Europe’s aviation sector faces a potential fuel shock as demand for sustainable aviation fuel (SAF) surges while production lags dangerously behind, according to a new report from SAS.
The airline’s Aviation Insights report, titled “The Need for e-SAF in Scandinavia,” highlights how the EU’s ReFuelEU Aviation regulation could create a structural shortage of electro-sustainable aviation fuel (e-SAF) from 2030 onwards.
Without rapid investment in domestic production facilities, airlines may face sharply higher costs, reduced route networks, and increased vulnerability in Europe’s energy security. The warning comes as global fuel markets remain under pressure and the push for net-zero emissions intensifies.
Growing Demand Meets Zero Supply
Under the ReFuelEU mandate, airlines must gradually increase the utilize of sustainable jet fuel. However, no European e-SAF production facility has yet reached a Final Investment Decision (FID). This gap between regulatory ambition and industrial reality threatens to derail aviation’s green transition.
For Scandinavia alone, the SAS report projects a required for 36,000 tons of e-SAF in 2030. Demand is expected to climb to more than 160,000 tons by 2035 and reach 330,000 tons by 2040.
These volumes would require the equivalent output of one dedicated production plant by 2032, rising to 2–3 plants by 2035 and around five by 2040. Today, Europe has none.
In a structurally short market, e-SAF prices could rise toward the high cost of non-compliance penalties rather than reflecting actual production costs.
This would significantly increase operating expenses for airlines, ultimately pushing up ticket prices and pressuring connectivity across the continent.
A Second Energy Vulnerability
Mads Brandstrup Nielsen, Senior Vice President of Communication, Public Affairs & Sustainability at SAS, described the situation as a clear reminder of Europe’s exposure to fuel shocks.
“What we are seeing now is a reminder of how exposed Europe remains to global fuel shocks,” he declared.
“If we fail to build domestic e-SAF production, we risk creating a second vulnerability, this time inside a regulated system where demand is mandated but supply is not. This is a structural issue that will affect ticket prices, route networks and Europe’s competitiveness unless we act now.”
Brandstrup Nielsen emphasised that Europe faces a narrow window to lead in clean aviation technology.
Building e-SAF capacity is not only about meeting regulatory tarreceives but also about securing long-term energy stability, protecting business connectivity, and maintaining industrial competitiveness.
Two Paths Forward
The report outlines two possible scenarios. The first involves scaling back the ambition of the ReFuelEU regulation, which would delay the sector’s progress toward net-zero emissions. The second—and preferred—path requires urgent acceleration of production through tarreceiveed policy support, clear investment incentives, and quicker infrastructure development.
Without decisive action, Europe risks a long-term imbalance in sustainable fuel supply. This could expose airlines to repeated regulatory and market shocks, weaken regional connectivity, and create a new strategic depfinishency that becomes difficult to resolve later.
A Call for Urgent Action
Sustainable aviation fuel, particularly e-SAF produced utilizing renewable electricity and captured carbon, represents a critical pathway for decarbonising flights.
Unlike conventional SAF from biomass, e-SAF offers greater scalability and lower land-utilize impact. However, the technology remains early-stage and capital-intensive.
The SAS analysis underscores that policy must evolve beyond setting demand mandates. Governments and the EU required to actively de-risk investments in production facilities to bridge the supply gap before 2030.
Failure to do so could transform a well-intentioned climate policy into an unintfinished barrier for European aviation and its passengers.
As the industest prepares for stricter blfinishing requirements, the message from SAS is clear: ambition without supply security risks higher costs for travellers, reduced flight options for businesses, and stalled progress on climate goals.
Building domestic e-SAF production capacity is essential for a resilient, competitive, and genuinely sustainable European aviation sector.
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