Press release
Europe’s SAF mandate risks falling short without action on investment barriers
A targeted mechanism in the EU’s upcoming Sustainable Transport Investment Plan could help first-of-a-kind fuel producers secure financing and ramp up production in time to meet climate targets.
Berlin, 23 July 2025 — Europe has set ambitious targets for sustainable aviation fuels (SAF), but scaling next-generation, or advanced, fuels produced from non-food feedstocks and novel technologies faces a critical financing gap that could put climate goals at risk, a new report from the International Council on Clean Transportation (ICCT) finds.
Today’s SAF market is dominated by first-generation HEFA fuels from waste oils and fats—feedstocks that are in limited supply and carry sustainability risks. Meeting ReFuelEU’s targets will require advanced production pathways, including second-generation biofuels from solid waste or cellulosic feedstocks and synthetic e-kerosene produced with renewable electricity.
“Advanced fuels will be essential to reaching aviation’s global net-zero by 2050 goal,” said Chelsea Baldino, ICCT Fuels Program Lead. “But in Europe, first-mover facilities face high production costs in an uncertain market, creating a financing bottleneck that threatens the EU’s ambitious climate targets.”
These barriers remain despite the ReFuelEU Aviation regulation being one of the world’s most ambitious SAF frameworks, the report finds based on a survey of SAF developers and technology providers. The regulation mandates SAF blending to increase from 2% in 2025 to 70% by 2050, with synthetic-fuel sub-targets of 0.7 % by 2030 and 35% by 2050.
No advanced pathways have reached commercial scale (over 10,000 tonnes/year). High capital costs and price uncertainty prevent binding offtake agreements, blocking final investment decisions. Without targeted support, existing policies may favor cheaper, first-generation fuels—potentially leaving Europe short of its 0.7% synthetic-fuel target by 2030.
A revenue certainty mechanism to get advanced SAF off the ground
To bridge this financing gap, the EU could consider introducing a revenue certainty mechanism (RCM), with a focus on projects contributing to the synthetic fuel sub-mandate. An RCM could reduce financial risks for fuel producers and investors, establishing price guarantees that unlock the capital needed for advanced fuel facilities. Under the UK’s guaranteed strike price model, for example, producers agree on a target fuel price with a government counterparty. If market prices fall short, the government covers the gap; if they exceed the target, producers pay back the difference. A complementary ICCT-commissioned study highlights this approach, suggesting it could be funded by levies on emitters to enable debt financing while reducing required investor returns.
“Europe already has strong long-term SAF mandates,” said Baldino. “But participants in our survey highlighted that these alone may not be enough to move advanced fuel projects forward and pointed to the need for more revenue certainty to help attract investment. The European Commission could fund a revenue certainty mechanism through EU Emissions Trading System revenues, and the upcoming Sustainable Transport Investment Plan is a good opportunity to reference this kind of support.”
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Media contact
Sophie Ehmsen, communications@theicct.org
Publications
Title: Industry perspectives on advanced sustainable aviation fuel: what barriers remain for these technologies to scale?
Authors: Andy Navarrete, Chelsea Baldino, Nikita Pavlenko
Link: theicct.org/publication/saf-what-barriers-remain-for-these-technologies-to-scale-jul25
Title: Staying Aloft – Support Mechanisms for ‘Sustainable Aviation Fuels’ in the United Kingdom and European Union
Authors: Dr Cato Sandford and Dr Chris Malins
Link: theicct.org/publication/support-mechanisms-for-saf-in-the-uk-and-eu-jul25
About the International Council on Clean Transportation (ICCT)
The International Council on Clean Transportation (ICCT) is an independent nonprofit research organization founded to provide exceptional, objective, timely research and technical and scientific analysis to environmental regulators. Our work empowers policymakers and others worldwide to improve the environmental performance of road, marine, and air transportation to benefit public health and mitigate climate change. We began collaborating and working as a group of like-minded policymakers and technical experts, formalizing our status as a mission-driven non-governmental organization in 2005.
Find us at:
www.theicct.org
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