How to play a monster hand on the eSAF mandate

opinion

by Fayaz Hussain

March 24, 2026

Poker can be a tough game to master. You have no say in the cards you are dealt. Only when you see the cards you decide what strategy to pursue to play the hand.

Players involved in Europe’s electro sustainable aviation fuel (eSAF) industry are facing a similar high-stakes game. Airlines have seen their hand – supply gap and billions in penalties – and want to fold before the all-important river card arrives in 2030 (eSAF sub-mandate kicks in in 2030). eSAF producers, on the other hand, have skin in the game.

“The 2030 eSAF sub-mandate must be postponed until eSAF is sufficiently available and affordable”, according to a statement this week from Airlines For Europe (A4E) backed by more than 16 members. The organisation has a point.

It argues that projects, currently at the final investment decision (FID) can only deliver “a mere 0.71% of the volumes mandated under the 2030 EU eSAF sub-mandate.” The more-than-99% gap in production would lead to penalties passed from fuel suppliers to airlines.

A4E says passengers would have to absorb “€7-9bn [$8-10.4bn] of penalties with no environmental benefits.” On those numbers, A4E has told the European Commission that the sub-mandate “must be postponed until eSAF is sufficiently available and affordable”. In poker jargon, it wants to fold its hand and sit out until the table turns in its favour.

But there are other players who argue that fixing shortcomings instead of abandoning the sub-mandate should be the way forward.

“Early cost reduction in eSAF is driven by policy, not scale,” Amy Hebert, CEO of Arcadia eFuels and co-chair of SkyPower tells SAF Investor. “The certainty provided by ReFuelEU is single-handedly what allows us to access public support, secure offtake agreements and move projects forward.”

Project SkyPower says there are more than ten European commercial-scale eSAF projects that are mature enough to begin production by 2030 or 2031. But none of them have reached FID. While A4E reads this as evidence that it might be too early to implement eSAF sub-mandate, SkyPower sees this as the industry being on the cusp of achieving the desired scale to deliver on the targets.

It says that the steps announced under the Sustainable Transport Investment Plan, such as the €2bn-plus double-sided auction, need to be allowed to work. “Delays or short-term fixes will not resolve market tensions but risk freezing investment, eroding Europe’s leadership position, and slowing the transition to competitive eSAF,” the coalition tells us.

KLM-France finds itself on both sides of the table. The company was a founding member of both A4E and Project SkyPower.

“eSAF is an indispensable pillar of aviation’s future; as an airline, we are fully committed to making it a reality. However, it is crucial to have a regulatory framework that reflects market realities and enables the industry to make the necessary investments,” says Marjam Rintel, CEO of KLM and co-chair of SkyPower, which represents the airline in the coalition. The key word here is reflect not retreat.

While airlines and producers may have different views, other stakeholders watching this high-stakes game from the sidelines say the worst thing anyone can do at the table is let investors think the rules might change mid hand.

“This would be a disastrous signal to investors because then they cannot rely on the regulatory framework. It would mean a severe step back for those who want to unlock the eSAF market,” Dirk Janssen, partner at Watson Farley & Williams and one of the legal architects of some of Europe’s most significant eSAF transactions, tells SAF Investor.

His solution is not to ease the pressure but intensify it in the right direction. Instead of softening the mandate, the focus should shift to fuel suppliers – entities liable under ReFuelEU – and force consequences of con-compliance now instead of waiting until 2030, he says.

If fuel suppliers know today that that the penalties are coming and that eSAF supply will not materialise in time, they have no choice but to act on that liability immediately, Janssen adds.

“The fuel suppliers need to build accruals in their balance sheet – and this would then really be a pain point,” he tells us. Pain today, he says, will prompt investment decisions sooner. But this is only possible if the mandate holds. “Therefore, it must be certain that the mandates remain as they are.”

The European Commission is set to review the ReFuelEU next year. Janssen says that would be a good time to fix reporting standards, align penalty structures and close implementation gaps. “These kind of amendments are absolutely necessary and right, but we should not touch the mandates,” Janssen stresses.

Trishla Shah of Project SkyPower Secretariat tells us: “With the review coming up, the priority is to show that the mandate can deliver real projects in time. Project SkyPower members are focusing on helping the most advanced eSAF projects get to FID through targeted financial de-risking, working with public financial institutions.“

“Overall, it’s about demonstrating progress on the ground so the framework is seen as credible and investable going into the review.”

The eSAF mandate is a difficult hand. But the chips are down. This is not the time to throw in the hand but it is the moment to call.