PtX Lab Lausitz Recommends an Efficient Funding Instrument for eSAF
Copyright: Shutterstock/ImYanis
Position paper sets out five recommendations for the development of a double-sided auction mechanism for electricity-based sustainable aviation fuels.
The European Union (EU) is increasingly turning to sustainable aviation fuels to make air travel more climate-friendly. As part of the EU Sustainable Transport Investment Plan (STIP), the European Commission has announced plans to launch an initial pilot project from 2026 for a pooled two-sided auction for electricity-based sustainable aviation fuels (eSAF). However, the specific details of this instrument remain largely open.
In response, the PtX Lab Lausitz has published the PtX Lab Position Paper ‘Development of a two-sided auction mechanism for eSAF within the EU Sustainable Transport Investment Plan’, which provides clear recommendations for a bankable, scalable funding instrument.
Policy framework: ReFuelEU Aviation as a starting point
The regulatory context is clear: through the ReFuelEU Aviation Regulation, the EU is mandating increasing shares of sustainable aviation fuels and introducing a specific sub-quota for synthetic fuels from 2030. The PtX Lab Lausitz advocates that the new funding instrument should initially focus clearly on RFNBO-compliant eSAF – that is, electricity-based renewable fuels of non-biological origin (RFNBO).
This is where the gap between regulatory requirements, cost structure and financial feasibility is currently greatest. Low-carbon approaches should, if politically desired, only be addressed in separate funding streams and from dedicated budgets – not from the same funding pot.
From the PtX Lab Lausitz’s perspective, it is crucial that the instrument is not conceived as a symbolic pilot project, but as genuine market infrastructure: standardised, underpinned by multi-year commitments and geared towards scalability. Only in this way can it actually contribute to the final investment decision (FID) for commercial eSAF projects
Copyright: PtX Lab Lausitz
Five key recommendations for the design
The position paper sets out five specific recommendations: a central clearing house with standardised contracts and multi-year budget commitments should form the core architecture. Price remains the key award criterion, but in early rounds this is supplemented by requirements relating to project progress.
An explicit solution is needed for the pre-production phase, for example milestone-based funding components, as the auction mechanism alone does not close the upstream funding gap and would otherwise exclude smaller market participants. Feedstocks and value-chain inputs from third countries should not be excluded across the board, but should be regulated through comprehensive transparency and traceability requirements.
Unresolved political issues – such as long-term financing beyond the EU’s Multiannual Financial Framework or the integration of existing structures such as H2Global – are explicitly addressed in the PtX Lab position paper.
Contact
Felix Schmermer
Head of Section PtX Policy & Market Ramp-Up
+49 162 72 44 695
Write E-Mail
more information
