Europe’s aviation decarbonisation plan rests on a deceptively simple promise: keep aircraft, engines, airports and fuel logistics broadly as they are, but replace fossil kerosene with sustainable aviation fuel. In policy language, this is a pragmatic pathway. In industrial language, it is a race for hydrogen, carbon dioxide, renewable electricity, catalysts, capital and certification. In physical terms, it is a vast new demand shock aimed at energy systems that are already struggling to electrify steel, chemicals, road transport, heating and data infrastructure. The VTT Technical Research Centre of Finland now presents this race in unusually direct terms: European aviation consumes about 70 million tonnes of aviation fuel a year, and by 2050 its demand for synthetic eSAF may exceed 20 million tonnes annually. VTT’s argument is not that Europe has found the answer, but that the answer will require an industrial system that barely exists today.
The headline is attractive for Finland. Synthetic aviation fuel, or eSAF, can be made by combining renewable hydrogen with captured carbon dioxide, then converting the resulting molecules into drop-in hydrocarbons through routes such as reverse water-gas shift plus Fischer-Tropsch synthesis, or methanol-to-jet pathways. Finland has low-carbon electricity, a large forest industry, concentrated biogenic carbon dioxide streams and a research infrastructure around hydrogen and power-to-X systems. VTT’s Bioruukki pilot centre in Espoo has already demonstrated a Finnish e-fuel value chain using high-temperature electrolysis, carbon capture and Fischer-Tropsch synthesis. Yet the investigative question is not whether the chemistry works. It does. The harder question is whether the economics, energy balance and policy architecture can scale fast enough to make aviation’s SAF narrative credible.
The ReFuelEU Aviation regulation gives the race its legal geometry. From 2025, fuel suppliers at EU airports must begin blending SAF into aviation fuel, starting at 2 per cent and rising to 70 per cent by 2050. The regulation also creates a specific synthetic aviation fuel sub-mandate, 1.2 per cent from 2030 and 35 per cent by 2050. The European Commission describes SAF as the “single most powerful tool” to cut aviation CO2 emissions, while also stressing that aircraft operators must avoid tankering and that airports must enable the infrastructure needed to deliver, store and refuel SAF. This is industrial policy by mandate: instead of waiting for airlines to pay voluntarily for low-carbon fuel, Brussels is creating a guaranteed market.
That market, however, starts from an almost microscopic base. EASA reports that global SAF production represented only 0.53 per cent of jet fuel use in 2024, up from 0.2 per cent in 2023. In the EU, current SAF production capacity is just above 1 million tonnes a year, and almost all of it is HEFA, produced from oils, fats and greases rather than from renewable electricity and carbon dioxide. EASA’s “realistic scenario” suggests that plants under construction could bring EU SAF capacity to about 3.5 million tonnes by 2030, enough to approach the early ReFuelEU requirement, but still dominated by HEFA and not by power-to-liquid eSAF. This matters because the early target may be reachable while the long-term target remains structurally underbuilt.
VTT’s intervention is therefore best read as a warning disguised as an opportunity statement. The organisation says European aviation will need “millions of tonnes” of SAF annually and that “large-scale deployment is constrained by high production costs, renewable energy demand, feedstock availability and quality requirements”. It also notes that eSAF is not yet produced at industrial scale and that production costs remain 6 to 10 times those of fossil jet fuel. This is not a marginal price premium. It is a full reordering of the aviation fuel economy, with airlines likely to face a permanent increase in fuel costs unless public support, carbon pricing, mandates, learning curves or cross-sector subsidies close the gap.
The first bottleneck is feedstock. HEFA is commercially mature and has allowed the SAF industry to show early volumes, but it is constrained by the availability of used cooking oil, animal fats and eligible waste oils. EASA notes that almost all current EU SAF capacity is HEFA, while VTT warns that large-scale HEFA use is limited by vegetable oil and waste animal fat feedstock availability. This creates a greenwashing risk: early SAF volumes can be presented as evidence that aviation is transitioning, even though the dominant pathway cannot plausibly carry the sector to 2050 at European scale. If the public hears “SAF” and imagines a single scalable technology, policy has already blurred the crucial distinction between bio-based stopgaps and synthetic fuel platforms.
The second bottleneck is electricity. eSAF is, in effect, renewable electricity converted into liquid hydrocarbons through hydrogen and carbon chemistry. That makes it potentially scalable, but also energetically expensive. The IEA’s net zero pathway says bioenergy, hydrogen and hydrogen-based fuels must rise from less than 1 per cent of energy use in aviation and shipping today to almost 15 per cent in 2030 and 80 per cent by 2050. For aviation alone, the IEA scenario has synthetic hydrogen-based fuels reaching 37 per cent of final energy consumption by 2050. IATA’s infrastructure roadmap gives a sense of the implied scale, warning that making alternative aviation fuels could raise the industry’s electricity demand by up to 10,000 TWh by 2050, potentially around 20 per cent of world electricity production.
