Europe’s Push For Sustainable Aviation Fuels Needs More Than Mandates

Europe's Sustainable Aviation Fuel (SAF) mandates are driving demand but require stronger producer incentives and market design to unlock domestic supply. Without intervention, Europe risks missing climate goals and becoming overly dependent on fuel imports.

Key Takeaways

• 1.Europe's current mandate-led strategy for SAF is insufficient to scale production capacity without additional price support and supply-side incentives.
• 2.There is a significant mismatch between producer needs for 10-15 year offtake contracts and airline preferences for shorter-term commitments.
• 3.Reliance on HEFA feedstocks creates a risk of crowding out advanced biofuels, suggesting a need for more diversified feedstock strategy in Europe.

Table of Contents

• The good news: SAF is aviation’s clearest route to decarbonise some of its emissions
• The bad news: the price gap is still a key bottleneck and won't disappear anytime soon
• SAF prices are expected to remain elevated in key aviation fuel hubs
• Europe has sticks, but it also needs carrots
• The tenure mismatch is where projects get stuck
• The sensitive issue: SAF scale depends on feedstock choices
• Conclusion: mandates start markets, design scales them

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