ReFuelEU: what is it and how will it impact the aviation industry?

The aviation industry is one of the major contributors to carbon dioxide (CO₂) emissions caused by human activity. To address this issue, the EU has introduced the ReFuelEU Aviation Regulation (ReFuelEU). This regulation requires that at least 2% of the fuel provided at Union airports annually from 2025 onwards will need to be sustainable aviation fuel (SAF). This minimum share will increase further over the following years, so that by 2050 at least 70% of all aviation fuel supplied at these airports will have to be SAF.

For the purpose of ReFuelEU, sustainable aviation fuels (SAF) are defined as synthetic aviation fuels, biofuels, or fuels produced from recycled carbon. These fuels are, when blended with fossil-based jet fuel to meet ASTM jet fuel specifications, drop-in solutions, which means they can easily be used in existing aircraft and fuel distribution infrastructures.

“For producers, investors, and key stakeholders in SAF industry, this mandate is a welcome and important signal that there will be demand,” says Alexander Kueper, Vice President Renewable Aviation Business at Neste, the leading global producer of sustainable aviation fuel and renewable diesel. 

Stepping into 2025, Kueper is confident that the aviation industry is ready, and that crucially there is enough SAF available. “With our SAF production capability of around 1.5 million tons per annum, Neste could fulfill the entire mandate from 2025 to 2029. However, all available SAF volumes will be needed for the industry to reduce its emissions to reach the industry's net-zero target,” he says. 

What are the key provisions of ReFuelEU?

Switching the aviation industry to more sustainable fuels is a big task, but by incrementally increasing the share of sustainable aviation fuel, the change for airports, airlines and fuel suppliers will be gradual.

Initially, sustainable aviation fuel will need to be made available at Union airports that see a lot of passenger or freight traffic. Smaller EU airports can choose to opt into the scope of ReFuelEU and thereby ensure SAF supply there as well.

While ReFuelEU will have a big impact for fuel producers and airlines, the situation at airports will not be that different from what it is now. “Because blended SAF is a drop-in solution there's no change needed in the airport fuel infrastructure,” says Kueper. 

Should each country and airport individually meet the ReFuelEU criteria?

One aspect of the ReFuelEU mandate that could use more clarification is how the required volumes of SAF should be delivered. Will the 2% minimum share apply per country, or is it an overall average for the entire EU?

In the first ten years, a SAF flexibility mechanism allows the blending obligation to be averaged across Union airports. This means that the targets can be over-achieved in some airports and that in other airports no SAF needs to be blended initially. 

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“Under the 10-year flexibility mechanism it is foreseen that as an aviation fuel supplier you don't need to deliver the 2% at every Union airport, but as a weighted average across all Union airports you supply at. This allows the industry to slowly phase in and establish the SAF supply chain across Europe,” says Kueper. 

“But the question is,” Kueper adds, “if you're an aviation fuel supplier with fuel supply in several countries, can you then put everything into one airport, or do you need to fulfill the mandate within every country?”

Kueper expects, based on the current information available to industry, that the SAF supply obligation will probably mostly apply on a country level rather than EU-wide.

Looking ahead: The future outlook of ReFuelEU

In the short term, there will be sufficient SAF available to meet the targets. However, the long-term implementation of ReFuelEU hinges on several key factors. To encourage the necessary investments for scaling up production in the mid-to-long term, greater clarity and alignment with other EU policies are needed.

"To provide grounds for European investments in the mid-to-long term, we need clarity, better alignment with other EU regulations as well as a level playing field with SAF producers outside of Europe exporting their products to the region," says Kueper.

Although some aspects of the legislation still needs to be clarified, Kueper is positive about ReFuelEU. “This is a really good thing for the climate and the industry. And over the next few decades, we’ll hopefully see the effect of the new mandate result in significantly reduced emissions from the aviation industry,” he concludes.