This is where Finland’s apparent advantage becomes both real and conditional. Finland has a relatively clean power mix, significant nuclear generation, growing wind power and a large bioenergy base. IEA Bioenergy’s 2024 Finland update reports that renewables made up 39 per cent of Finland’s total energy supply in 2022, that the renewable share in final energy consumption was 48 per cent, and that around 80 per cent of renewable energy came from biomass. It also notes that roughly half of Finnish power production was renewable, with nuclear providing another 35 per cent in 2022. These features are attractive for power-to-X production. But low-carbon electricity is not surplus by default. Every MWh used to manufacture eSAF is a MWh not used for direct electrification, industrial heat, data centres, hydrogen-based steel or grid balancing.
The third bottleneck is carbon dioxide, and here Finland is unusually well placed. VTT argues that biogenic carbon dioxide is strategically important because current EU rules favour it over fossil CO2 in fuel accounting and because it is required for classifying the resulting fuel as eSAF. In Finland, VTT says large-scale emitters above 100,000 tonnes of CO2 per year are concentrated mainly in the forest industry and bioenergy production, emitting about 30 million tonnes of biogenic carbon dioxide annually. Other Finnish-sector analyses similarly point to roughly 28 million tonnes of annual biogenic CO2 from large point sources, a volume close to Finland’s fossil emissions in 2022. This makes pulp mills, bioproduct mills and bioenergy plants possible carbon hubs for aviation fuel.
But the carbon story is not as clean as it looks. Captured biogenic CO2 can be used to make eSAF, stored for removals or converted into chemicals and materials. These uses compete with one another. If the same tonne of biogenic CO2 is claimed as avoided emission, carbon removal and aviation fuel input in different accounting systems, the climate benefit risks being overstated. Agora Verkehrswende’s eSAF analysis warns that policymakers must distinguish between viable options and “mere wishful thinking”, and calls for comprehensive sustainability criteria not just for hydrogen but for eSAF as a whole. The implication is uncomfortable for aviation: carbon atoms are becoming strategic resources, and not every “captured carbon” claim deserves equal credit.
This is precisely where VTT’s industrial role acquires significance. VTT is not simply announcing a laboratory curiosity. Its E-fuel project has integrated high-temperature electrolysis, carbon capture and Fischer-Tropsch synthesis at the Bioruukki pilot centre. The project involved companies including Neste, Convion, Elcogen and Carbon Reuse Finland, and VTT reported that Convion and Elcogen upscaled solid oxide electrolysis technology in Finland to more than 100 kW. VTT’s Research Professor Juha Lehtonen framed this as proving that Finland can produce “high-quality synthetic fuel from low-emission electricity and carbon dioxide emissions”. That is a serious industrial capability, even if it is not yet a commercial supply chain.
The technological choice matters. Solid oxide electrolysis operates at high temperature and can offer higher efficiency than alkaline or PEM electrolysis when integrated with suitable heat sources. VTT’s E-fuel project specifically aimed to develop a concept with 10 to 15 percentage points higher efficiency than current commercial options, using high-temperature electrolysis and advanced heat integration. The project also explored carbon capture technologies and reverse water-gas shift as an alternative route to synthesis gas production. These are not glamorous consumer-facing innovations, but in a fuel system dominated by energy losses, incremental efficiency improvements can decide whether a plant is financeable.
The risk is that “pilot success” is misread as “industrial readiness”. VTT’s integrated demonstration produced hundreds of kilogrammes of renewable hydrocarbons, later upgraded and tested as e-diesel in a tractor at AGCO Power’s Linnavuori plant. That is meaningful evidence of process integration and fuel usability. It is not evidence that eSAF can be produced at millions of tonnes per year at prices airlines can absorb. EASA says no power-to-liquid plant in Europe has yet evolved beyond pilot stage in its realistic 2030 capacity assessment. Transport & Environment’s 2025 e-kerosene report identified 41 large-scale eSAF projects under development in Europe as of May 2025, but noted that none had reached final investment decision at the time. Europe has project announcements; it does not yet have an eSAF industry.
Where, then, is the innovation? In VTT’s case, the answer is not a single breakthrough molecule. The innovation lies in systems integration, in improving electrolysis efficiency, in combining CO2 capture with hydrogen production and hydrocarbon synthesis, and in building pilot infrastructure where companies can de-risk processes before final investment decisions. This is industrial innovation rather than invention. Its value comes from moving separate technologies into an integrated chain: water vapour to hydrogen, CO2 to carbon feedstock, synthesis gas to hydrocarbons, hydrocarbons to certified drop-in fuels. That kind of integration is less photogenic than a new aircraft design, but it is closer to the bottlenecks that determine whether SAF mandates can be met.
