Spain's Push for Synthetic Aviation Fuel: A New Path Amid Oil Volatility
The recent Iran crisis has highlighted the vulnerabilities of relying on fossil fuels for aviation, prompting a coalition of 21 Spanish organizations to urge Madrid to convert political support for sustainable aviation fuels (SAF) into concrete economic commitments. This initiative comes ahead of the June EU Transport Council, where synthetic SAF is expected to be a key topic. Below, we explore key questions about this development.
What is the main goal of the Spanish coalition urging action on synthetic SAF?
The coalition, comprising over 21 companies, trade associations, and industry bodies, is calling on the Spanish government to back its political commitment to synthetic sustainable aviation fuel with tangible economic measures. They want Madrid to invest in production infrastructure, provide subsidies, or establish mandates that accelerate the adoption of synthetic SAF. This push is timed before the June EU Transport Council, where member states will discuss policies to decarbonize aviation. By acting now, Spain can position itself as a leader in synthetic fuel production, reducing its dependence on imported fossil fuels and creating a more resilient aviation sector.
How does the Iran crisis expose fossil fuel vulnerability for aviation?
The Iran crisis has caused significant volatility in global oil markets, directly impacting airlines through higher fuel costs. For long-haul flights, the geopolitical oil premium can add up to €88 per passenger — 29 times more than what airlines would need to comply with ReFuelEU mandates for sustainable aviation fuel. This stark difference shows how fossil fuel dependence makes aviation vulnerable to geopolitical shocks, whereas synthetic SAF, produced domestically from renewable energy, offers price stability and energy security. The crisis underscores the urgency for Spain and Europe to transition to synthetic fuels to insulate the sector from such disruptions.
What is ReFuelEU and how does it relate to synthetic SAF?
ReFuelEU is a European Union regulation that mandates a gradual increase in the share of sustainable aviation fuels (SAF) used at EU airports. It sets blending targets starting from 2% in 2025 to 70% by 2050. Synthetic SAF, made from captured CO₂ and green hydrogen via processes like Fischer-Tropsch, qualifies under ReFuelEU. The regulation currently imposes a small compliance cost on airlines, but the coalition argues that the geopolitical risk premium from fossil fuels is far higher than this cost. Thus, investing in synthetic SAF is not only an environmental necessity but also an economic one, as it reduces exposure to oil price spikes.
What economic benefits could Spain gain from supporting synthetic SAF?
By backing synthetic SAF, Spain could reap several economic benefits. First, it would reduce the financial burden on passengers, who currently pay up to €88 extra per long-haul flight due to oil price volatility. Second, it would create a new industry centered on renewable hydrogen and carbon capture, generating green jobs and fostering technological innovation. Third, Spain has abundant solar and wind resources, ideal for producing the green hydrogen needed for synthetic fuels. This could position the country as an exporter of synthetic SAF to other European nations, boosting trade and energy independence. Finally, it would help Spain meet its climate targets, avoiding potential fines under EU law for non-compliance with ReFuelEU.
How does synthetic SAF compare to other types of sustainable aviation fuel?
Synthetic SAF, also known as e-fuels or electrofuels, differs from other SAF types like those from used cooking oil or agricultural waste (hydroprocessed esters and fatty acids - HEFA). While HEFA fuels are more established and cheaper, they rely on limited feedstocks. Synthetic SAF, on the other hand, uses widely available inputs — water and CO₂ — and can be produced at scale without competing with food or land use. However, it is currently more expensive due to high energy costs. The Spanish coalition emphasizes that with political and economic support, synthetic SAF's costs can drop significantly, making it a long-term solution for aviation decarbonization, especially for long-haul flights where battery or hydrogen planes are not viable.
What specific actions is the coalition asking from the Spanish government?
The coalition is urging Madrid to move beyond political statements and adopt concrete economic policies. These include: establishing a national mandate for synthetic SAF blending, offering production subsidies or tax credits for synthetic fuel plants, investing in related infrastructure like hydrogen electrolyzers and CO₂ capture facilities, and creating a public-private partnership to fund research and development. They also want Spain to champion stronger EU-level policies at the June Transport Council, such as higher blending targets and financial incentives for member states that produce synthetic fuels. The goal is to create a stable market that attracts private investment and scales up production rapidly.
How could this push affect passengers’ airfare costs?
Currently, passengers bear the cost of oil market volatility through ticket prices — up to €88 extra per long-haul flight due to geopolitical premiums. If synthetic SAF becomes mainstream, this premium would disappear, potentially lowering fares. However, there is an upfront cost: SAF currently costs more than conventional jet fuel. Over time, as production scales and technology improves, the price gap is expected to narrow. The coalition argues that the long-term stability offered by synthetic SAF outweighs initial increases, and that policy measures can buffer passengers during the transition. In the worst case, a small surcharge for SAF (far less than the €88 premium) might appear on tickets, but overall savings from reduced oil dependence could make flying cheaper.
What is the timeline for action and what role does the EU Transport Council play?
The immediate deadline is the June EU Transport Council meeting, where aviation decarbonization policies are on the agenda. The Spanish coalition wants Madrid to present a concrete plan for synthetic SAF financing before this meeting to influence EU-wide decisions. The Council could adopt new measures such as harmonized subsidies for synthetic fuels, higher blending mandates, or a carbon price on conventional jet fuel. Spain’s commitment would signal to other member states that economic support for synthetic SAF is feasible. Looking further ahead, the coalition hopes to see early synthetic fuel plants operational by 2028, with significant production by the mid-2030s, aligning with ReFuelEU milestones.