SAF Policy Actions

The ReFuelEU Aviation Regulation sets out EU-level harmonised obligations on aviation fuel suppliers, aircraft operators and Union airports for scaling up SAF used for flights departing from all EU airports above certain annual traffic thresholds (passenger traffic above 800 000 or freight traffic above 100 000 tons). Starting in 2025, aviation fuel suppliers are required to supply a minimum of 2% blend of SAF with conventional aviation fuels to Union airports and this gradually increases to at least 70% by 2050. Synthetic aviation fuels are subject to a dedicated minimum share, starting with 1.2% in 2030, 2% in 2032 and reaching 35% in 2050 

. Aircraft operators departing from EU airports must also refuel with the aviation fuel necessary to operate the flight. This avoids the excessive emissions related to extra weight and minimises the risks of carbon leakage caused by so-called ‘economic tankering’ practices. Between 2025 and 2034, aviation fuel suppliers can supply the minimum shares of SAF as an average over all the aviation fuel they have supplied across Union airports for that reporting period. This flexibility mechanism allows the industry to develop the production and supply capacity accordingly and the fuel suppliers to meet their obligations in the most cost- effective way without reducing the overall ambition. The European Commission has published a report to identify and assess the developments on SAF production and supply on the Union aviation fuel market, as well as assess possible improvements or additional measures to the existing flexibility mechanism, such as setting a potential accounting and trading mechanism for SAF (a so-called ‘book and claim’ system).

In order to support the achievement of the ReFuelEU Aviation SAF ramp up, the EU has put in place various regulatory, financial and other supporting measures, including:

• A zero emissions rating of SAF used under the EU Emissions Trading System (ETS);
• A maximum of 20 million ETS allowances (with an estimated value of €1.6 billion) allocated to aircraft operators between 2024 and 2030 for the uplifting of SAF to cover part of or all of the price difference with fossil kerosene, depending on the type of SAF and the uplift location;
• A favourable tax treatment of SAF under the proposed revision of the Energy Taxation Directive;
• A Flight Emissions Label (FEL) laying down harmonised rules for the estimation of airline emissions taking into account SAF uptake;
• The inclusion in the EU Taxonomy of SAF production and uptake to improve access to green finance;
• Financial support for research, innovation and deployment under Horizon Europe, Innovation Fund, InvestEU programmes to de-risk SAF production at all technology maturity stages;
• The accelerated qualification of new SAF technologies and approval of new production plants through the creation of an EU SAF Clearing House and inclusion of SAF in the Net Zero Industry Act proposal;
• Cross-sectoral cooperation in the Renewable and Low-Carbon Fuels Value Chain Industrial Alliance (RLCF Alliance). The RLCF Alliance, as the industrial pillar of ReFuelEU Aviation to support SAF supply, as well as match-making emerging SAF projects with potential fuel off-takers, is open to all stakeholders.
• EU-funded international cooperation SAF projects with partner States in Africa, Asia, Latin America and the Caribbean. This includes a €4 million ACT-SAF project to conduct feasibility studies and capacity building activities.
• Designation of SAF as a 2024 Global Gateway Flagship initiative, supporting the development, production and use of SAF by de-risking SAF investments outside Europe via different types of funding.
• International cooperation at ICAO level, including the EU’s role in the negotiations to reach an agreement at CAAF/3 in November 2023.

The ReFuelEU Aviation regulation also foresees a thorough monitoring and reporting system of SAF supply and usage that will provide an overview of the European SAF market and form part of future editions of this report. This reporting is linked with an enforcement mechanism consisting of penalties imposed by Member States for the cases of non-compliance from fuel suppliers and aircraft operators.

First in 2027 and every four years thereafter, the European Commission will present a detailed assessment of the SAF market and the possible need to revise the scope of the Regulation, the eligible fuels, the minimum shares and the level of fines for non-compliance. It will also include an assessment of possible support mechanisms for production and uptake of SAF.

 

This section contains an non-exhaustive overview of national policies outside the EU that promote the use of SAF.

Switzerland set out a SAF strategy with the goal that SAF shall contribute a minimum of 60% to net CO₂ reductions in Swiss civil aviation by 2050, thereby contributing to the Swiss goal of reaching net-zero CO₂ emissions in 2050. It is accompanied by a legislative proposal that includes a blending mandate and provision of funding for the development of SAF production pathways, planned to enter into force in 2025. To avoid market distortion, the mandate shall be aligned with ReFuelEU Aviation. Turkey is also planning to develop dedicated SAF regulations to incentivize its uptake 

. The United Kingdom SAF policy includes a SAF Mandate to drive an ambitious ramp-up of SAF in the aviation fuel supply, starting with 2% in 2025, increasing linearly to 10% in 2030 and reaching 22% in 2040. The Mandate includes a cap on the amount of HEFA SAF used to meet obligations, and there is a separate obligation for Power-to-Liquid fuels, starting in 2028 with 0.2% of the total fuel supply and reaching 3.5% in 2040  .

Outside of Europe, the United States has introduced the ‘SAF Grand Challenge’ to produce at least 3 billion gallons (approx. 94 million tonnes) per year by 2030

. This is being incentivized by tax credits for producers and a grant program to boost domestic SAF production. Both South Korea and Indonesia plan to have all departing international flights use a mix of 1% SAF from 2027, with Indonesia planning to ramp up this mandate from 2.5% in 2023 up to 50% in 2060  . Singapore aims at a 1% SAF target for all departing flights from 2026 that will increase to 3-5% by 2030, and which is supported by the introduction of a levy for the purchase of SAF . The Japanese Ministry of Trade and Industry has set a 10% SAF blending target on domestic airlines fuel consumption by 2030 that includes support to develop new technologies to produce SAF  .