Germany, Austria, and Luxembourg have launched a joint funding program for electricity-based sustainable aviation fuel (eSAF). The goal is to accelerate the market ramp-up of this fuel in Europe. Germany is providing up to two billion euros for this purpose. Austria and Luxembourg are each contributing up to 60 million euros. This was announced by the Federal Ministry of Transport (BMV).
The three countries are founding members of the eSAF Early Movers' Coalition, launched in December 2025. With the joint program, they are taking the next step towards the development and production of sustainable aviation fuels, according to their own statements. The funded eSAF quantities are to be marketed in the three countries according to the respective share of the funding provided. The program is subject to state aid approval by the European Commission.
Double auction to close price gap
The core of the funding mechanism is a double auction process. It aims to address a structural problem in building eSAF production: producers need long-term purchase agreements to secure investments in production facilities. In contrast, buyers from the aviation sector typically conclude contracts for aviation fuels over significantly shorter periods. According to the BMV, this gap has so far hindered the construction of new facilities.
In the double auction mechanism, offers from eSAF producers and demand from buyers are determined in a competitive process. An intermediary balances the difference between the offer and demand prices with government subsidies. This is intended to combine long-term production perspectives with competitive purchasing conditions.
Political voices on the cooperation
Federal Transport Minister Steffen Bilger emphasized the industrial policy nature of the project. "Europe needs not only ambitious goals for eSAF but also investments in industrial production," said Bilger. "If we invest now, value creation, know-how, and jobs can be created in Europe. At the same time, we strengthen our independence in energy and supply chains."
Austria's Mobility Minister Peter Hanke sees the program as a signal for building a European market. "With the market ramp-up of eSAF, we create the conditions for aviation to meet its European targets and simultaneously achieve measurable CO₂ savings," said Hanke. Luxembourg's Minister of the Economy Lex Delles pointed to the pioneering role: the three countries wanted "not only to protect the climate" but also to promote industrial value creation in Europe and independence from fossil energy imports. Luxembourg's Mobility Minister Yuriko Backes added that by joining the coalition, the country supports the expansion of eSAF production and accelerates the EU-wide market launch.
Market consultation completed
According to its own statements, the BMV has completed the market consultation on the planned German funding mechanism. The consultation was part of the state aid-required process. It served to obtain feedback from industry and science on the design of the instrument. According to the ministry, the results confirm a broad market interest in an accelerated ramp-up of eSAF production in Europe. Luxembourg has also conducted its own market consultation and published the results.
Background on the technology
Electricity-based renewable kerosene, also known as power-to-liquid kerosene, is made from renewable hydrogen and sustainable carbon. The hydrogen is produced by electrolysis using renewable electricity. If the fuel is produced according to European sustainability requirements, greenhouse gas emissions can be significantly reduced over the entire lifecycle, according to the BMV. For aviation, especially in long-haul areas, liquid energy carriers will remain indispensable for the foreseeable future. eSAF can be used in existing infrastructures for transport, storage, and refueling.
