SAS Issues Urgent Warning on Europe’s Critical e-SAF Shortage Highlighting the Growing Challenge as the EU’s ReFuelEU Aviation Regulation Becomes Law and Demands Action

In a concerning revelation, SAS (Scandinavian Airlines) has raised an urgent alarm about Europe’s looming shortage of e-SAF (electro-sustainable aviation fuel) as the EU’s ReFuelEU Aviation regulation enters into force. This regulation, which is set to play a key role in Europe’s drive to decarbonize aviation, mandates the gradual increase of sustainable aviation fuels (SAF) in the aviation sector. However, SAS’s recent warning sheds light on a major issue: a significant gap between demand projections for e-SAF and the lack of capacity to produce this essential fuel.

e-SAF Demand Soars as EU Regulation Kicks In

The EU’s ReFuelEU Aviation regulation, aimed at drastically reducing the carbon footprint of air travel, introduces ambitious targets for SAF blending into jet fuel. As of 2030, airlines will be required to use a certain percentage of SAF, with this percentage increasing each year thereafter. This marks a significant shift in the aviation industry, pushing for sustainable fuels as a crucial part of the EU’s Green Deal.

SAS, in its report titled The Need for e-SAF in Scandinavia, warns that the demand for e-SAF is projected to rise sharply from 2030 onwards, as the regulation begins to take effect. The airline notes that in order to meet these future demands, Europe must scale up e-SAF production rapidly. However, despite the urgency of the situation, no European production facility has yet reached the Final Investment Decision (FID), a critical milestone in the construction of new production plants.

The e-SAF Production Bottleneck: A Critical Hurdle

The lack of FID on e-SAF production facilities presents a daunting challenge. Final Investment Decision is a key marker in the construction of new facilities, as it signals that a project is ready to move forward with major financial backing and construction efforts. Without these decisions in place, Europe faces the risk of a crippling shortage of e-SAF, which will not only hinder the aviation industry’s decarbonization goals but could also result in significant delays or non-compliance with the EU’s regulations.

The challenge stems from multiple factors, including the high capital costs involved in establishing e-SAF production plants, regulatory hurdles, and the complexity of scaling up production at the necessary pace. The technology required to produce e-SAF is still in its infancy in Europe, and while various projects are in the pipeline, they have yet to receive the necessary funding or government backing to move forward.

Why e-SAF Matters: The Push for Sustainable Aviation

e-SAF is considered one of the most promising solutions to decarbonize the aviation sector, which is responsible for a significant portion of global CO2 emissions. Unlike conventional jet fuel, e-SAF is made from renewable electricity, water, and CO2 captured from the air, significantly reducing the carbon footprint of air travel. The EU’s ReFuelEU regulation aims to accelerate the adoption of SAF to help achieve its carbon neutrality targets for 2050.

The demand for e-SAF is expected to surge not just in Europe, but globally, as governments and industries face increasing pressure to meet climate targets. However, the path to scaling e-SAF production is fraught with challenges. The EU’s ambitious regulatory framework has been lauded for its potential to drive change, but without adequate infrastructure and production capacity, these well-intentioned goals could remain out of reach.

The Consequences of Delay: Impacts on Airlines and Passengers

If Europe does not swiftly address the production bottleneck, airlines like SAS will struggle to meet the regulatory requirements. Airlines will be forced to either purchase e-SAF at inflated prices, potentially raising ticket costs for passengers, or rely on less sustainable options, undermining the entire goal of decarbonizing aviation.

This shortage could also impact airlines’ ability to compete in an increasingly eco-conscious market. As sustainability becomes a central issue for passengers, airlines that fail to meet SAF requirements could face reputational damage, loss of consumer trust, and ultimately, a decline in market share.

Furthermore, delays in meeting the e-SAF targets may put Europe’s aviation industry at odds with global sustainability initiatives. As other countries, including the US and several in the Middle East, ramp up their SAF production, Europe risks falling behind in the global race to decarbonize air travel.

The Need for Immediate Action: A Call to Investors and Policymakers

The urgent need for investment in e-SAF production has never been clearer. For Europe to avoid a crisis in its aviation industry and meet its decarbonization goals, it must accelerate the construction of e-SAF production facilities. Governments must offer incentives for investors to commit to large-scale production, and policymakers must create a clear and supportive regulatory framework to encourage rapid development in the sector.

As Europe continues to push forward with its ambitious climate goals, the aviation industry must act swiftly to secure a sustainable future. Without an adequate supply of e-SAF, Europe risks undermining its own efforts to reduce emissions and may find itself facing both environmental and economic challenges in the coming years.

The warning from SAS about the shortage of e-SAF serves as a wake-up call to European policymakers and industry stakeholders. While the EU’s ReFuelEU Aviation regulation offers a path toward decarbonization, it also highlights a critical vulnerability in Europe’s ability to meet future fuel demands. To avoid a shortage that could have far-reaching consequences, immediate action must be taken to scale up e-SAF production and ensure that Europe remains a leader in sustainable aviation. Without this, the goal of achieving carbon-neutral air travel by 2050 could remain an unfulfilled promise.

“What we are seeing now is a reminder of how exposed Europe remains to global fuel shocks. If we fail to build domestic e‑SAF production, we risk creating a second vulnerability, this time inside a regulated system where demand is mandated but supply is not. This is a structural issue that will affect ticket prices, route networks and Europe’s competitiveness unless we act now,” says Mads Brandstrup Nielsen, Senior Vice President Communication, Public Affairs & Sustainability at SAS.

A critical juncture for action

A recent report highlights the urgent need for sustainable aviation fuel (e‑SAF) in the Scandinavian aviation sector, forecasting a demand of 36,000 tons by 2030, escalating to over 160,000 tons by 2035 and 330,000 tons by 2040. To meet this demand, Europe will need to establish dedicated e‑SAF production plants, with one required by 2032, expanding to 2–3 plants by 2035 and approximately five by 2040. At present, there are no such facilities in Europe.

In a market constrained by limited supply, the price of e‑SAF is expected to increase significantly, aligning with the cost of non-compliance with EU regulations, which could be several times more expensive than current fossil-based jet fuel. This price surge is likely to drive up operational expenses for airlines and strain Europe’s connectivity.

The report suggests two potential courses of action: Europe may either reduce its ambitions under the RefuelEU initiative, slowing down aviation’s shift to net-zero emissions, or it could accelerate production through targeted policy measures, investment incentives, and the development of necessary infrastructure.

“Europe now has a very short window to decide whether it wants to lead or follow in the next phase of clean aviation. Building e‑SAF production is not only about meeting a mandate, it is about securing long‑term energy stability, protecting connectivity and keeping European industry competitive in a world that is moving fast. Without accelerated investment, we risk higher costs for passengers, weaker networks for businesses and a new strategic dependency that will be far harder to unwind later,” Brandstrup says.