- EU allocates €430m in ETS allowances to airlines for SAF
- 130 airlines receive funding for 2025
- Fourfold increase compared to previous year
- SAF accounted for 2.8pc of aviation fuel at EU airports
- Total economic benefit for 2025 reaches €565m
The European Union has officially allocated roughly 5.2m EU Emissions Trading System allowances valued at approximately €430m ($494m) to 130 airlines to subsidise their Sustainable Aviation Fuel usage throughout 2025. Adopted by the European Commission this funding decision marks a fourfold increase compared to the €100m (€114.9m) in SAF allowances distributed the previous year. The primary purpose of this allocation is to offset the steep price premium of SAF compared to conventional fossil-based kerosene.
The €430m in free carbon permits covers 50pc to 70pc of the price gap for typical European flights. For specific regions such as flights departing from islands or outermost territories it covers up to 100pc of the cost difference. On top of the direct allowances airlines benefit from an extra €135m incentive stemming from the zero-rating of SAF under the EU ETS bringing the total economic benefit for 2025 to roughly €565m.
Airlines collectively claimed more than 530,000 tonnes of SAF under this mechanism for 2025 operations leading to an estimated 1.7m tonnes of CO2 abatement. According to the latest data from the European Union Aviation Safety Agency SAF accounted for 2.8pc of the total 39.3m tonnes of aviation fuel supplied at EU airports in 2025. This comfortably beat the bloc’s initial mandatory 2pc ReFuelEU Aviation target.
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