A Guide to ReFuel EU initiative for the Aviation Sector

Our guide to the ReFuel EU Initiative delves into key aspects of this regulation. This initiative sits within the broader EU’s Fit for 55 package, carries the ambitious objective of significantly curbing the aviation industry’s carbon footprint by mandating the use of sustainable aviation fuels (SAF).

The aviation sector is responsible for a significant portion of global greenhouse gas (GHG) emissions, making it a focal point in the broader effort to combat climate change.

Our Guide to ReFuel EU regulation covers:

What is the ReFuel EU?

The Refuel EU Aviation initiative is a regulation that is part of the EU’s Fit for 55 package. The initiative aims to reduce the EU’s net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels, by increasing both demand for and supply of sustainable aviation fuels (SAF).

Formally titled as the ‘Regulation for Ensuring Equitable Conditions in Sustainable Air Transport,’ the Refuel EU Aviation initiative aims to create a level playing field for sustainable air transport and driving the decarbonization of the aviation industry.

On September 9, 2023, the EU officially adopted the Refuel EU Aviation Regulation and the revised Renewable Energy Directive, marking a significant milestone in the European climate strategy. EU countries must now approve the deal before it can pass into law.

These regulatory measures now establish legally binding climate targets across all major sectors of the economy. Under the Refuel EU Aviation Regulation, aviation fuel suppliers are mandated to progressively blend increasing amounts of sustainable aviation fuels (SAF) with kerosene. This begins with a minimum blend of 2% in 2025 and escalates to 70% by 2050.

 

The main objective of ReFuel EU

The legislation is designed to steer the aviation industry toward these environmental goals, with SAFs serving as essential tools for reducing carbon emissions in the short and medium term. It aims to rectify the existing impediments to SAF development, such as low supply and significantly higher costs in comparison to traditional fossil fuels.

What is SAF and how is it produced?

Sustainable aviation fuel (SAF), often referred to as “drop-in fuel,” provides a unique advantage by seamlessly integrating into existing aircraft and engines, eliminating the need for costly modifications or new technology. It offers reduced emissions throughout its lifecycle, with significant environmental benefits achieved during its production process compared to traditional fossil jet fuel, such as Jet A-1.

SAF is an alternative fuel that reduces emissions in air transportation. It is derived from non-petroleum-based renewable sources, including agricultural and forestry residues, algae, bio-waste, woody biomass, fats/greases/oils, and other feedstocks.

SAF production pathways:

Sustainable aviation fuel (SAF) can be produced from various feedstocks and production pathways.

  • Hydro processed Esters and Fatty Acids (HEFA): This pathway involves the conversion of vegetable oils or animal fats into SAF through hydro-processing. HEFA is currently the most scalable SAF production pathway
  • Alcohol-to-Jet (ATJ): This pathway involves the conversion of alcohols, such as ethanol or methanol, into SAF through dehydration and oligomerization
  • Fischer-Tropsch (FT): This pathway involves the conversion of syngas, which is a mixture of carbon monoxide and hydrogen, into SAF through a series of chemical reactions
  • Renewable Hydrogen: This pathway involves the production of hydrogen from renewable sources, such as wind or solar power, and its subsequent use in the production of SAF
  • Recycled Carbon Aviation Fuels: This pathway involves the capture of carbon dioxide from industrial processes or direct air capture and its subsequent conversion into SAF

SAF production is still in its early stages, with an estimated EU supply of less than 0.05% of total jet fuel demand in 2020.

The growing adoption of SAF is propelled by corporate emission reduction goals, increasing policy focus, passenger interest in more eco-friendly air travel options and the ReFuel EU initiative. ReFuel EU aims to increase the use of SAF by obliging fuel suppliers to distribute an increasing share of SAF over time, with SAF targets set for 2025, 2030, 2035, and 2050.

 

Who does ReFuel EU apply to?

ReFuel EU applies to the following:

  • Airlines: operating within the EU, which means all departures from EU airports irrespective of the destination. This means that every flight departing from major EU airports must include a minimum SAF blend, regardless of the airline’s origin.
  • Airports: EU airports must provide the necessary infrastructure for SAF storage and blending to support fuel suppliers and airlines in fulfilling their obligations.
  • Fuel suppliers: operating within the EU. Fuel suppliers must ensure that 2% of fuel made available at EU airports is SAF in 2025, rising to 6% in 2030, 20% in 2035, and gradually to 70% in 2050.

Non-compliance with the ReFuel mandate could result in financial penalties.

The potential impact of ReFuel EU

The ReFuel EU Aviation initiative will have a significant environmental impact, as it aims to reduce the carbon footprint of the aviation industry through the use of SAF.

The International Civil Aviation Organization (ICAO) estimates that SAF could contribute around 65% of the reduction in emissions needed for aviation to reach net-zero by 2050. (1)

However, the use of SAF may increase the cost of fuel for airlines, as SAF is currently more expensive than conventional jet fuel. Fuel suppliers may also face additional costs to ensure EU airports have the necessary infrastructure for storage and blending of SAF.

