- A €2.1 billion eSAF scheme has been announced by Germany, Austria and Luxembourg, as the nations target ‘accelerating the market ramp-up’ of the fuel in Europe.
- Germany will be providing the majority of the funding, with €2 billion available to the auction mechanism that will bring together producers and buyers.
- Austria and Luxembourg will each contribute €60 million to the initiative, and subsidised quantities of the fuel will be available in proportion to the contributions made.
The tri-nation agreement announced this morning by Germany, Austria and Luxembourg will see €2.1 billion electricity-based Sustainable Aviation Fuel (eSAF) initiative available to bring together producers and buyers with a ‘double-sided’ auction mechanism.
The aim is to bridge the price gap between both parties by providing public funding as Germany will make €2 billion available to the project, while Austria and Luxembourg will each contribute €60 million.
“When it comes to eSAF, 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. For me, eSAF is not just a matter of climate policy but also an opportunity for industrial policy. If we invest now, we can generate added value, expertise and jobs in Europe. At the same time, we are strengthening our independence in terms of energy and supply chains. We want to enable innovation and thereby make aviation more climate-friendly, step by step,” said Steffen Bilger, Federal Minister of Transport in Germany.
Industrial production of eSAF has been identified as requiring substantial investment, as well as being affected by the structural issue of timing and cost gaps. Producers currently require long-term off-take agreements to secure investments while buyers of eSAF enter into aviation fuel contract that cover much shorter time frames.
The ‘double-sided auction’ is set to bridge this gap by determining bids from eSAF producers and buyers’ demand in a competitive process, with an intermediary then balancing the supply and demand prices through government subsidies.
“By jointly funding eSAF, Germany, Austria and Luxembourg are sending a strong signal in favour of establishing a European market for renewable fuel. We are creating long-term prospects for producers, promoting transparent price signals and helping to ensure that eSAF will also be available in Austria. At the same time, we are strengthening our resilience and reducing our dependence on imports from regions outside Europe. The key point is: By bringing eSAF to market, we are creating the conditions that will enable the aviation sector to meet its European targets whilst, at the same time, achieving measurable CO₂ savings. This is an important step towards a sustainable aviation sector in Europe,” said Peter Hanke, Minister for Mobility in Austria.
The overall aim of the initiative is to facilitate investment decisions for new eSAF production plants as a competitive market for fuel purchasing is developed. The parties have confirmed that the funding programme is subject to approval under state aid law by the European Commission.
“Luxembourg stands determinedly alongside Austria and Germany in promoting climate-friendly aviation. By joining the eSAF Early Movers Coalition, we are supporting the expansion of eSAF production, reducing dependence on fossil fuels and accelerating their EU-wide market introduction. Luxembourg is playing an active role in building a safe, sustainable and competitive aviation sector by promoting new production capacities and helping to ensure that part of this production is made available to our domestic market. To build the sustainable mobility of tomorrow, we are laying the foundations today with a clear vision for the future, meeting both market demands and our population’s expectations for effective climate action,” said Yuriko Backes, Minister for Mobility and Public Works in Luxembourg.
eSAF is currently produced from renewable hydrogen and sustainable carbon, with the hydrogen derived from electrolysis using renewable electricity.
Germany, Austria and Luxembourg are among the founding members of the eSAF Early Movers’ Coalition, which was launched in December 2025.
The Coalition was founded with the aim of accelerating the market ramp-up of eSAF in Europe through cooperation, exchange of experience and joint financial support.