Sustainable aviation fuel (SAF) has emerged as a crucial option for reducing emissions in a sector that is challenging to electrify. Electrolysis-derived SAF, or eSAF, holds particular promise as it uses power-to-liquid (PtL) technology to convert renewable electricity, water and captured CO₂ into synthetic jet fuel.

This alternative differs from bio-based SAF, which depends on agricultural feedstocks and has inherent scalability limits. eSAF, by contrast, can theoretically be produced at larger volumes due to its reliance on renewable electricity and CO₂. However, eSAF production faces significant barriers, such as high costs, large energy requirements and the need for substantial investment in renewable infrastructure and carbon-capture technology.

The adoption of SAF is being supported by policies such as the EU’s ReFuelEU Aviation regulation, which establishes blending mandates for airlines and includes specific blending targets for PtL fuels such as eSAF. These mandates are geared towards bio-based SAF production, starting in 2025, but by 2030 incorporate a proportion of eSAF. The mandates themselves are placed on the aviation fuel suppliers, which will face penalties for non-compliance of at least twice the price difference between traditional jet fuel and SAF. This penalty encourages uptake even with a SAF price significantly higher than that of fossil-derived jet fuel.

There are two main pathways to eSAF being explored, both of which use captured CO₂ and electrolytic (green) hydrogen as feedstocks. One pathway includes the production of e-methanol as an intermediary before being converted into olefins then oligermerised into eSAF. Another pathway uses Fischer-Tropsch (FT) and reverse water gas shift reactions to combine the feedstocks, via synthesis gas, into a synthetic jet fuel. Each of these reactions are used in commercial production of a range of fuels and chemicals.

Hurdles to clear

While the aforementioned policies mandate consumption of eSAF, there remain several hurdles for widespread implementation of commercial production facilities. Firstly, eSAF production costs are estimated at 3–4 times higher than those of fossil-derived jet fuel, mainly due to the large amount of renewable energy required to produce the green hydrogen, but also to the capital costs of electrolysers and downstream processing equipment. These high theoretical costs can be mitigated by developers via locking in power costs—by establishing a power purchase agreement—and ensuring a long-term offtake is secured.

A second hurdle to overcome is the large amount of CO₂ required. Most eSAF mandates, especially in Europe, will require the CO₂ to be from biogenic sources, which are currently limited in scale. As an example, one of the obvious biogenic sources of CO₂ is biogas, but a typical biogas plant produces only 30,000t CO₂/yr, less than 20% of the approximate 160,000t/yr that etasca estimates is required for a commercial-scale eSAF plant. As such, there may be a need to aggregate CO₂ from a variety of sources, which will further add to the costs.

Innovative methods of utilising CO₂ sources will be one of the key challenges to be addressed by individual project developers. In the longer term, CO₂ could be used from direct air capture, but this technology is still prohibitively expensive (currently 5–6 times as costly as biogenic CO₂ from biogas facilities).

A further hurdle to establishing commercial plants is the demonstrated scale of the technology. As yet, the individual elements of the eSAF process have been demonstrated in other applications, but the integration into eSAF production at scale has yet to be commercialised. The variability in renewable power leads to challenges related to intermediate storage of both energy (in a battery energy storage system) and hydrogen.

In addition, economies of scale dictate that large eSAF plants will be required, but this then requires a significant scaleup of most of the technology elements. The technology risk as a barrier to investment can be mitigated to an extent by technology suppliers providing equity in the project, or through providing robust guarantees on performance.

Lastly, the market is driven by the need for offtake. While the mandates are geared towards the fuel suppliers themselves, many have been reluctant to investment in production or enter into long-term offtake agreements. To combat the high upfront costs mixed with uncertain revenue streams as a barrier to investment, support mechanisms such as contracts for difference—whereby producers are guaranteed a price for eSAF and receive payments to compensate for any shortfall in market prices—may be necessary to reduce investment risk and attract private capital for scaling eSAF production.

As the aviation sector pursues net-zero emissions by 2050, eSAF has the potential to support decarbonisation efforts alongside bio-based SAF. While bio-based SAF may meet short-term needs, eSAF offers a longer-term solution with fewer limitations related to feedstock availability. However, achieving eSAF’s potential requires coordinated support from policymakers, investors and technology developers to address cost, infrastructure and technical barriers.

Andy Ballard is director of etasca.

This article is taken from Outlook 2025, our annual publication examining the year ahead in energy. Subscribers can click here to read their free copy. The publication can also be bought from our store here.

---

Author: Andy Ballard