Germany, Austria and Luxembourg have announced a joint funding scheme to accelerate the production and uptake of electricity-based sustainable aviation fuel (eSAF), combining up to €2.12 billion in public support.
Germany will provide up to €2 billion, while Austria and Luxembourg will each contribute up to €60 million. The programme is designed to address the price gap between what eSAF producers need to charge and what airlines and other buyers are prepared to pay.
A double-sided auction will bring producers and buyers into the same process. Producers will bid to supply eSAF, while buyers signal what they are willing to pay. Public funding will bridge any remaining price gap.
The scheme addresses a mismatch in the aviation fuel market: new plants need substantial upfront investment and long-term purchase commitments, while buyers often negotiate shorter contracts. Subsidies are intended to reduce that investment risk.
eSAF is made using renewable electricity, green hydrogen and sustainable carbon. When produced with eligible inputs, it can reduce life-cycle emissions compared with conventional jet fuel and help decarbonise aviation.
The three countries are founding members of the eSAF Early Movers Coalition. Subsidised fuel volumes are expected to enter their markets in proportion to each country’s contribution.
The scheme aims to make new production facilities viable and establish a competitive market for eSAF purchases. It remains subject to European Commission approval under EU state-aid rules, and its impact will depend on regulatory clearance, auction design and investment.
