EU to subsidise airline SAF purchases

The European Union has reportedly offered to subsidise airlines’ purchase of sustainable aviation fuel (SAF) of more than 200m litres to help increase offtake of the cleaner fuel, according to reports in the media.

The information, based on calculations seen by Reuters show that subsidies could trigger a significant boost for SAF offtake.

The EU has earmarked revenue from the sale of 20m carbon emissions permits to help airlines to cover the price gap between conventional kerosene and more expensive SAF on flights within Europe.

Reuters calculations showed these subsidies would cover purchases of up to 216m litres of e-fuels – synthetic fuels made using captured CO2 emissions – or as much as 2.6bn litres of biofuels.

The EU subsidies cover up to €6 per litre for e-fuels and €0.5 per litre for biofuels.

SAF costs three to five times more than traditional jet fuel and makes up only 0.3% of global jet fuel supply.

The EU requires 2% of fuel made available at EU airports to be SAF in 2025, rising to 6% in 2030.

Airlines must buy permits from the EU carbon market to cover their emissions from European flights. Until last year, the EU gave airlines most permits free of charge, but it is now phasing out free permits to drive faster emissions reductions.