European SAF Soaring to Meet Demand 

In February, in Vienna, leaders from across the aviation, energy, and finance sectors gathered at ESF Europe to tackle the future of Sustainable Aviation Fuel. The discussions focused on scaling SAF, aligning policy with investment, and unlocking Europe’s potential for climate leadership and energy independence.

SAF is ready for takeoff, Europe just needs to clear the runway. Offering not just lower emissions, but a path to reindustrialise and boost energy resilience, SAF holds strategic value in the energy transition. The panel “European SAF: Soaring to Meet Demand” dives into how policy, investment, and innovation must align to turn momentum into market reality.

• The energy trilemma frames the challenge – Europe must balance sustainability, supply security, and affordability. While SAF is a promising pathway toward decarbonising air travel, it must be scaled to reflect real-world constraints and balance these competing demands.

• SAF is a strategic lever for reindustrialisation – Beyond decarbonisation, SAF offers Europe a chance to reindustrialise, create high-value jobs, and enhance energy independence. A competitive local market, supported by the right policy framework, is essential to realising this opportunity.

• SAF is a defined market, but rigid targets risk misalignment – SAF quotas provide a structured demand signal, but rigid percentage-based mandates may not align with the unpredictable nature of production scale-up. A more flexible, adaptive approach is needed to align policy with capacity growth and investor readiness.

• Feedstock limitations and technology gaps constrain scale – HEFA, the most mature SAF pathway, is limited by the availability of lipids and used cooking oils, which are already capped under EU regulation. Competing demand from maritime fuels adds further pressure. To scale meaningfully, the industry must accelerate the development of alternative pathways like Fischer-Tropsch, pyrolysis, AtJ, and e-SAF. However, these technologies face challenges, from high costs and limited feedstock availability to infrastructure and regulatory hurdles.

• Cost remains a major barrier to long-term adoption – SAF’s cost premium is manageable at low blend levels, but as mandates rise, the financial burden will grow. e-SAF, in particular, remains expensive due to the high cost of green hydrogen and renewable electricity. These costs will ultimately be passed to end users, raising concerns about competitiveness and public acceptance.

• Investment barriers – Post-COVID, inflation has significantly increased CapEx, making it harder for SAF projects to reach FID. Investors seek greater certainty around both feedstock supply and long-term offtake agreements however, airline commitment to long-term contracts remains slow and limited. To de-risk investment, indexed pricing structures and strategic partnerships, such as the emerging collaboration between Gevo and Axens, offer pathways to greater financial viability and investor confidence.

• Bridging the stakeholder gaps – SAF development depends on integrated planning and close coordination between technology developers, investors, and end users. Unlike fossil fuels, SAF projects are not commoditised. Strategic partnerships, such as between OMV and Airbus, accelerate deployment, expand market reach, and support policy development. Bridging the gaps across the value chain is critical to ensuring feedstock security, offtake certainty, and long-term viability.

• The “magic triangle” – SAF is a cornerstone of net-zero aviation. Success depends on aligning policy, demand, and supply - the “magic triangle.” Imbalances in any area risk stalling progress. Achieving targets depends on maintaining clear mandates and political resolve. Transparent communication and visible public benefits are essential to building trust and sustaining support, especially as higher travel costs emerge.

• RefuelEU provides a foundation, but stable, long-term policy is vital – RefuelEU mandates SAF availability at all EU airports by 2035, with a steep ramp-up from 2% in 2025 to 6% in 2030. While it offers strong growth potential, success depends on consistent, long-term regulatory frameworks. Grandfathering clauses, reinvesting ETS revenues into aviation, and early-stage DevEx support are critical to protecting first movers and ensuring fair market development.

• Mandate enforcement and global volatility threaten momentum – Over 3 million tons of SAF projects are in development, but political uncertainty could undermine progress. Delays in US policy implementation and rising CapEx are slowing timelines and reducing export volumes. Europe must lead with a robust, enforceable regulatory framework and build domestic capacity to buffer against external market fluctuations.

• Contrails: an emerging climate concern – While CO₂ emissions have traditionally dominated the aviation climate conversation, contrails are gaining attention as a significant and growing contributor to aviation's overall climate impact. Aromatic compounds in jet fuel contribute to contrail formation, but current fuel standards limit SAF blending to 50% and require a minimum aromatic content. Revisiting these standards could unlock the full climate benefit of synthetic SAFs and simplify fuel development.

• Strong momentum toward 2030 targets, with cautious optimism – Early progress, growing production pipelines, and broad alignment across the value chain suggest that 2030 targets are within reach. The next five years are a critical learning phase. Continued success will depend on scaling up capacity, refining technical standards, and leveraging incentives and flexible market mechanisms. The integration of multiple SAF pathways is critical, and first movers must be protected from being disadvantaged by cheaper second-wave projects. Collaboration across stakeholders will be key to unlocking SAF’s full climate and economic potential.

This summary is a takeaway from our ESF Europe Post Event Report. If you found these insights valuable and want to explore the full analysis, challenges, and opportunities, read the full report here.

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