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Technical Analysis in Stages – End of 2025
The sky is getting greener, not by pigmentation, but by mandate. European aviation has passed the first test of its great transition: the entry into force, on January 1, 2025, of the Sustainable Aviation Fuel (SAF) blending mandate, imposed by Regulation (EU) 2023/2405 (known as ReFuelEU Aviation).
1. 2025: The First Assessment and Operational Validation
The initial obligation to blend a minimum of 2% of SAF into the jet kerosene supplied at EU airports has been successfully implemented. The key lies in the science: certified SAFs are "drop-in fuels". This chemical compatibility has validated the approach, ensuring that operational procedures (SOPs), maintenance, and safety operations (including ARFF firefighting and spillage protocols) have remained unchanged. Despite the regulatory revolution, operational stability has been maintained.
2. The Illusion of 2% and the Strategy of Scale
The initial percentage is often criticized for its marginal ecological impact on a single flight. And this criticism is founded if one only looks at the here and now. For example, an average regional flight sees a reduction of approximately 42 kg of CO² per single operation, thanks to that 2% of SAF.
However, the true meaning of this threshold is economic and strategic. The objective is not the single operation, but creating rigid legal demand on a continental scale. This mechanism forces the industry to invest, transforming a small, point-source reduction into significant cumulative emissions savings across millions of annual flights. The 2% obligation is the necessary trigger to ensure the feasibility of the future trajectory, which aims for 6% in 2030 and 20% in 2035.
3. The Cost Crisis and the Shadow of 2030
Economic sustainability is the most critical factor. The "SAF Premium" remains extremely high: SAF still costs anywhere from 2 to 10 times the price of fossil Jet A-1.
While the financial impact was contained in 2025 (thanks to the 2% blend), the approach of 2030 forces the sector to confront an exponential crisis. If global production does not rapidly increase to trigger economies of scale and drive down the cost of SAF, the risk is that the financial burden will become unsustainable, seriously threatening the competitiveness of European aviation. All questions converge on this point: will prices be reduced by a significant margin before 2030?
4. The Global Duel: EU Mandate vs. US Incentive
Europe, while setting the rule with its regulatory mandate, is competing with the philosophy of the United States, which uses direct tax incentives (such as the generous credits in the IRA) to stimulate supply.
This global dynamic is crucial. Europe uses regulation to force demand, while America uses the fiscal lever to make SAF competitive and increase supply. The rapid growth of SAF production in the US, driven by the IRA, is the only hope for a future global price drop that can make the ambitious European mandate economically sustainable.
The European regulatory pressure, combined with the global push from ICAO, sets the direction; however, the viability of the journey will depend on the sector's ability to solve this complex economic and productive equation.
❓ Question for Technical Analysis:
Considering the current "SAF Premium" and supply constraints, do you believe the intermediate targets of 6\% (2030) and 20\% (2035) are realistic, or will the EU be forced to rely almost exclusively on non-European production (driven by the IRA) to avoid a supply and cost crisis?
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