Brussels Commits €3 Billion to Sustainable Aviation Fuel as Industry Warns of Funding Shortfall

The European Commission unveiled its Sustainable Transport Investment Plan in early November, pledging nearly €3 billion through 2027 to accelerate sustainable aviation fuel production and bridge the gap between regulatory mandates and manufacturing capacity. Yet industry stakeholders warn the commitment falls substantially short of the €100 billion investment required by 2035 to meet decarbonization targets.

The plan responds to escalating pressure under the ReFuelEU Aviation Regulation, which mandates minimum 2% sustainable aviation fuel at EU airports from 2025, rising to 70% by 2050, with synthetic e-fuel sub-targets beginning in 2030. Europe currently produces less than 300,000 tonnes annually against an estimated 7 million tonnes needed by 2035 to remain on trajectory for net-zero aviation.

InvestEU will mobilise at least €2 billion for sustainable alternative fuels through 2027, whilst the European Hydrogen Bank will provide €300 million by year-end supporting hydrogen production for aviation and maritime fuels. The Innovation Fund will contribute €153 million for synthetic aviation fuel projects, complemented by €133 million under Horizon Europe for research into advanced biofuels and synthetic alternatives.

The Commission proposes establishing a double-sided auction mechanism connecting suppliers and consumers through a market intermediary, offering long-term contracts providing revenue certainty to fuel producers whilst maintaining short-term offtake arrangements. An eSAF Early Movers Coalition pilot project aims to mobilise €500 million for synthetic e-fuel production.

Industry consortium Destination 2050 welcomed the double-sided auction signal but expressed concern the announced funding appears disappointingly low given the investment scale required. The group called for extending SAF allowances under the EU Emissions Trading System beyond 2030, noting the plan falls short of providing necessary certainty. Airbus stated the initiative would help ensure fuel availability keeps pace with certification and airline demand, whilst Rolls-Royce termed it crucial for maintaining decarbonisation momentum.