LE BOURGET: Over 30 organizations, including Air France-KLM, SAS and easyJet, have jointly called on European Union (EU) governments to fund an initial electro-sustainable aviation fuel (eSAF) trial auction to accelerate production ramp up.
At the Paris Air Show on Monday, the stakeholders, brought together under the 75-member Project SkyPower coalition, sent an open letter to EU member state governments asking them to fund an eSAF pilot auction via H2Global. The push comes ahead of the first European eSAF mandates taking effect in Germany (2026), the UK (2028) and the EU (2030).
Electro-sustainable aviation fuel, which is also known as power-to-liquid (PtL), is a low-emissions kerosene replacement that can be synthetically manufactured from water, carbon dioxide and renewable electricity, creating a virtually unlimited supply.
However, eSAF production is caught in a chicken-and-egg dilemma in which eSAF producers need long-term contracts, but most airlines cannot afford to tie themselves into long-term contracts at today’s prices, which are up to 10 times the cost of traditional kerosene.
To date, no EU commercial-scale eSAF projects have reached final investment decision and only a third of the mandated supply is on track to be available by 2030.
With European Commission input, Project SkyPower developed a double-sided auction mechanism to help kickstart the EU eSAF market. This model, which has already been used by H2Global in the green ammonia sector, would match the lowest cost producers and highest offtake bids, and the government funding would be used to bridge any price differential.
“This intermediary would act like a government-backed commodity trader, purchasing e-SAF in long-term contracts to provide revenue certainty to producers and selling in short-term contracts,” Project SkyPower said, noting its plans to continue working with the EU on the model.
The signatories included Airlines for Europe (A4E), Air France-KLM, Boeing, Copenhagen Airports, easyJet and SAS, plus a number of eSAF suppliers and financiers.
During a separate Paris Air Show briefing, executives from Air France-KLM and Airbus also called on the EU to extend EU emissions trading system SAF allowances and consider introduction of a formalized book-and-claim system. Under book-and-claim, companies can buy SAF for use elsewhere, when there is no local supply.
The EU is developing the Sustainable Transport Investment Plan (STIP), which is expected to be finalized in Q3. Aviation stakeholders are pushing for SAF and eSAF to be included in the STIP.
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