The European Union’s ReFuelEU Aviation Initiative entered force in January 2025, mandating sustainable aviation fuel (SAF) blending requirements across all EU airports. For freight forwarders relying on air cargo capacity, this isn’t abstract policy. It’s a cost structure shift that will reshape pricing, capacity allocation and carrier relationships.
But the first compliance deadline exposed a critical gap. Fuel suppliers missed the February 14, 2026 documentation deadline, leaving airlines unable to claim Emissions Trading System (ETS) incentives worth millions of euros. Without those offsets, SAF costs-already up to 10 times higher than conventional fuel-become unsustainable.
The Price Gap Is Real, and Penalties Are Steep
The European Union Aviation Safety Agency (EASA) published 2024 reference prices that expose the scale of the challenge. Conventional jet fuel is priced at €734 per tonne. Biofuels and advanced biofuels come in at €2,085 per tonne. Synthetic aviation fuel (eSAF) hits €7,695 per tonne-more than ten times the cost of fossil kerosene.
Under Article 12 of ReFuelEU Aviation, penalties must be at least twice the price differential between SAF and conventional fuel. For standard SAF, that means fines around €2,700 per tonne. For eSAF shortfalls starting in 2030, penalties could reach €13,992 per tonne. Germany plans to impose €17,000 penalties for each tonne suppliers fall short on hydrogen-based synthetic aviation fuel obligations.
Fuel suppliers that miss blending quotas must make up shortfalls in subsequent years, creating a compliance snowball effect that will ripple through air cargo pricing.
The Mandate Ramps Fast
ReFuelEU Aviation isn’t a gradual phase-in. The mandate starts at 2% SAF blending in 2025, jumps to 6% in 2030, hits 20% in 2035 and reaches 70% by 2050. A sub-mandate for synthetic e-fuels begins at 1.2% in 2030 and climbs to 35% by 2050.
Aviation emissions make up nearly 4% of total EU greenhouse gas emissions. Commercial flights in the EU could increase by 42% by 2040 compared to 2017 levels. Meeting those targets requires building 104 to 106 additional SAF plants by 2050. Around 40 large-scale e-fuel projects are planned in Europe with potential production capacity close to 3 million tonnes-roughly 5% of Europe’s aviation sector fuel needs.
Why the Documentation Crisis Matters
The European Regional Airlines Association (ERA) issued a stark warning in February 2026. Fuel suppliers failed to deliver required technical data to aircraft operators by the EU deadline. Without verified documentation, airlines cannot claim ETS allowances designed to offset SAF’s price premium.
“ERA members have acted in good faith and are fully committed to meeting their environmental obligations. But without timely, accurate and harmonised documentation from fuel suppliers, airlines face a direct barrier between compliance and the financial support that makes SAF uptake possible.”
– Montserrat Barriga, Director General, European Regional Airlines Association
The EU ETS allocated 20 million allowances worth approximately €1.5 billion for SAF uptake by aircraft operators until 2030. Those allowances are differentiated by fuel type, favouring higher-integrity synthetic fuels. But the incentive only works if airlines can prove SAF use through verified supplier certificates.
ERA called for immediate provision of standardised documentation and greater alignment of reporting metrics across EU member states. The association emphasised that regional airlines cannot be left carrying the consequences of bottlenecks elsewhere in the supply chain.
What Counts as Sustainable? It Depends
SAF regulations take two main forms: fuel mandates that dictate how much SAF suppliers must deliver, and emissions limits that cap greenhouse gas quantities air transport companies can emit. But what qualifies as sustainable varies by system.
The General Court of the European Union dismissed a legal challenge by ePURE and Pannonia Bio against the exclusion of crop-based biofuels from ReFuelEU Aviation. The EU prioritises non-crop feedstocks such as waste oils, lignocellulosic biomass, municipal solid waste and power-to-liquid synthetic fuels.
Yet the same gallon of fuel registers differently under different rules:
- SAF made from municipal solid waste is eligible under EU mandates but not under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)
- SAF made from palm oil and palm oil residues is ineligible under EU mandates but eligible in several Southeast Asian mandates
- Lifecycle emissions calculations vary by system, meaning the same fuel may show different greenhouse gas totals depending on the regulatory framework
This fragmentation complicates compliance for airlines operating across multiple jurisdictions and for forwarders sourcing capacity from carriers with mixed fuel strategies.
Funding the Transition
The EU’s Sustainable Transport Investment Plan, published in November 2025, aims to mobilise €2.9 billion for aviation e-fuel projects by the end of 2027. A €500 million pilot pooled double-sided auction for eSAF is scheduled for 2026.
E-kerosene production cost was 10 times higher than fossil kerosene in 2020. That gap is projected to narrow to 2.5 times higher by 2050, but bridging it requires sustained investment and regulatory certainty. Production of crops and by-products for energy uses in transport already requires 5% of arable land in the EU-27.
Free allowances for aircraft operators under the EU ETS have been reduced by 25% in 2024 and 50% in 2025, and will be eliminated by 2026. This accelerates the cost pressure on carriers, which will flow through to freight rates.
Broader Compliance Context: CSRD, CSDDD and More
SAF mandates don’t exist in isolation. The Omnibus I package simplifies sustainability reporting obligations across major EU directives, particularly the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
Under Omnibus I, CSRD applies to EU companies with €450 million net turnover and more than 1,000 employees. Wave 2 companies will publish their first report in 2028 for the previous financial year. CSDDD applies to companies with more than €1.5 billion in global net turnover and more than 5,000 employees. Non-compliance can lead to fines of up to 3% of global net turnover.
Transport-specific regulations continue to expand. FuelEU Maritime applied from January 2025 and requires ships calling at EU ports to reduce greenhouse gas intensity. The Emissions Trading System will extend to road transport in 2028 under ETS2.
Even companies below mandatory reporting thresholds must provide high-quality, audit-ready emissions data to customers who are in scope. Supply chain transparency is no longer optional.
What Freight Forwarders Need to Do Now
Air cargo capacity and pricing will be directly affected by SAF compliance costs and availability. Forwarders should:
- Monitor carrier fuel strategies and understand which airlines are ahead or behind on SAF blending targets
- Build SAF cost assumptions into pricing models, especially for routes with high EU exposure
- Track documentation and certification issues that could create capacity bottlenecks or pricing volatility
- Prepare for customer questions about emissions intensity and SAF use on specific routes
- Assess your own reporting obligations under CSRD, CSDDD or sector-specific rules, and understand what data your carriers and customers will demand
The first year of SAF mandates has tested whether the EU’s administrative framework can function in practice. Documentation failures and cost pressures show the system isn’t ready. But the mandates are irreversible, and compliance costs will only grow.
Forwarders who understand the fuel transition, track regulatory developments and build relationships with carriers managing SAF effectively will protect margins and win business. Those who treat SAF as someone else’s problem will face pricing shocks and capacity constraints they didn’t anticipate.
