wide average prices to avoid disparities in national calculations.
In May, the Commission published the average fuel prices and associated price differentials for 2024. These figures are grounded in data from the European Union Aviation Safety Agency, which released preliminary reference prices in February. The final technical report from EASA will follow in September 2025, maintaining consistency with this pre-publication.
A Timeline for Impact: Precision and Accountability in Allocation
The practical application of this framework now rests with national authorities. Using the data and methodology provided, they will compute the number of allowances each commercial operator is entitled to receive. These figures will be submitted to the Commission, which will issue an official Decision on the allocations by 31 August.
This annual cycle ensures that the system remains dynamic and responsive to changes in market conditions and fuel availability. It also embeds accountability into the process, giving operators and regulators a shared roadmap for scaling the use of sustainable aviation fuels year on year.
Fuel Price Disclosure as a Confidence Builder
Beyond its administrative function, the fuel price disclosure fosters a culture of confidence and trust in the EU ETS. Stakeholders—including airlines, investors, and sustainability advocates—can independently verify the fairness of the system. This openness is critical in maintaining buy-in from all parties and reinforcing the credibility of the policy.
It also gives a forward signal to fuel producers and refiners: there is a guaranteed support structure for sustainable aviation fuels. This assurance can help drive further investment and innovation in fuel technologies that are currently at the margin of commercial viability.
Strategic Synergy with ReFuelEU Aviation
The fuel price benchmarks released by EASA also intersect with the ongoing ReFuelEU Aviation initiative. By aligning the price reporting with ReFuelEU’s technical standards, the Commission creates a coherent regulatory landscape that supports long-term decarbonisation goals. This synergy allows both programmes to function as complementary pillars of EU climate policy in the aviation sector.
Conclusion: Unlocking the Business Case for Sustainable Aviation
The publication of the fuel price calculation framework is a milestone that bridges regulatory intent with operational execution. It simplifies and demystifies the economics of fuel transition, offering commercial aircraft operators a concrete pathway to adopt sustainable aviation fuels without financial penalty.
More importantly, it transforms sustainability from an aspiration into an accessible objective—anchored in sound policy, supported by market mechanisms, and delivered through a collaborative European approach. With these mechanisms now in place, the skies are clearer not just environmentally, but in the way forward for every aircraft operator ready to embrace the transition.