Overall, the initiative would reduce our consumption of imported fossil fuels, which could lead to lower fossil fuel imports and reduce our vulnerability to supply disruptions. Reducing our demand for petroleum could also reduce its price, generating economic benefits for consumers.

Aviation ReFuel EU Timeline:

  • December 11, 2019: The European Commission adopted a Communication on The European Green Deal, which highlights the need to reduce transport emissions by 90% by 2050.
  • July 14, 2021: The European Commission presented the Fit for 55 package, which includes the RefuelEU Aviation Initiative proposal to ensure a level playing field for sustainable air transport.
  • April 25, 2023: Parliament and Council negotiators reached a provisional agreement for the new rules.
  • September 13, 2023: The Parliament approved the agreement.

Throughout this timeline, there have been discussions, proposals, and negotiations related to the RefuelEU Aviation Initiative, with various stakeholders proposing changes and amendments to the Commission’s proposal. The initiative aims to gradually increase the share of sustainable aviation fuels supplied to operators at EU airports, with the goal of reducing emissions from the aviation sector. The Parliament’s approval of the agreement on September 13, 2023, marks a significant milestone in the implementation of the initiative.

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Main provisions under ReFuel EU legislation

The ReFuel EU includes a range of provisions aimed at increasing the production and use of SAF such as:

  • SAF Targets
  • SAF certification scheme
  • The scope of eligible SAF
  • Limit on Jet Fuel Uptake
  • Flexibility of Synthetic Aviation Fuels
  • Labelling schemes

SAF targets

The legislation mandates aviation fuel suppliers to guarantee a gradual incorporation of sustainable aviation fuels (SAF) and synthetic fuels into all fuels provided to aircraft operators at EU airports. Beginning in 2025, a minimum share of SAF is required, and from 2030, a minimum share of synthetic fuels becomes compulsory. These proportions will progressively increase, culminating in the year 2050. The stipulated targets demand that fuel suppliers include 2% SAF in 2025, 6% in 2030, and a substantial 70% in 2050. Additionally, starting in 2030, 1.2% of the fuels must be synthetic, rising to an ambitious 35% by 2050.

SAF certification scheme

Under ReFuel EU, it includes a certification scheme for sustainable aviation fuels, which aims to help consumers make informed choices about the environmental performance of aircraft operators using SAF. For SAF to qualify as a CEF (Certified Emission Factor), it must meet certain criteria as certified by an independent approved Sustainability Certification Scheme (SCS).

The scope of eligible SAF

The scope of eligible sustainable aviation fuels and synthetic aviation fuels under the ReFuel EU Aviation initiative

Types of SAF

  • Certified biofuels: These are biofuels produced from agricultural or forestry residues, algae, and bio-waste.
  • Renewable fuels of non-biological origin: This category includes renewable hydrogen and other non-biological renewable fuels.
  • Recycled carbon aviation fuels: These are fuels produced from recycled carbon sources, such as carbon dioxide captured from industrial processes.
  • Low-carbon aviation fuels (LCAF): This category includes low-carbon hydrogen and other low-carbon fuels that do not fall under the biofuel or non-biological renewable fuel categories.

These fuels are required to comply with the RED sustainability and emissions saving criteria, ensuring their environmental benefits. The maximum share of SAF and synthetic aviation fuels in the total aviation fuel consumption is set at 70%, with the exception of biofuels from food and feed crops. Low-carbon aviation fuels can also be used to reach the minimum shares in the respective part of the regulation. This approach aims to promote the use of sustainable and low-carbon alternatives while ensuring a balance between different types of fuels.

Limit on Jet Fuel Uptake

Airlines must carry only the fuel necessary for safe flights, reducing emissions from excess weight. Aircraft operators must uplift at least 90% of their annual fuel needs at EU airports to discourage fuel hoarding or tankering practices. Tankering practices refer to the practice of aircraft operators uplifting more aviation fuel than necessary at a given airport, with the aim of avoiding refueling partially or fully at a destination airport where aviation fuel is more expensive. This practice can lead to additional emissions from the extra weight of the aircraft carrying excessive amounts of fuel.

Flexibility of Synthetic Aviation Fuels

The agreement allows for flexibility in the supply of synthetic aviation fuels, with provisions for complementing shortfalls in the average share of synthetic aviation fuel over specific periods. This flexibility ensures a smooth transition to increased use of synthetic fuels while maintaining the overall decarbonization goals.

Labelling Scheme

The labelling scheme is an important part of the ReFuelEU Aviation initiative, as it will help to promote the use of sustainable aviation fuels (SAF) and encourage consumers to choose greener flights. The European Aviation Safety Agency (EASA) will play a key role in implementing the labelling scheme and ensuring that aircraft operators are using SAF and reducing their carbon emissions.

The labelling scheme will enable aircraft operators to request the issuance of a label for flights departing from EU airports. The label will certify the level of environmental performance of the flight on the basis of the expected carbon footprint per passenger and the expected CO2 efficiency per kilometer.

