On 16 April, following a two-month scrutiny period, the European Union adopted the delegated act on ETS (Emissions Trading System) revenues to be used to bridge the price gap between fossil kerosene and eSAFs (Synthetic Sustainable Aviation Fuels).
The ETS support scheme for synthetic aviation fuels is a funding initiative aimed at lowering the financial barriers to producing sustainable aviation fuels by using renewable energy and captured carbon. It draws on revenues from the EU’s Emissions Trading System, specifically from the auctioning of carbon permits from the aviation sector, to help cover the higher production costs compared to traditional jet fuel. The aviation sector is due to pay the full ETS price of emissions from fossil kerosene by the end of 2026. The goal is to use that collected money to speed up the use of more sustainable fuels in air transport and cut carbon emissions in line with the EU’s environmental targets.
The technical rules lay out the different methodologies that will be used to calculate the average price of fossil kerosene and their SAFs equivalent, and list the eligible fuels that can be supported by the mechanism, including renewable fuels and some types of synthetic low-carbon fuels. These rules are applicable immediately.
KEY ELEMENTS
🔵 Up to 95% of the cost gap between RFNBOs (Renewable Fuels of Non-biological Origin) and conventional kerosene may be covered through the funding mechanism.
🔵 Support will also cover up to 50% of the price difference for synthetic low-carbon aviation fuels compared to fossil-based alternatives.
🔵 Recycled Carbon Fuels are excluded from the scope.
CO₂ Value Europe has played an active role in the development of this new EU support scheme, closely monitoring its progress and advocating for supporting the projects of our members before the European Commission.
As part of our broader policy engagement, in January of this year, we contributed to the policymaking process by submitting our official position in response to the EU consultation on ETS support for eSAFs projects.
We see this mechanism as a significant and promising precedent for Carbon Capture and Utilisation (CCU). This approach not only reinforces the circular carbon economy but also offers a model that could be extended to other industries, such as shipping, heavy manufacturing, and chemicals, to support their transition away from fossil fuels.
More on the Final Rules on ETS Support Mechanism for E-Kerosene here.
