(ENJ) PRESSURE ON TO SCALE UP SAF PRODUCTION

Sustainable Aviation Fuel could cut 90% of emissions compared to traditional alternatives, but take-off is being delayed by policymakers.

Project SkyPower is the European Union’s leading pro-SAF organisation, and members have now backed an open letter calling for urgent policy updates to drive expansion of the sector.

Air travel is one of the biggest transport contributors to global emissions, and environmental groups have warned the current rate of expansion is far outpacing the speed at which new technologies are bringing down emissions.

Hopes have long been pinned on developing sustainable jet fuel, which economists also argue would help boost industry. However, critics contest that this solution is hamstrung by high costs and lack of production capacity, and the priorities should be encouraging other travel modes that are less harmful to the environment.

All 15 Project SkyPower members – some of the most influential aviation CEOs on the continent – have now published an open letter demanding EU leadership offer greater support to the SAF sector. This has been backed by 70 individual companies with interests in development. Steps that should be taken to increase production include:

Strategic priority in the Clean Industrial Deal and the Sustainable Transport Investment Plan (STIP): The European Commission should include e-SAF as a strategic priority in the Clean Industrial Deal and as a critical part of the Sustainable Transport Investment Plan, helping drive the scale-up from innovation to commercialisation.

Recycle ETS revenues from aviation to capitalise a market intermediary that enters auctioned, 10- 15-year contracts with e-SAF producers and 3-5 year contracts with off-takers: Recycling ETS revenues via SAF Allowances is critical for the continued competitiveness of airlines, but doesn’t benefit e-SAF projects which require long-term offtake contracts to make first-of-a-kind e-SAF plants bankable. ETS revenues from aviation could be used to capitalise a market intermediary to provide the minimum level of public support required for revenue certainty.

Establish a bridging mechanism in 2025 until a capitalised market intermediary comes online, to give first movers priority access to the new funding instrument: Only the first pioneering large-scale e-SAF projects will reach FID by 2025-27 – a requirement to be operational by 2030/31 and have a realistic chance of contributing to the EU’s initial e-SAF sub-mandates. To avoid delaying action while a capitalised market intermediary is being operationalised (1-2 years), the European Commission should guarantee priority access to this market intermediary for these pioneering projects.

Provide long-term certainty over mandates, production criteria and penalties: The EU should use proactive communications to remove uncertainty around continued enforcement of e-SAF mandates post-ReFuelEU Aviation review in 2027, as well as continued enforcement of current e-SAF production criteria. Member States should also publish harmonised penalty guidance as soon as possible.

Mitigate project-on-project risk via government-backed backstop mechanism: To mitigate the challenges e-SAF project developers face in financing dedicated production facilities for renewable electricity and CO2, the European Commission should establish a financial backstop ensuring debt service payments can be made until such facilities become operational. More of this article (Environment Journal) - link - more like this (SAF) - link - more like this (aviation) - link