EU Parliament adopts new targets set to boost sustainable aviation fuel supply

The European Parliament adopted Sept. 13 proposals for binding targets to boost the uptake of sustainable aviation fuels in a major boost for supplies of SAF in the region.

Under the RefuelEU aviation rules, fuel suppliers will need to blend SAF into aviation fuel in increasing amounts, from 2% of overall fuel supplied at EU airports by 2025 to 70% by 2050. In addition, a specific proportion of the fuel mix (1.2% in 2030 rising to 35% in 2050) must comprise synthetic fuels like e-kerosene.

Under the law, aircraft operators departing from EU airports will only be allowed to refuel with fuel necessary for flight to avoid emissions related to extra weight or carbon leakage caused by 'tankering', or deliberately carrying excess fuel to avoid refueling with SAF.

The move comes a day after the European Parliament adopted the updated Renewable Energy Directive, which forms a key part of the EU's climate policy. EU lawmakers approved the revised directive, which raises the share of renewables in the EU's final energy consumption to 42.5% by 2030 from 32%, with the aim of achieving 45%.

The Renewable Energy Directive, or EU RED III, will be incorporated into law in EU Member States while the ReFuel EU Aviation regulation will be directly applicable across the EU.

"This is a tremendous step towards the decarbonisation of aviation," Parliament's rapporteur Jose Ramon Bauza Diaz said in a statement. "It is now time for EU governments to implement the new rules and support the industry to ensure the cost-effective deployment of Sustainable Aviation Fuels across Europe as well as meeting EU targets."

Book and claim

Most SAF production depends on the availability of waste and residue oils and fats (52%) and vegetable oils (36%), while ethanol, woody residues and wastes provide the remainder. SAF is sold at a significant premium to conventional jet fuel and demand is ramping up fast in order to meet EU SAF supply targets. Platts, part of S&P Global Commodity Insights, assessed SAF delivered CIF in the ARA region at $3,049.7/mt on Sept. 12, a $2,000/mt premium to conventional jet fuel.

Under the RefuelEU rules, SAF includes synthetic fuels, certain biofuels produced from agricultural or forestry residues, algae, bio-waste, used cooking oil or certain animal fats. Recycled jet fuels produced from waste gases and waste plastic are also considered 'green'.

The regulation also allows for a so-called "book and claim" system of tradable SAF supply and purchase certificates to be established to create a flexible market for SAF fueling across the EU's airports. It also provides for measures to avoid aircraft operators double claiming the reduction of emissions for SAF under other greenhouse gas schemes such as the EU ETS or CORSIA.

"In order to further promote the uptake of SAF in the Union, for which prices are projected to have a substantial price difference compared to conventional aviation fuels in the foreseeable future, aircraft operators should be able to claim allowances for the uplifting of SAF in accordance with the EU ETS," the regulation states.

Finnish refiner and major renewable fuel maker Neste applauded the passing of the ReFuel EU Aviation and EU RED III, as key planks in boosting demand for renewable energy to help meet climate goals.

"As well as increasing emission reduction targets, both pieces of legislation create demand certainty, which is needed to attract investments towards the production of renewable fuels, while remaining consistent on the eligibility of raw materials permitted in sustainable biofuels," Neste said.

Once the European Council has approved them, the new rules will apply as of Jan 1, 2024, and some provisions as of Jan. 1, 2025.