Germany, Austria and Luxembourg are joining forces to accelerate the commercial roll-out of electricity-based sustainable aviation fuel (eSAF), unveiling a new funding mechanism designed to bridge the gap between producers and buyers.

 

The three countries are launching a double auction mechanism that will bring eSAF producers and potential buyers into the same market. Where a gap emerges between the price producers require and what buyers are prepared to pay, government funding will cover the difference.

 

Germany is making up to €2 billion available to support the scheme, while Austria and Luxembourg will each contribute up to €60 million.

 

Federal Transport Minister Steffen Bilger said the initiative could help turn eSAF from a climate-policy ambition into an industrial opportunity for Europe.

 

“With the eSAF scheme, Europe needs not only ambitious targets, but investment in industrial production. Germany, Austria and Luxembourg are therefore jointly demonstrating how European cooperation can work in practice. We are pooling our funding resources, thus creating better conditions for investment decisions in a future technology. 

 

"For me, eSAF is not just a matter of climate policy – it’s also an opportunity for industrial policy. If we invest now, added value, know-how and jobs can be generated in Europe. At the same time, we strengthen our independence in energy and delivery chains. We want to facilitate innovation and step by step, make aviation more climate-friendly.”

 

Austria’s Mobility Minister Peter Hanke said the initiative would provide producers with longer-term prospects while helping establish a European market for renewable jet fuel.

 

“With joint sSAF funding, Germany, Austria and Luxembourg are sending a robust signal for developing a European market for renewable jet fuel. We are creating long-term prospects for producers, supporting transparent price signals and contributing to eSAF also becoming available in Austria. 

 

"At the same time, we are bolstering our resilience and reducing dependence on imports from regions outside Europe. What is decisive here is that with the market roll-out of eSAF, we are generating the conditions for aviation to fulfill its European targets and to cut a substantial amount of CO₂ at the same time. This is an important step for a sustainable aviation industry in Europe.”

 

Luxembourg’s Minister for the Economy, SMEs, Energy and Tourism, Lex Delles, said the three countries were seeking to combine climate action with European industrial development.

 

“Together with Germany and Austria, we are hereby taking the lead as pioneers on a path where not only will we protect the climate, but also support industrial added value in Europe as well as our independence from fossil energy imports.”

 

Luxembourg Mobility and Public Works Minister Yuriko Backes said the country’s participation would help expand eSAF production while reducing reliance on fossil fuels.

 

“Luxembourg is standing shoulder to shoulder with Austria and Germany to advance climate-protecting aviation. By joining the ‘eSAF Early Movers’ Coalition’, we are promoting the expansion of eSAF production, reducing dependence on fossil fuels and accelerating their market roll-out across the EU. 

 

"Luxembourg is taking an active role in the development of a secure, sustainable and competitive aviation sector by fostering new production capacities and helping to ensure that a portion of this production is made available to our own domestic market. With this clear vision for the future, we are creating the conditions today for the sustainable mobility of tomorrow – meeting market requirements as well as reflecting the expectations of our citizens for effective climate protection.”

 

The funding programme marks the next step by the three founding members of the eSAF Early Movers’ Coalition to support the development and production of sustainable aviation fuels.

 

The eSAF volumes backed by the programme will be placed on the markets of Germany, Austria and Luxembourg in proportion to each country’s share of the funding.

 

The push comes as eSAF production faces a major financing challenge. New facilities require substantial upfront investment, while producers typically need long-term offtake agreements to secure those investments.