COMMENTARY: Bridging the Hydrogen and eSAF policy gap in the UK and EU

This year marks a pivotal moment for aviation as the EU and UK sustainable aviation fuel mandates take effect, requiring jet fuel producers to reduce carbon emissions by blending SAF into their fuel. With this, the need to secure hydrogen feedstocks has become necessary for the sector. Although hydrogen is often discussed as a direct aviation fuel, significant progress is also being made in hydrogen-derived eSAF, which features as a key target in both SAF mandates. Despite this legally-binding target, both the EU and UK governments have not outlined how they will support the aviation sector in securing and integrating hydrogen, despite having hydrogen policies published. Misalignment in policies and a lack of clear roadmaps risk putting further strain on the sector, making it increasingly difficult to meet decarbonisation goals, writes Tim Moxham.

Produced by combining hydrogen – generated via electrolysis – with captured CO2, eSAF creates a synthetic fuel with net-zero emissions. Power-to-liquid (PtL) is one of the most promising forms of eSAF, referring specifically to fuels produced using renewable electricity to generate hydrogen and capture CO2.

The UK SAF mandate sets a gradual timeline for adopting PtL fuels, starting at 0.2% in 2028 and increasing to 3.5% by 2040. At the same time, the EU SAF blending mandate includes a specific sub-target for eSAF beginning in 2030, requiring 1.2%, equivalent to 0.7-0.9 Mt. There are two primary pathways to produce eSAF: Fischer-Tropsch synthesis and methanol-to-jet conversion. Both rely on renewable hydrogen as a key input, but definitions of eSAF vary, encompassing Renewable Energy Sources (RES) compliant Renewable Fuels of Non-Biological Origin (RFNBO) and low-carbon or non-fossil sources such as nuclear hydrogen. Hydrogen Europe, the body representing the hydrogen sector, has useful information on the different hydrogen sources (and their colours).

As of November 2024, approximately 30 eSAF plants have been announced across Europe, most of which are in the EU. However, progress is falling short of meeting the 2030 delivery targets. In December, IATA Director General Willie Walsh, expressed disappointment over slow progress in the past year to decarbonise the airline sector, arguing that governments lacked resolve in their role to move ahead with decarbonisation and criticised low investment from the big oil producers. One reason for the slower-than-expected uptake in decarbonisation may be to do with the misalignment of policies in the EU and UK.

Building on what Walsh said, governments need to play more of an active role and make sure their policies align to support industries.  

Failure to meet the PtL requirement under the UK mandate – due to lack of procurement or availability – will result in penalties through a buy-out price. The aim of the mandate is to stimulate research and development of eSAF, enabling the aviation industry to reduce carbon emissions while maintaining compatibility with existing infrastructure. However, the hydrogen strategy market update, published by the UK government in December, showed signs of lacking specific priorities for aviation, despite the SAF mandate’s obligation, highlighting an instance of where the UK policy is misaligned or a step behind.

To qualify as an eSAF, synthetic fuels must use a source of renewable electricity to produce hydrogen.  This is because non-renewable hydrogen, such as blue hydrogen or natural gas derived hydrogen, would undermine the carbon-neutral quality of the fuel. Although the UK government has advanced its carbon capture and hydrogen strategies – key components for producing eSAF – these efforts remain restrictive, with limited capacity for feedstock and significant competition expected from other sectors seeking hydrogen for decarbonisation.

The anticipated UK SAF Bill is expected to provide de-risking encouragement for investors through a revenue certainty mechanism to support the SAF industry in meeting the mandate. However, concerns still need to be addressed about hydrogen’s role in aviation’s decarbonisation policy. Specifically, hydrogen that is already subsidised through other government schemes, such as the Hydrogen Production Business Model support scheme, cannot receive additional support through the UK’s SAF Revenue Certainty Mechanism. This exclusion creates a particular challenge to produce eSAF, which relies on low-carbon hydrogen, as it limits the financial incentives available to scale up production.  Furthermore, it is unclear whether SAF produced using such pre-supported hydrogen can count towards meeting the SAF mandate.

With no direct support for aviation in the UK’s hydrogen strategy, and concerns about the qualification of certificates, the UK’s emissions policy for aviation is left wanting, making it difficult for the sector to navigate and finance without greater clarity. Despite funding commitments, securing sufficient renewable hydrogen for aviation remains a significant challenge.

Similarly, the EU has recognised hydrogen’s role in transport but lacks a defined roadmap for aviation. The EU’s Fit for 55 policy supports hydrogen uptake in aviation, stating that “Renewable electricity can also be used to produce synthetic fuels for hard-to-decarbonise transport sectors such as aviation and maritime transport.”

However, perhaps because it will have been almost a full year of EU elections – the European Parliament was dissolved in May 2024, and it will be in February 2025 that the Commission will publish its Work Programme for the next term – there has also been a lack of direction from the top level. Arguably there are more opportunities in the EU for supporting the uptake of hydrogen in aviation, with a supporting framework that includes the Hydrogen Bank and ETS SAF allowances, but as Walsh at IATA stated, there has been low uptake, and EU policy is partially responsible.

With demands on the aviation industry to include synthetic fuels in the SAF mandate, the European Commission needs to address why, despite having the potential 30 eSAF plants, decarbonising the sector is taking more time than expected.

Things could start to change in the EU soon, however. European Commissioner Dan Jørgensen recently presented an Electrification Action Plan to the European Parliament. Alongside the Commission’s Industrial Strategy, this could pave the way for clearer policies on eSAF and hydrogen in aviation. Still, these proposals represent only the first step in a long journey.

The fundamental issue for the UK and EU aviation sectors is that it is essential they be given a prioritised position in hydrogen strategies as there are regulatory obligations to fulfil. This is perhaps much simpler for the UK given that aviation is the only transport sector that has been given targets for hydrogen-derived SAF, while in the EU there is more competition (the maritime binding targets also include hydrogen uptake). Needless to say, both blocs need to be more inclusive and have a clearer roadmap for aviation in their hydrogen plans.

In the UK, legal obligations requiring at least 0.2% power-to-liquid fuels by 2028 create a pressing need for the industry to work with the government on a clearer roadmap. Ensuring aviation is prioritised within the hydrogen strategy and that sufficient renewable hydrogen is available will be critical for meeting SAF mandates. Even with the increased potential for investor funding from the upcoming SAF Bill, securing the hydrogen needed remains a significant challenge.

For the EU, the Electrification Action Plan and Industrial Strategy could provide the foundation for renewable hydrogen uptake in aviation. However, more regulatory support is needed to drive investment, and with more competition for hydrogen, the aviation sector risks losing out on funding for hydrogen resources.

Finally, greater cooperation between the UK and EU is essential. Many airlines and fuel producers operate across both regions, and a unified approach could harmonise SAF adoption and secure the necessary support in both markets. Collaboration will be critical to ensuring the aviation sector achieves its decarbonisation goals and accelerates the development of promising technologies like eSAF.

Image: Freepik/Tim Moxham

About the author

Tim Moxham

Tim is an Account Manager at Whitehouse Communications, specialising in political engagement across the UK and EU. He has a background in energy and environmental policy and previously worked in the UK parliament. He can be contacted at tim.moxham@whitehousecomms.com

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