Enabling Sustainable Aviation Fuel (SAF) in the EU

Abstract

Technologies such as power-to-liquid (PtL) and direct air capture (DAC) offer significant promise in producing carbon-neutral fuels for aviation, also known as sustainable aviation fuels (SAFs) (McQueen et al., 2021; Pio et al., 2023). Despite mandates set by the European Union to accelerate SAF adoption, the airline industry remains hesitant, citing high costs and technological complexities. This hesitancy perpetuates a “chicken-or-egg” problem where high costs limit adoption, and limited adoption prevents cost reductions (Erriu et al., 2024).
Addressing the chicken-and-egg problem and meeting EU mandates to enable sustainable air travel requires identifying the most viable sustainable aviation fuel (SAF) technology incorporating direct air capture (DAC) within the EU. To achieve this, the costs of state-of-the-art electrolysis technologies were analyzed alongside the latest DAC data provided by Skytree, a company specializing in direct air capture. This approach aims to bridge the gap between theoretical literature and practical industry values.
While viewing CO₂ as a valuable feedstock is not a new concept, this analysis is novel in combining this perspective with the varying carbon efficiencies of different SAF production technologies. These efficiencies directly impact the levelized cost of kerosene by requiring different volumes of 'valuable' CO₂ from direct air capture (DAC), offering a fresh approach to evaluating the economic viability of SAF pathways.
This study extends the existing literature, which provides substantial insight into cost and performance metrics, by adopting a socio-technical lens. This perspective explores what is needed beyond lower costs to enable the deployment of sustainable aviation fuel technologies within the current socio-technical system. Therefore, the research question guiding this study is: How can sustainable aviation fuel (SAF) be developed within the EU, specifically considering technologies that incorporate direct air capture (DAC)?
The socio-technical analysis began with a literature review to identify SAF technologies and their components, guiding an actor analysis using the Technological Innovation System (TIS) framework to link stakeholders with technological and regulatory roles. An institutional analysis followed, identified key policies, formal rules, and regulatory hurdles shaping the SAF innovation system, while subsequent network analyses examined system support structures. Together with the problem statement, these analyses guided the development of technical criteria to assess the feasibility of the outlined technologies as well as non-technical criteria addressing broader factors necessary for successful short-term deployment within the EU. Using techno-economic data from the literature review, along with up-to-date direct air capture data provided by the internship provider, Skytree, the best-assessed technologies from the socio-technical analysis were compared based on the levelized cost of fuel. The analysis transitions from an overall cost comparison to a detailed examination of specific cost components, using CAPEX degression curves to average future estimates from literature and comparing cost breakdowns in 2024, 2035, and 2050 to highlight structural shifts as technologies mature. A concluding sensitivity analysis varies key assumptions to identify critical cost drivers influencing the economic viability of SAF technologies.
This study selected fossil, biogenic, and direct air capture (DAC) carbon sources coupled with proton exchange membrane electrolysis (PEM), solid oxide electrolysis (SOE), reverse water-gas shift (RWGS) reactor, and Fischer-Tropsch (FT) synthesis for further analysis. Socio-technical analyses emphasized collaboration among airlines, knowledge institutes, and supporting organizations, alongside strong connections with energy providers, feedstock suppliers, and infrastructure providers to address supply chain complexities. IATA (International Air Transport Association) was identified as a potential coordinator for collective investments to overcome high costs, low initial demand, and narrow profit margins, particularly in EU states with SAF regulations. Production sites near renewable energy sources and fueling infrastructure were recommended to reduce logistical costs and grid congestion, with regions like Iceland or Norway offering short-term potential despite higher costs. Locating facilities in areas without alternative carbon sources strengthened the case for DAC by reducing reliance on limited carbon infrastructure. Policy analysis highlighted the need to phase out or reevaluate free EU ETS allowances for fossil CO₂ to ensure fair competition and support DAC and biogenic CO₂ adoption.
Techno-economic analysis identified proton exchange membrane electrolysis (PEM) coupled with a reverse water-gas shift (RWGS) reactor, Fischer-Tropsch (FT) synthesis and biogenic (BIO) CO₂ as the most cost-effective current option due to its lower CAPEX compared to solid oxide electrolysis (SOE), though it remains 4 to 5 times more expensive than fossil kerosene. DAC-based pathways, while initially more costly, are projected to become competitive by 2028 with rising EU ETS carbon prices and to surpass fossil-based CO₂ in cost-effectiveness across all scenarios by 2036, highlighting the need to revise transitional fossil CO₂ timelines and phase out free allowances. High-concentration biogenic CO₂ can meet demand but is currently underutilized due to limited economic incentives for capture and insufficient carbon infrastructure. By 2050, all studied sustainable aviation fuel pathways are expected to cost between €1.80 and €2.00/liter, with proton exchange membrane electrolysis (PEM) technology emerging as the most economical and SAF prices ranging from 1 to 2 times the cost of fossil kerosene. Solid oxide electrolysis (SOE) technology demonstrates strong potential with improved efficiency, extended lifetimes, and the ability to co-electrolyze CO₂ and water to produce syngas, making it particularly promising for sustainable aviation fuel (SAF) production. High CAPEX and low operational hours, particularly for direct air capture, drive up costs, necessitating strategies such as electricity storage development and nuclear energy expansion to ensure affordable power and meet the EU’s increasing electricity demand for aviation decarbonization. The OPEX-heavy nature of sustainable aviation fuel production underscores the urgency for cost-effective electricity, raising concerns about whether renewable energy could be better utilized in sectors with greater decarbonization potential.