Cepsa, Iberia, Iberia Express, Vueling, and BIOCIRC (Spanish Biocircularity Association) today presented a report with 16 economic, regulatory and public-private collaboration measures to boost the production and consumption of sustainable aviation fuels (SAF) – an alternative that reduces the environmental impact of the airline sector by reducing CO2 emissions – to position Spain as the European leader in this new technology and sustainable tourism.
The conditions available in Spain for the production of SAF represent a great opportunity for the national economy. For this reason, the four entities propose making the development of SAF a national project, positioning Spain as a European hub and placing it at the forefront of sustainable tourism and the energy transition.
The report ‘How to make Spain the European leader in SAF? Roadmap to accelerate the decarbonisation of air transport’ points out that the new industry to produce this sustainable fuel will require an investment of €22 billion to construct facilities and generate 270,000 direct, indirect, and induced jobs until 2050. The development of this industry, therefore, could have an impact of €13 billion on Spanish GDP just for the construction of the plants, to which would also be added €42,851 million for the operation of these plants until 2050 (in addition to the investment and jobs linked to this phase).
The report highlights the need to establish a regulatory framework that provides security to the agents involved, allowing them to invest with confidence in this emerging industry. It also highlights the importance of jointly assuming the necessary investments and the increase in costs so that SAF is a sustainable and viable solution in the short term, since its price is between 3 and 5 times higher than fossil-based kerosene. Likewise, the development of innovative technologies for its production, as well as the deployment of industrial facilities with the adequate capacity to meet the demand for SAF, is essential to take advantage of the potential of the raw materials available in Spain.
The study notes that, while the announced SAF production capacity using the most widely used technology today, HEFA, could meet needs for 2030, but it would not be able to meet the demand for 2040 and the need for e-SAF synthetic fuels (obtained from green hydrogen). To ensure the energy independence and decarbonisation of the aviation sector in Spain and access to aviation fuels by 2050, it would be necessary to build 3 HEFA biofuel plants, 5 synthetic fuel plants and at least 24 SAF AtJ (Alcohol to Jet) and FT (Fischer Tropsch) biofuel plants. The report also highlights the importance of locating the SAF production plants close to raw materials, contributing not only to decarbonising the economy but also to the social and economic development of rural areas. Therefore, it is essential to establish a legal framework that facilitates the necessary investments, as well as encouraging the development of new technologies for the production of SAF, which are key to achieving the objectives beyond 2030.
According to Maarten Wetselaar, CEO of Cepsa, “The development of SAF is the main lever for the decarbonisation of the aviation sector, but at the same time, it can generate a new Spanish industry that fosters economic growth, job creation and greater energy independence. At Cepsa we are delighted to join Iberia, Iberia Express, Vueling, and BIOCIRC in jointly proposing measures that make Spain a European hub for SAF and a benchmark for sustainable air mobility. There is a global race to find a position in this new market, which is why we must accelerate the implementation of all the necessary measures so that Spain does not miss this opportunity.”
Marco Sansavini, President and CEO of Iberia, highlights that “We must not let this great opportunity for the country pass us by. We call on the central government and the rest of the public administrations to join forces in a national SAF strategy. We believe that now is the time for the government to launch a good incentive policy, just as it has already successfully done with green hydrogen. We are facing the perfect opportunity to promote the reindustrialisation of Spain, create jobs and wealth, and decarbonise such a complicated sector as aviation.”
Carolina Martinoli, President and CEO of Vueling, said: “We must highlight the role that the aviation industry plays in connectivity, integration and accessibility to multiple destinations; in addition to its social contribution and its impact on the economy and employment. For this reason, SAF is a key tool in the decarbonisation of this sector. But we need incentives to create a more competitive environment that allows us to scale up production and reduce its costs.”
Margarita de Gregorio, CEO of BIOCIRC, said, “The message we are sending today is unequivocal: Spain can be a leader in SAF production. The ambitious European objectives of REFuelEU Aviation open a window of opportunity for a country like ours, with so many renewable resources (both biomass and energy) to manufacture SAF in our territories and great scientific-technical and industrial capacity. The added value could not be more strategic, as it will allow industrialisation, replacing fossil aviation fuels with renewable ones and addressing the demographic challenge. And it is also inclusive, as all the agents involved in the value chain can participate, from the primary and secondary sectors, to public and private agents, and at all levels: national, autonomous, regional and local. We urgently need a framework strategy for the country, which establishes the regulatory, political and incentive scenario that facilitates the viability of the projects. We are not talking about the future, but about the immediate present.”
The report highlights the importance of coordinating agreements between the various agents that make up the value chain, including public administrations, to ensure the sustainable development of this industry. For this reason, it calls for the streamlining of permits and authorisations, the development of airport infrastructures, as well as the establishment of a European mechanism for the traceability of SAF. It also mentions the difficulties of accessing the different types of waste used as the necessary raw material, due to their high dispersion, and the lack of a centralised body to facilitate their management, as well as the absence of incentives or obligations to support this effort.
More than €300 million to boost SAF consumption
The proposed measures include the creation of an annual fund of more than €300 million to finance the development of production plants and encourage consumption, using the income obtained by the State through auctions of emission rights.
The report predicts that, with the current roadmap, the incorporation of SAF in Spain will entail an additional cost of €5,045 million in 2040, increasing progressively between €68 million in 2025 and €678 million in 2030. If this additional cost cannot be avoided through measure, such as the roadmap presented, it would have to be assumed by the aviation sector and end consumers. In Spain, a third of the NextGen Funds (more than €70,000 million) has been allocated to the “Green Deal”; however, there is no allocation for the decarbonisation of the aviation sector or the SAF industry.
The report also includes a set of supporting measures that address the drive throughout the value chain to establish a holistic support strategy, which includes economic, fiscal, regulatory and cross-cutting measures. Thus, the companies that promote the report ask the Government for a national pact for the opportunity that SAF represents, which should materialise in a national strategy that places this new energy vector as a priority in energy and industrial policies in Spain.
International commitment to SAF to accelerate the decarbonisation of the aviation sector
New renewable fuels play a key role in achieving the goals set out in the Fit for 55 package, which the European Commission set out to reduce greenhouse gases by 55% by 2030 (compared to 1990) and achieve climate neutrality by 2050. The package includes initiatives such as ReFuelEU Aviation, which will require aviation fuel to incorporate SAF progressively, from 2% starting next year to 70% in 2050. IATA, the International Air Transport Association, considers SAF to be key for the sector to meet its sustainability goals. In 2016, only 500 flights had tested the use of SAF, and by 2025 it is expected that there will be one million flights using this sustainable fuel.
SAF allows for a reduction of up to 90% in CO2 emissions compared to conventional kerosene consumption (taking into account its entire life cycle, from production to consumption). In this sense, according to the report, it is estimated that CO2 emissions from the aviation sector in Spain could be reduced by 14 million tonnes in 2050, which would boost the energy transition and the circular economy, by using waste that would otherwise end up in landfills.
Spain has the tools to lead the production of SAF, but other countries such as Germany, the United Kingdom and the United States are firmly committed to the development of this new energy vector. In fact, to date, all of them have initiated measures through economic and regulatory incentives and set more ambitious targets for the supply of SAF, far exceeding what is stipulated in European regulations. Spain may be left behind in a market that will be global, which is why institutional support is necessary to be able to lead this sector.
