A Step Forward for Sustainable Aviation
While the United States appears to be stepping back on sustainable aviation fuel (SAF) incentives, the European Union is strengthening its regulatory stance. The latest move by the European Union Aviation Safety Agency (EASA) is a significant step in refining the ReFuelEU Aviation initiative. By introducing reference prices for SAF, the EU is not only enhancing transparency but also setting the groundwork for stricter compliance measures.
This decision underscores the EU’s commitment to decarbonizing the aviation sector and signals to fuel suppliers and airlines that non-compliance will come at a cost. But beyond penalties, it presents an opportunity to rethink SAF investments and market strategies.
New Reference Prices: The Cost of Compliance
EASA has released its 2024 reference prices for various SAF types:
- Biofuels, Advanced Biofuels, and Recycled Carbon SAF: €2,085 per ton ($2,169)
- Synthetic Aviation Fuel (eSAF): €7,695 per ton ($8,007)
- Conventional Jet Fuel: €734 per ton ($763.8)
The stark price differences—€1,351 per ton ($1,406) between SAF and conventional fuel and €6,961 per ton ($7,244) between eSAF and fossil jet fuel—highlight the economic challenge of adopting sustainable fuels at scale.
However, these figures are more than just market indicators; they directly impact non-compliance penalties. Under Article 12 of ReFuelEU Aviation, penalties must be at least twice the price differential between SAF and fossil kerosene. This means:
- Airlines failing to meet SAF mandates will face fines around €2,700 per ton ($2,809).
- Non-compliance with future eSAF quotas (starting in 2030) could result in penalties as high as €13,992 per ton ($14,560).
The Penalty System: More Than Just Fines
Jet fuel suppliers that do not meet SAF blending quotas will not only incur penalties but will also be required to make up for their shortfall in subsequent years. This cumulative effect increases the financial burden over time, making short-term non-compliance an increasingly expensive option.
The EU’s approach sends a clear message: rather than seeing fines as a “cost of doing business,” airlines and fuel suppliers must integrate SAF into their long-term strategies.
Industry Pushback: The Biofuel Debate
Despite the progress in regulatory clarity, not all stakeholders are aligned with the EU’s SAF vision. A significant point of contention remains the exclusion of crop-based biofuels from the ReFuelEU Aviation mandate.
In a recent legal challenge, ePURE and Pannonia Bio, representing the ethanol sector, sought to contest this restriction. They argued that excluding crop-based biofuels unfairly limits market access and disadvantages ethanol-based SAF pathways, such as alcohol-to-jet (AtJ), which is gaining momentum in the Americas. The case had support from major US biofuel advocates, including:
- Renewable Fuels Association
- Growth Energy
- U.S. Grains Council
- LanzaJet
However, the General Court of the European Union dismissed the challenge, ruling that the claimants lacked legal standing. This decision was met with disappointment by US and EU biofuel stakeholders, who view the regulation as restrictive and unscientific.
Shifting Focus: Scaling Non-Crop Feedstocks
With AtJ pathways facing hurdles in the EU, European SAF producers must focus on non-crop feedstocks such as:
- Waste oils
- Lignocellulosic biomass
- Municipal solid waste
- Power-to-liquid (PtL) synthetic fuels
While these alternatives align with the EU’s sustainability-first approach, they also come with significant supply chain and cost challenges. The success of these pathways will depend on technological advancements, policy support, and investment in production capacity.
Conclusion: A Defining Moment for Aviation Sustainability
The EU’s introduction of reference SAF prices is more than a compliance measure; it is a catalyst for long-term change. Airlines and fuel suppliers must now navigate:
- The economic challenge of integrating SAF at competitive prices.
- The regulatory pressure to meet increasing SAF mandates.
- The legal landscape, where feedstock choices remain a contentious issue.
This is a defining moment for aviation’s transition to sustainability. The question is no longer whether SAF adoption will happen but how quickly and efficiently the industry can scale up solutions.