46 Companies Call for National Governments to Fund an e-SAF Pilot Tender Via Double-sided Auctions

As aviation industry leaders prepare to gather for the Paris Air Show, companies from across the aviation and energy value chains are calling on European national governments to commit funding for an e-SAF pilot auction via a double-sided auction mechanism to kickstart the e-SAF industry in Europe.

Project SkyPower has coordinated a joint open letter from more than 40 leading companies across the sustainable aviation fuel (SAF) value chain, calling on EU national governments to jointly commit funding to a pilot e-SAF tender. This tender would use a double-sided auction mechanism to help scale e-SAF (sustainable aviation fuel produced from clean electricity) across Europe.

The EU has already recognised e-SAF as a key pathway to decarbonising aviation, with the ReFuelEU Aviation regulation mandating increasing levels of e-SAF blending starting in 2030. Despite this political momentum, none of the planned e-SAF projects in Europe have reached Final Investment Decision (FID) — even though Europe hosts around 60% of the world’s planned e-SAF capacity.

To move forward, the market needs to overcome two fundamental failures:

• Producers require long-term offtake contracts to secure financing and de-risk investment.
• Buyers, such as fuel suppliers and airlines, need short-term flexibility to avoid locking into high initial prices as the market matures.

A market intermediary using a double-sided auction could resolve both challenges. This intermediary would operate as a government-backed commodity trader — contracting long-term with producers to provide revenue certainty, while selling short-term to buyers to maintain flexibility.

Compared to traditional flat subsidies, this model ensures greater efficiency of public funding by minimising the cost gap through competitive pricing on both sides of the market.

But time is short. With a typical lead time of four years from FID to fuel production, projects need to secure investment by the end of 2025/26 in order to deliver fuel in line with the 2030 ReFuelEU mandate.

That’s why over 40 companies are urging EU governments to act now and co-fund a pilot e-SAF tender using this double-sided auction mechanism — and in doing so:

• Kick-start a self-sustaining e-SAF market, using available funds now to avoid market delays
• Secure e-SAF volumes for domestic routes, protecting industry from penalties linked to unmet mandates
• Demonstrate Europe’s cleantech leadership, creating a compelling proof point for global markets