EU launches coalition of 8 member states to accelerate e-SAF scale-up

The EU has launched the eSAF Early Movers' Coalition, bringing together eight member states that have committed to accelerating the production and uptake of synthetic aviation fuel as Europe prepares for the first mandates under ReFuelEU Aviation.

Austria, Finland, France, Germany, Luxembourg, the Netherlands, Portugal and Spain announced their participation on the sidelines of the Transport Council in Brussels on Dec. 4.

The coalition aims to mobilize at least Eur500 million ($580 million) to support large-scale e-SAF projects and to provide funding for double-sided auctions -- a price-stabilization mechanism designed to offer long-term revenue certainty for producers and competitive short-term contract prices for offtakers.

The first auction is targeted for 2026, and the coalition remains open to additional EU member states.

The initiative is a core element of the EU's Sustainable Transport Investment Plan, released in November, which seeks to accelerate investment decisions in the aviation and maritime sectors.

The European Commission expects STIP to mobilize Eur2.9 billion through 2027, including Eur153 million for synthetic aviation fuels through the Innovation Fund and Eur300 million via the European Hydrogen Bank for renewable aviation and maritime fuels.

EU Commissioner for Sustainable Transport and Tourism Apostolos Tzitzikostas said the coalition strengthens the bloc's efforts to decarbonize aviation.

"Their financial contributions will stimulate the needed investments and support swift deployment of e-SAF in the EU," he said, adding that investment decisions and project construction must begin by 2027 to avoid missing 2030 targets.

Under the ReFuelEU Aviation regulation, synthetic aviation fuels must account for 1.2% of all fuel supplied at EU airports by 2030, rising steeply to 35% by 2050.

The commission estimates that meeting the 2035 targets will require 6.8 million metric tons of aviation and maritime e-fuels. Although more than 40 commercial e-SAF projects are in development across the EU, none has yet achieved a final investment decision, an issue the commission characterizes as a "market failure" driven by high costs and a lack of long-term offtake certainty.

Industry groups welcomed the formation of the coalition. Airlines for Europe said the move showed courage among the eight participating states and urged others to join in helping to create a functional SAF market.

Hydrogen Europe described the launch as "a statement of resilience and unity," calling double-sided auctions essential for enabling airlines to sign offtake agreements and for projects to reach FID.

The hydrogen and e-fuels sector has also stressed the importance of ensuring that methanol-to-jet, or MtJ, pathways are eligible under upcoming auction designs. MtJ is expected to achieve ASTM approval by mid-2026, and proponents claim it offers a balanced approach between European production and global sourcing of green methanol.

The H2Global Foundation, whose double-auction model inspired the EU's approach, said the mechanism can bridge the gap between short-term demand from fuel buyers and the long-term investment horizons required for project financing. H2Global, Project SkyPower and Hydrogen Europe have supported EU member states in designing the pilot auction.

Work on the coalition will begin immediately, with member states expected to coordinate the design of the auction in early 2025. The pilot tender is intended to help bring the first wave of European e-SAF plants to FID in time for the 2030 sub-quota to take effect.

SAF prices for December loading continued to decline, driven by suppliers covering their 2025 compliance volumes.

Platts, part of S&P Global Energy, assessed the SAF (HEFA-SPK) FOB FARAG premium to Jet barges down $84/mt, or 4.3%, week over week at $1,870/mt. The CIF NWE premium to jet was assessed at a $10.50/mt premium to FOB FARAG barge levels.