John Whelan: EU's €2bn plan to fix shortage of sustainable aviation fuel
International Air Transport Association (IATA) director general Willie Walsh welcomed the European Commission's intervention amid 'market challenges that derive from SAF mandates'. Picture: Kevin Coombs/Reuters
To date, the international aviation and shipping industries have failed to reduce their CO2 emissions, despite many laudable efforts that deserve praise.
The fact of the matter is that in the European Union, where overall emissions have dropped by 30% since 1990 across all sectors, emissions from aviation increased by 29% and shipping increased by 26%.
Hence, with the need to show leadership at COP 30, the European Commission last week adopted its Sustainable Transport Investment Plan (STIP), setting out a pivotal roadmap to rapidly accelerate the CO2 reduction in the aviation and maritime shipping sectors.
The plan responds to the consistent demands from airline and ship owners to boost investments into the production of renewable and low-carbon fuels for these sectors.
Willie Walsh, IATA’s director general, has been lobbying the commissions for some years now for better support for the airline sector and was quick to welcome the EU plan, stating:
CLIMATE & SUSTAINABILITY HUB
Two key issues have frustrated the airlines: A lack of ready availability of sustainable aviation fuel and the high price of that fuel, which is roughly three to four times the price of conventional jet fuel.
In 2024, sustainable aviation fuel production reached approximately 1 million tonnes, but less than initial projections due to delays in the United States, which, under the Trump administration, is set to continue.
For 2025, production is forecast to reach 2.1m tonnes, but this is less than 1% of the global demand. Airlines will need 500m tonnes of sustainable aviation fuel to achieve net-zero carbon emissions by 2050, according to the International Air Transport Association (IATA).
Sustainable aviation fuel is a type of low-carbon jet fuel made from renewable or waste-based sources like used cooking oil and agricultural waste.
It is a “drop-in” fuel, meaning it can be blended with traditional jet fuel and used in existing aircraft without major modifications.
Sustainable aviation fuel can reduce lifecycle carbon emissions by up to 80% compared to conventional jet fuel, and it is considered crucial for the aviation industry’s goal of achieving net-zero carbon emissions by 2050.
The commission has proposed an investment of around €2bn for the production of sustainable fuels until 2027, to support shipping and airline demands.
Ireland currently does not have a sustainable aviation fuel production facility, but transport minister Darragh O’Brien has plans to rectify this and has published the sustainable aviation fuel policy roadmap.
The roadmap outlines four policy pathways: supporting production, providing market certainty, fostering collaboration, and driving sustainable aviation fuel uptake.
The minister sees opportunities to develop domestic sustainable aviation fuel production.
Initially, by co-processing at existing refineries using waste oils such as used cooking oil and tallow, which currently goes to fuel for road transport vehicles and investing in biofuels facilities that use agricultural and forestry residues.
The Government has already earmarked €750m in the budget for grid infrastructure to support renewable expansion, which could underpin large-scale sustainable aviation fuel production.
But the minister needs to proactively push through suitable grants to attract industry players to invest in the necessary facilities.
Better incentives for companies to produce sustainable fuels should be prioritised over carbon intensity target-setting for users.
Irish carriers have begun aligning with the roadmap. Aer Lingus has pledged to use 10% sustainable aviation fuel by 2030, while Ryanair has set a 12.5% target.
Fuel accounts for nearly a third of airlines’ operating costs, making price support crucial to uptake.
The Department of Transport said the roadmap will evolve with “future iterations,” identifying barriers to sustainable aviation fuel imports and domestic production while aligning with EU frameworks.
At Cop30 the EU needs to persist in its regional efforts to decarbonise both the aviation and maritime shipping sectors, to maintain credibility and the continued focus by EU industry.
More than 40% of the global shipping fleet transits through the EU every year, which gives the EU a strong say in emissions from this sector.
The European Union’s emissions trading system now includes maritime transport and requires shipping companies to monitor, report, and pay for their greenhouse gas emissions.
But as it applies only to ships of 5,000 gross tonnage or greater, this should not be an important issue for Ireland, where ports can only take ships below this level.
