Estimating sustainable aviation fuel feedstock availability to meet growing European Union demand
An assessment of the policy options for driving sustainable aviation fuels in the European Union
Despite years of sustained interest in sustainable aviation fuels (SAFs), the industry has been slow to expand in the face of strong economic barriers to deployment. The European Commission’s 2020 ReFuelEU Aviation Initiative aims to boost the production and supply of SAFs, and it is critical that policies guide investment and development toward technologies that are capable of delivering long-term decarbonization. This briefing paper explores the policy options available to increase SAF deployment in the EU and discusses their benefits and drawbacks. Based on the assessment of policy options, the following recommendations can be drawn from the analysis:
- Advanced SAFs will require targeted policy support. To support an SAF industry based on sustainable, low-carbon fuels, it may be necessary to introduce strict eligibility criteria or an advanced SAF-only policy to ensure that policy support goes toward those fuels that offer meaningful GHG reductions. While these decisions would constrain the contribution of volumes supplied in the near term, investors and producers would have increased confidence that investments in projects and technologies over the next decade could contribute to decarbonization objectives long after 2030.
- Develop policy targets based on a realistic assessment of feedstock availability and technology deployment. Beyond the near-term potential to produce approximately 2% of EU jet fuel demand from waste oils and fats, the contribution and commercialization timeline for other advanced SAF pathways is less certain. Utilizing data on feedstock availability and realistic projections of technology deployment rates will help to ensure that policy targets maintain regulatory certainty and are achievable.
- SAF multipliers may not be effective at driving new advanced-fuel production. The European Union already consumes most of its domestic waste oil in producing hydrotreated renewable diesel. Increasing the multiplier for SAFs within the RED II could be counterproductive by incentivizing biorefineries to maximize jet fuel while reducing their net liquid fuel production. This could increase the short-term availability of SAFs without sending a sufficient signal to induce new production.
- Direct financial support may be necessary in the early stages of SAF policy. Reaching higher advanced SAF blending rates requires investing in more challenging pathways with higher costs and uncertain commercialization timelines than SAFs derived from waste oil. In the near term, these pathways’ production costs are likely to exceed €1 per liter, which is approximately 2.5 times the current wholesale jet fuel price, and will require some form of policy support to reach cost parity with conventional jet fuel. A central auctioning mechanism to secure a price floor and market for advanced SAFs could complement other policies while providing greater policy certainty.
The ReFuelEU initiative offers a critical opportunity to set the tone for the next several decades of aviation climate policy. It is important to note that SAF alone is not the linchpin for decarbonizing aviation. Complementary policy efforts should also be explored to reduce emissions.