Germany plans €2bn eSAF auction — OilPrice
Germany’s Federal Ministry of Transport plans to allocate up to €2 billion for a double auction to support the production of synthetic eSAF aviation fuel. The mechanism is intended to provide producers with the long-term contracts needed to finance new plants, while allowing buyers to enter into shorter agreements. OilPrice reports.
How the double auction will work
Germany wants to use the H2Global model. A state intermediary will conclude long-term contracts with producers to purchase eSAF, selecting the lowest-priced offers. The fuel will then be sold to distributors under shorter contracts, while the difference between the purchase and resale prices will be covered with public funds.
Synthetic fuel is produced from hydrogen generated using renewable electricity and sustainable carbon dioxide. It can be used in existing aircraft, storage systems and airport infrastructure. At the same time, constructing individual facilities may require €1–2 billion in capital investment, while airlines are not prepared to lock in current high prices for decades.
High prices and capacity shortages
According to EASA reference prices for 2025, a tonne of synthetic aviation fuel cost an average of about €7,520, compared with €640 for conventional jet fuel. According to Transport & Environment, 41 large eSAF projects have been announced in Europe, with a combined potential of nearly 3 million tonnes per year. However, only four of them are considered advanced, and none has reached a final investment decision.
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The ReFuelEU regulation stipulates that from 2030, synthetic fuel must account for 1.2% of aviation fuel supplied to EU airports, within the overall 6% sustainable aviation fuel requirement. In March, the Airlines for Europe association said that projects with confirmed investments would provide only 0.7% of the volume needed to meet the 2030 target.
Experience from the previous tender
eSAF was already included in the H2Global pilot project launched by Germany in 2022, but no contract was awarded at the time, and the funds were redirected to renewable methanol. The new proposal provides for a separate budget and a longer supply period. It is also linked to the Early Movers Coalition of eight countries, which seeks to mobilize at least €500 million for the first multinational auction.
Fuel eligible to participate in the program must be ASTM-certified, comply with EU rules on renewable fuels and be produced in the European Economic Area.
