Money is flowing to SAF, but is Europe funding the right long term pathway?
The Commission published on 15 September how much money from the EU Emissions Trading Scheme (EU ETS) has been reinvested to support airlines’ uptake of sustainable aviation fuels (SAFs) in 2025. Introduced by the EU ETS Directive in 2023, this system accelerates the uptake of SAF by granting airlines free EU ETS allowances.
In 2025, European airlines that were already using SAF received 5.2 million of these ETS allowances (worth over €400 million in total), which covered 50-70% of the price difference between bio-SAF and fossil kerosene on ETS-covered routes (and even 100% on routes departing from islands and outermost regions). However, the 530 000 tonnes of SAF claimed consisted almost only of conventional biofuels, primarily made from used cooking oils (UCO) and animal fats, which is the only type of SAF currently commercially available. This means the current scheme, as designed, provides no support to less mature and more expensive (but more scalable and sustainable) pathways, including e-SAF.
The Commission's proposal to phase out support for waste-oil SAF from 2030 is therefore an important shift: public support should increasingly go towards the SAF pathways that need it most to scale.
At the current rate of usage, the pot won’t last until 2030
The 2024-25 allocations have already used 6.5 million of the 20 million allowances set aside until 2030, leaving 13.5 million allowances available. We estimate that there are only two years' worth of SAF allowances left. The current pool could therefore be exhausted by 2028 at the latest.
Who is benefitting the most?
The support was distributed among around 130 operators.
Overall, the scheme fully pays for a substantial share of European airlines’ total SAF use: Europe’s top SAF allowance recipients got between 20 and 50% of their individual SAF bills fully reimbursed via ETS allowances. However, as SAF allowances were initially designed to cover only intra-European flights, long-haul carriers such as IAG have received relatively less support (compared to their total SAF use), as more of their SAF is burned outside the scope of the ETS, compared to short-haul carriers.
This “proportionality principle” was designed to ensure airlines who pay relatively more under the ETS are also eligible for more SAF support. The Commission's ETS revision proposal doesn’t uphold that principle but the European Parliament and the Council have an opportunity to bring it back.
Related Articles
View All
Tackling contrails could avoid 10 years of aviation-related climate warming - new research
A way forward for contrail mitigation
T&E briefing on Klima Consulting’s review of the science and technology of contrail mitigation
ReFuelEU’s first year shows the mandate works
Now Europe must unlock e-SAF investment.