Europe at risk of losing global leadership in aviation e-fuels without accelerated investments
A new Transport & Environment (T&E) study warns that Europe could lose its first-mover advantage in producing e-kerosene, the most scalable sustainable aviation fuel (SAF).
Europe leads in announcements but lags in implementation
T&E’s analysis reveals that Europe holds more than half of the world’s announced e-kerosene production capacity, with around 40 large-scale projects planned that could produce close to 3 million tonnes annually — about 5% of the fuel needed by Europe’s aviation sector. This fuel could reduce aviation CO? emissions by up to 90%, making it vital for decarbonizing the emission-intensive industry.
However, despite this leadership in announced projects, none are yet under construction. Only four projects are at an advanced stage, and no final investment decisions (FID) have been made. The biggest barriers are financing challenges, high energy costs, infrastructure issues, CO? sourcing difficulties, and the notable absence of major oil companies, which continue to invest heavily in fossil fuels rather than e-kerosene.
Camile Mutrelle, Aviation Policy Officer at T&E, said “The EU’s law on sustainable aviation fuels kick-started an e-kerosene revolution in Europe – but fuel suppliers are not cashing in on this potential. Without more final investment decisions, the EU’s 2030 target and plans to prosper from green aviation will fail. To succeed, these projects need a stable legal framework, as provided by ReFuelEU, and funding through an array of public support mechanisms and private capital investments.”
Global competition and calls for stronger EU support
While Europe currently leads, other regions are gaining ground. China hosts about 10 large-scale projects, accounting for roughly 20% of global capacity. The United States is accelerating as well, with the first large-scale plant FID recently secured by US startups.
Funding bottlenecks and oil majors are hampering progress
Despite favourable conditions, e-kerosene projects continue to face significant hurdles in Europe, including challenges related to energy costs, infrastructure, and CO? sourcing. Regulatory uncertainty is also in the mix, brought about by industry pressure [6] to delay ReFuelEU’s SAF targets in anticipation of the scheduled review of the legislation in 2027
Financing poses the biggest barrier, with each plant requiring €1–2 billion in capital, bringing total capital requirements to €10 - 20 billion by 2030. EU funding mechanisms for e-kerosene are not strong enough to support the level of investment needed to get these projects off the ground, and traditional fuel suppliers are notably absent from the conversation. To date, major oil companies have made negligible contributions to e-kerosene, while continuing to spend billions on fossil fuels.
T&E calls on EU leaders to reaffirm their commitment to the existing ReFuelEU targets ahead of the 2027 legislative review and to prioritize e-kerosene in the Sustainable Transport Investment Plan (STIP). The organization also recommends establishing a European market intermediary with a double-sided auction mechanism to solve current financing bottlenecks.
Without urgent action, Europe risks losing its pioneering position in e-kerosene, a critical technology to drastically cut aviation emissions and lead the transition to sustainable air travel.
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