Germany, Austria and Luxembourg intend to work together to accelerate the market ramp-up of electricity-based Sustainable Aviation Fuel (eSAF) in Europe. To this end, the three countries are introducing a double-sided auction mechanism. The process brings together producers and buyers. Where there is still a price gap between the two sides, public funding comes into play. Germany is providing up to two billion euros for this purpose, whilst Austria and Luxembourg are each providing up to 60 million euros.

Steffen Bilger, Federal Minister of Transport (Germany):

When it comes to eSAF, Europe needs not only ambitious targets but also investment in industrial production. Germany, Austria and Luxembourg are jointly demonstrating how European cooperation works in practice. We are pooling our funding to create better conditions for investment decisions in a technology of the future. For me, eSAF is not just a matter of climate policy but also an opportunity for industrial policy. If we invest now, we can generate added value, expertise and jobs in Europe. At the same time, we are strengthening our independence in terms of energy and supply chains. We want to enable innovation and thereby make aviation more climate-friendly, step by step.

Peter Hanke, Minister for Mobility (Austria):

By jointly funding eSAF, Germany, Austria and Luxembourg are sending a strong signal in favour of establishing a European market for renewable fuel. We are creating long-term prospects for producers, promoting transparent price signals and helping to ensure that eSAF will also be available in Austria. At the same time, we are strengthening our resilience and reducing our dependence on imports from regions outside Europe. The key point is: By bringing eSAF to market, we are creating the conditions that will enable the aviation sector to meet its European targets whilst, at the same time, achieving measurable CO₂ savings. This is an important step towards a sustainable aviation sector in Europe.

Lex Delles, Minister for the Economy, SMEs, Energy and Tourism (Luxembourg):

Together with Germany and Austria, we are taking the lead in embarking on a path that will not only protect the climate but also promote industrial value creation in Europe and make us more independent of fossil fuel imports.

Yuriko Backes, Minister for Mobility and Public Works (Luxembourg):

Luxembourg stands determinedly alongside Austria and Germany in promoting climate-friendly aviation. By joining the eSAF Early Movers Coalition, we are supporting the expansion of eSAF production, reducing dependence on fossil fuels and accelerating their EU-wide market introduction. Luxembourg is playing an active role in building a safe, sustainable and competitive aviation sector by promoting new production capacities and helping to ensure that part of this production is made available to our domestic market. To build the sustainable mobility of tomorrow, we are laying the foundations today with a clear vision for the future, meeting both market demands and our population’s expectations for effective climate action.

With this joint funding programme, the three founding members of the eSAF Early Movers’ Coalition are taking the next step towards the development and production of sustainable aviation fuels. The subsidized volumes of eSAF are to be placed on the market in Germany, Austria and Luxembourg in proportion to the respective share of funding contributed by each country.

The industrial production of eSAF requires substantial investment. At the same time, there is currently a structural problem: Producers need long-term off-take agreements to secure investment decisions. Buyers, on the other hand, typically enter into aviation fuel contracts covering significantly shorter timeframes. These time and cost gaps have so far made it difficult to build new production facilities.

It is precisely here that the double-sided auction mechanism comes into play. In a competitive process, bids from eSAF producers on the one hand, and demand from buyers on the other, are determined. An intermediary bridges the gap between the supply and demand prices using government subsidies. This allows to bring together long-term production prospects and competitive purchase terms.

The aim is to facilitate investment decisions for new eSAF production facilities whilst simultaneously developing a competitive market for the purchase of the fuel.

The funding programme is subject to approval under state aid law by the European Commission.

Market consultation confirms market interest

The Federal Ministry of Transport has successfully concluded the market consultation on the planned German funding mechanism. The consultation was part of the procedure required under state aid law and served to gather feedback from industry and academia on the specific design of the funding instrument.

The results confirm the market’s broad interest in an accelerated ramp-up of eSAF production in Europe. At the same time, the feedback underlines the importance of suitable funding instruments to overcome existing barriers to investment.

The results of the Federal Ministry of Transport’s market consultation are available at: www.bmv.de/evaluation-eSAF

The results of Luxembourg’s market consultation are available here: https://meco.gouvernement.lu/dam-assets/publications/rapport-etudeanalyse/th022-e26-17092026-results-of-the-luxembourg-marketconsultation-on-esaf.pdf

Further information: eSAF for climate-friendly aviation

Electricity-based Sustainable Aviation Fuel, also known as power-to-liquid fuel, is produced from renewable hydrogen and sustainable carbon. The hydrogen is produced by electrolysis using renewable electricity. If the fuel is produced in accordance with European sustainability requirements, its greenhouse gas emissions can be significantly reduced over the entire life cycle.

Liquid fuels will remain indispensable for air transport for the foreseeable future. This applies in particular to long-haul services. eSAF therefore offers an important opportunity to reduce emissions from air transport. At the same time, existing infrastructure for transport, storage and refuelling can continue to be used.

Germany, Austria and Luxembourg are among the founding members of the eSAF Early Movers’ Coalition, which was launched in December 2025. The Coalition was founded with the aim of accelerating the market ramp-up of eSAF in Europe through cooperation, exchange of experience and joint financial support.