To meet rigorous targets, European aviation is striving to produce sustainable fuel.

Repsol, a big player in the energy industry, has decided to jump on board with Europe's push for eco-friendly airplane fuel. However, they have some reservations about the €200 million facility they are constructing in southeastern Spain. They believe that if the facility was located across the Atlantic, it might have an easier time gaining traction.

Repsol has shared that their facility, which converts old cooking oil into sustainable aviation fuel (SAF), has received a lot of attention from buyers. However, they are worried that Europe's investment policies may make it difficult for the industry to grow.

Oliver Fernandez, who is the director for air fuel at Repsol in Madrid, expressed the view that the regulatory system in Europe is highly intricate and restrictive when it comes to exploring innovative solutions. This kind of legal instability can be discouraging for those who are trying to find new ways forward.

It is evident that the United States has a strong inclination towards supporting businesses financially, and prioritizing their growth through innovation.

The concerns expressed by Repsol are similar to those of the aviation industry in Europe. This sector has been given the responsibility of increasing the use of Sustainable Aviation Fuel (SAF) to 10% of all aviation fuel by 2030, even though the current cost is up to five times higher than traditional fuels.

Investors and regulators are urging airlines to increase their use of SAF as it is one of the few solutions to reduce carbon emissions in aviation. This can also have an effect on whether airlines can be labelled as eco-friendly based on the green finance regulations of the European Union, which can influence the amount of money they can raise.

Currently, sustainable aviation fuel (SAF) is used in less than 1% of the total jet fuel used. Airlines, which operate on very slim profit margins and have accumulated significant debt due to the pandemic, believe that more efforts should be made to increase the production of SAF and reduce its cost.

Laurent Donceel, the current managing director of lobbying group Airlines for Europe, has stated that the United States is utilizing tax-related perks to promote production whereas Europe is more focused on enforcing changes instead of motivating them.

After the EU released its Net Zero Industry Act in mid-March, it appears that they are more concerned with putting on a show than actually standing up to the United States.

It is necessary for Europe to lead the way and provide support for the development of sustainable aviation fuel within its own borders to prevent lagging behind.

Advocates for how Europe handles things think that the energy industry, which makes a lot of money, should be capable of maintaining supply. They believe that the tax system in the United States is better suited to take advantage of rewards (like the Inflation Reduction Act) than Europe's mishmash of individual systems.

According to EU Transport Commissioner Adina-Ioana Valean, the EU regulations demand the establishment of seven novel factories to produce almost 2.2 million tons of SAFs in Europe, yearly, before 2030.

This indicates that we generated the desire, we acknowledged eco-friendly options utilizing solely the Net Zero Industry Act, which wasn't immediately apparent.

The people who make SAF (Sustainable Aviation Fuel) are having a hard time paying for the expenses needed to increase their production. Repsol, the company that makes SAF, has only made enough to use in trial flights for airlines like Iberia, Vueling (both owned by IAG), and Air Europa.

According to Ralf Diemer, who is the managing director of the eFuel Alliance, governments have to commit themselves to fixed prices for a period of 10 to 15 years. If they don't, then the manufacturers won't have the assurance they require to make investments. This is a significant issue.

Neste, a company based in Finland and known for being the largest producer of SAF (Sustainable Aviation Fuel) worldwide, has shared that they are currently broadening their facilities throughout multiple locations in Europe, and beyond. However, they did highlight some issues that are posing as challenges for them, including the sourcing of raw materials.

Despite the infusion of funds, constructing new factories often takes several years, which doesn't leave much room to produce the necessary quantities to achieve the European objectives.

Jonathan Wood, Neste’s VP of renewable aviation, shared that by 2026, we'll have more than 6.5 million tonnes of renewable capacity. One-third of it will be SAF capacity, amounting to 2.2 million tonnes. This equates to about 1% of overall aviation fuel demand worldwide.

The company that owns British Airways, IAG, has announced that it will invest $865 million in buying SAF and assisting with production. However, it has only given a guarantee of around 25% of the amount it plans to use by 2030. This means that the company will probably have to spend an additional, substantial amount of money to achieve its targets.

According to IAG's statement to Reuters, the provision of federal and state incentives in America for SAF production signifies an essential role in leading the world's transition towards net-zero emissions.

This is an excellent concept, yet if Europe fails to sustain with it, they will have to acquire SAF from other places. Instead of relying on imported SAF, let's produce it in all the necessary areas.

Smaller manufacturers such as Velocys and Fulcrum are aspiring to construct factories and increase Sustainable Aviation Fuel in the forthcoming years.

According to experts, the production of SAF will increase significantly, even if the new projects undertaken by aviation industry do not contribute enough to achieve the 10% benchmark.

According to Joe Horrocks-Taylor, a climate analyst at Columbia Threadneedle Investments, many businesses have already obtained enough SAF stock to fulfill at least 50% of their 2030 acquisition objectives. This demonstrates that there is enough market demand to encourage further expansion of SAF.

Returning to Repsol's Cartagena facility, the initial round of aircraft fuel produced from previously used cooking oil is set to depart from the refinery by the final quarter of this year. Furthermore, the company holds a positive outlook that a significant amount of additional fuel will be created and distributed in the near future.

They are currently allocating €103 million to build a new facility dedicated to producing synthetic jet fuel from CO2. This plant is set to commence operations in 2025.

Emilio Mayoral, the head engineer in charge of a team of approximately 750 construction workers building distillery towers and massive reactors, stated that it would be unfeasible to differentiate the fuel produced from the oil-based jet fuel chemically.

There will be a great need for it.