EU Unveils €2 Billion Plan to Boost Sustainable Aviation Fuel

The European Union has announced a significant investment plan aimed at addressing the pressing shortage of sustainable aviation fuel (SAF). The initiative, part of the newly adopted Sustainable Transport Investment Plan (STIP), allocates approximately €2 billion through 2027 to enhance the production of low-carbon fuels for both the aviation and maritime shipping sectors. This action comes as the EU seeks to demonstrate leadership at the upcoming COP 30 and tackle the rising emissions in these industries.

Despite a 30% reduction in overall emissions across the EU since 1990, emissions from aviation have surged by 29% and shipping by 26%. This trend has raised concerns about the effectiveness of previous measures aimed at curbing carbon emissions. In response, the European Commission’s STIP aims to accelerate the transition to renewable fuels, addressing the demand from airline and shipping companies for increased investment in SAF production.

Willie Walsh, Director General of the International Air Transport Association (IATA), has been an advocate for better support for the airline sector. He welcomed the EU’s plan, highlighting the challenges posed by current SAF mandates, particularly the significant price gap between sustainable and conventional fuels. Currently, the cost of SAF is estimated to be three to four times higher than traditional jet fuel, complicating its widespread adoption.

In 2024, production of sustainable aviation fuel reached about 1 million tonnes, falling short of expectations due to delays in the United States. Projections for 2025 indicate a rise to 2.1 million tonnes, yet this would still represent less than 1% of the global demand. According to IATA, airlines will require 500 million tonnes of SAF by 2050 to meet net-zero carbon emissions targets.

Investment and Policy Roadmap for Sustainable Aviation Fuel

Sustainable aviation fuel, derived from renewable or waste-based sources such as used cooking oil, offers a viable solution for reducing lifecycle carbon emissions by up to 80% compared to conventional jet fuel. The European Commission’s €2 billion investment aims to stimulate production to meet the growing demands of the aviation and shipping industries.

Darragh O’Brien, Ireland’s Minister for Transport, has emphasized the need for domestic production of SAF. Currently, Ireland lacks a production facility, but O’Brien has introduced a roadmap outlining four key policy pathways: supporting production, providing market certainty, fostering collaboration, and driving SAF uptake. He advocates for utilizing existing refineries to co-process waste oils, which could facilitate the development of local production capabilities.

The Irish government has allocated €750 million in its budget for grid infrastructure aimed at supporting renewable energy expansion, which could provide a critical foundation for large-scale sustainable aviation fuel production. O’Brien has indicated the necessity for targeted grants to attract investments from industry players, stressing that better incentives for SAF production should take precedence over carbon intensity targets for consumers.

Industry Commitment and Future Steps

Irish airlines are beginning to align their strategies with the new roadmap. Aer Lingus has committed to using 10% sustainable aviation fuel by 2030, while Ryanair aims for a target of 12.5%. Fuel costs account for nearly a third of airlines’ operating expenses, making financial support vital for the successful adoption of SAF.

The Department of Transport has indicated that the roadmap will undergo future iterations to identify barriers to both the importation and domestic production of sustainable aviation fuels, ensuring alignment with EU frameworks. As the EU continues its regional efforts to decarbonize aviation and maritime shipping, the credibility of its initiatives will depend on tangible progress.

With over 40% of the global shipping fleet navigating through EU waters each year, the Union holds significant influence over emissions in the shipping sector. The EU’s emissions trading system now encompasses maritime transport, requiring companies to monitor and report their greenhouse gas emissions. While this regulation primarily affects larger vessels, it will contribute to the broader goal of reducing emissions across the industry.

As the aviation sector prepares for the challenges ahead, the EU’s investment in sustainable aviation fuel marks a crucial step toward achieving a greener future for air travel and maritime shipping.