Germany, Luxembourg and Austria have come together to launch a double-sided auction mechanism that will support the production of electro-sustainable aviation fuel (e-SAF).
As part of the mechanism, Germany will provide €2 billion and Austria and Luxembourg will both offer €60 million – bridging the gap between supply and demand prices from e-SAF producers and buyers.
In a public market consultation held by Germany’s Federal Ministry of Transport, it was found that “stakeholders broadly agree that state aid is necessary to enable the market ramp-up of e-SAF in the EU, since the substantial cost gap to fossil kerosene cannot currently be closed by market demand alone”. However, “respondents raised concerns about the complexity and administrative burden of the intermediary model, emphasising the need for clear bidding rules and full price transparency.” The general consensus of the consultation was positive, though.
Steffen Bilger, Germany’s Federal Minister of Transport, stated: “When it comes to e-SAF, Europe needs not only ambitious targets but also investment in industrial production. Germany, Austria and Luxembourg are jointly demonstrating how European cooperation works in practice. We are pooling our funding to create better conditions for investment decisions in a technology of the future.”
