Recent research highlights that targeted policy interventions can significantly accelerate the adoption of sustainable aviation fuels (SAF) across Europe, with the Netherlands serving as a case study. As the aviation sector seeks to meet ambitious decarbonization goals, substantial investments are needed to develop cost-competitive SAF pathways such as e-kerosene and cellulosic fuels derived from agricultural residues.
Financial support mechanisms, including upfront capital grants and market-based incentives like emission trading allowances, are identified as the most effective tools to close the existing cost gap between SAF and conventional jet fuel. For instance, supporting approximately 40% of the capital expenses for facilities producing 50,000 tonnes of e-kerosene annually could halve the price difference, making SAF more economically viable.
Furthermore, revenues generated from the European Union Emissions Trading System could be leveraged to support SAF projects, with annual revenues projected to surpass €2 billion. These funds could be reinvested to provide direct support to SAF producers or to de-risk investments through revenue certainty mechanisms. Policies such as relaxed state aid rules, reduced electricity grid charges, and targeted national aid programs can further facilitate SAF deployment.
Overall, a combination of strategic policy measures is essential for scaling sustainable aviation fuel markets in Europe, supporting the sector’s transition towards sustainable aviation and meeting climate targets effectively.
