A GHG reduction obligation for sustainableaviation fuels (SAF) in the EU and in Germany

Despite various legal drivers already in place, a large-scale use of sustainable aviation fuels (SAF) is still missing. Thus, bringing SAF for GHG reduction reasons into the day-to-day business more effective market injection mechanisms are needed. In this context, direct and indirect effects of a greenhouse gas (GHG) reduction obligation in the EU and in Germany are analysed, considering an obligation level of 2% in 2023 increasing stepwise to 10% by 2030 following the goals derived from transport-related RED II targets. For such GHG reduction obligations referred to the entire EU 27 and the entire German aviation fuel uplifts, obligation induced SAF demands possibly exceed future SAF production quantities by a factor of about two without effective capacity expansion exceeding the published expansion plans. The considered SAF options lead to an aviation fuel price increases of 5–45% referring to a conventional aviation fuel price of 550 €/t. Aviation related EU ETS and German aviation tax revenues are mostly insufficient to significantly cover obligation-induced SAF costs or additional fuel costs. Fostering a broad spectrum of SAF technologies will thus require obligation related sub-mechanisms, due to (significantly) different SAF compliance costs. Thereby, sub-mandates represent the most effective approach. In terms of obligation avoidance measures, tankering – in contrast to three re-routing options considered – is likely to be economically feasible for airlines and requires appropriate countermeasures.

Subjects

Aviation

GHG reduction obligation

Market injection mechanism

SAF

SAF mandate

SAF market Implementation

Steering mechanism

Sustainable aviation fuel

Options

A GHG reduction obligation for sustainableaviation fuels (SAF) in the EU and in Germany