Enforcement of ReFuel EU

The ReFuel EU Aviation initiative will be enforced through a combination of measures:

  • European Commission: will be responsible for monitoring its implementation.
  • Member State Authorities: Member state authorities will propose penalties for fuel suppliers and airlines but should adhere to the criteria defined by the European Commission.
  • Government Policy: is pivotal in driving the deployment of Sustainable Aviation Fuels (SAF), and the International Air Transport Association (IATA) advocates for policies that are unified, unbiased regarding technology and feedstock, and employ incentives to expedite SAF adoption.
  • Reporting Obligations: Reporting obligations for fuel suppliers and aircraft operators will be enforced by designated competent authorities, with revenues from fines for non-compliance being directed to research and innovation into bridging the price differential between sustainable and conventional fuels.

Consequences for non-compliance with ReFuel EU

The ReFuel EU legislation includes financial penalties for fuel suppliers and operators failing to comply with the obligations laid down in the regulation. The penalties are expected to be significant, with non-compliance penalties in 2030 estimated to be around €1,000 and €6,000 per tonne of fuel for the advanced bio and synthetic fuel mandates.

How can the aviation sector prepare for ReFuel EU?

According to the sources, here are some ways the aviation sector can prepare for ReFuelEU:

  • Monitor and report on emissions: Airlines and aircraft operators will be required to monitor and report on their emissions to ensure compliance with the new regulations. This may involve the implementation of new monitoring systems, the collection of data on fuel consumption and emissions, and the reporting of this information to the relevant authorities.
  • Update fuel management practices: Aircraft operators should review and update their fuel management practices to comply with the new regulations. This may involve implementing new procedures for fuel uplift, monitoring fuel consumption, and optimizing flight planning to minimize fuel usage.
  • Invest in SAF production: Airlines and fuel suppliers should invest in the development and production of SAF to meet the increasing demand. This can involve partnerships with biofuel producers, research and development of new production methods, and scaling up of existing SAF production facilities.
  • Collaborate with stakeholders: The aviation sector should collaborate with stakeholders such as governments, fuel suppliers, and airports to ensure a smooth transition to the new regulations. This can involve sharing best practices, coordinating investments, and addressing any challenges that arise.

By taking these steps, the aviation sector can prepare for the implementation of ReFuelEU and work towards reducing emissions from the aviation sector.

Conclusion:

The ReFuel EU which sits under the EU’s Fit for 55 package, sets out clear SAF blending mandates,  from 2% in 2025 to an ambitious 70% by 2050. Its potential environmental impact is vast, with estimates suggesting SAF could contribute up to 65% of the emissions reductions needed for aviation to achieve net-zero by 2050.

 

Frequently Asked Questions

Are there SAF mandates outside of the EU?

Yes, there are SAF mandates for aviation outside of the EU.

For example:

Norway: In 2020, the Norwegian government announced that all aviation fuel sold in Norway should contain at least 0.5% advanced biofuels by 2021, increasing to 30% by 2030

Sweden: In 2018, the Swedish government announced a target of 30% SAF use by 2030

France: In 2021, the French government announced a target of 50% SAF use by 2025, increasing to 100% by 2050

UK: In 2021, the UK government announced a target of 10% SAF use by 2030, increasing to 75% by 2050

US: In 2021, the US government announced a target of 3 billion gallons of SAF production by 2030, increasing to 35 billion gallons by 2050

In addition, California has implemented low carbon fuel standards that require a reduction in the carbon intensity of transportation fuels, including aviation fuels. The standards require a 10% reduction in carbon intensity by 2020, increasing to a 20% reduction by 2030

How is revenue from ReFuel EU Aviation used?

The ReFuel EU Aviation initiative is expected to generate revenue from financial penalties due to failure to comply with the legislation. The revenue generated from these fines will be used to support research and innovation projects in the field of sustainable aviation fuels.

Where can I find more information about ReFuel EU?

You can find more information about the ReFuel EU Initiative through several reputable sources, including:

European Parliament Website: The European Parliament provides a detailed briefing on ReFuelEU Aviation and its role in the “fit for 55” package. This resource offers updates on the legislative process and provides access to related documents – https://www.europarl.europa.eu/legislative-train/package-fit-for-55/file-refueleu-aviation 

European Parliament Think Tank: The European Parliament’s Think Tank offers a comprehensive briefing on ReFuelEU Aviation, covering the proposed regulation and the latest developments in the legislative process. It also includes links to related documents for further insights – ReFuelEU Aviation initiative: Sustainable aviation fuels and the fit for 55 package | Think Tank | European Parliament (europa.eu)

Safran: Safran, a key player in sustainable aviation fuels (SAF) development, has published an article highlighting a major European agreement for SAF under ReFuelEU. The article provides valuable insights into the significance of this agreement and Safran’s role in SAF development – Refuel EU: focus on a major European agreement for Sustainable Aviation Fuels | Safran (safran-group.com)

 

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