The harder question is whether the innovation is sufficient. Fischer-Tropsch synthesis is well known. Methanol-to-jet builds on established chemical industries. Carbon capture is not new. Electrolysers are already commercial, though still costly. What remains underdeveloped is the combined operating model: financing, permitting, grid access, renewable power purchase agreements, CO2 logistics, certification, offtake contracts and refinery integration. In that sense, VTT’s work is innovative because it targets the valley between laboratory chemistry and bankable infrastructure. It is not yet transformative because the most binding constraints are outside the pilot container: electricity price, policy stability, capital cost and aircraft fuel standards.
There is also a quality problem that receives too little public attention. Aviation fuel is not merely energy in liquid form. It is a safety-critical product with strict specifications governing freezing point, energy density, combustion behaviour, aromatics, materials compatibility and blending limits. The European Commission notes that current SAF blends are compatible with existing technology and certified up to 50 per cent, with research devoted to increasing the maximum blend to 100 per cent. EASA similarly stresses that SAF must meet international standards to ensure fuel safety and performance, while efforts continue to increase blending limits and support 100 per cent drop-in SAF by 2030. This means the eSAF race is also a certification race.
Cost remains the political fault line. EASA states that SAF prices are currently 3 to 10 times more expensive than conventional fuel, and VTT puts eSAF costs specifically at 6 to 10 times fossil jet fuel. If these numbers persist, the consequences will not be confined to fuel suppliers. Airlines will pass costs to passengers where they can, absorb margins where they cannot, or lobby for exemptions and public support. This is already the tension embedded in ReFuelEU: mandates create demand, but they do not automatically create low-cost supply. A mandate without enough projects becomes a penalty regime; a mandate with enough projects but high costs becomes a distributional fight over who pays for climate compliance.
The risk of import dependence is another unresolved issue. EASA warns that Europe must expand production capacity to avoid becoming overly reliant on imports. Transport & Environment argues that Europe currently has a head start in announced eSAF projects, with more than half of global announced production capacity, but also notes that China is advancing with 11 large-scale plants, mainly led by state-owned energy companies. If Europe mandates SAF but fails to industrialise eSAF domestically, it may reproduce a familiar pattern: climate ambition at home, strategic dependency abroad. Finland’s opportunity is therefore not only climate-related. It is about whether forest-industry CO2, Nordic power and Finnish process expertise can become part of Europe’s fuel sovereignty.
Finland’s forest industry could become a carbon refinery system for aviation, but this possibility has uncomfortable trade-offs. Finnish reports suggest that forest-industry and bioenergy CO2 could support synthetic fuels, chemicals and carbon storage, with some estimates pointing to a multi-billion-euro carbon economy by 2040 and investment needs in the tens of billions. The attraction is obvious: pulp mills and bioenergy plants would no longer be merely emitters, but suppliers of a strategic feedstock. The caution is equally obvious: if public policy overvalues utilisation relative to permanent storage, eSAF could divert biogenic CO2 away from carbon removals that may be more valuable for climate stabilisation.
There is also an aviation-specific moral hazard. SAF allows the industry to discuss decarbonisation without discussing demand. The IEA’s aviation tracking page says aviation is “not on track” and that stakeholders must combine low-carbon fuels with improved aircraft and engine design, optimised operations and demand restraint. Its net zero roadmap includes behaviour-driven demand reduction in aviation, with avoided demand from behavioural measures reaching 20 per cent by 2050. Yet industry messaging often collapses the transition into a fuel-substitution story. If SAF becomes a licence for unconstrained traffic growth, the fuel problem becomes even larger.
A more honest industrial strategy would admit that SAF is necessary but not sufficient. Long-haul aviation will remain dependent on liquid hydrocarbons for decades, because batteries and hydrogen aircraft face major technical and infrastructure barriers. Agora makes this point clearly, arguing that liquid hydrocarbons will be needed especially for long-haul flights and existing aircraft, while remaining hydrocarbon fuel demand will have to be covered with eSAF. But that does not mean every flight can be made guilt-free by future molecules. The eSAF system must be reserved for aviation segments where alternatives are weakest, not used to postpone operational efficiency, modal shift or demand management.
For VTT, the strategic task is to turn Finland’s ingredients into a credible industrial platform. That means proving higher-efficiency electrolysis at larger scale; integrating CO2 capture with pulp and bioenergy sites; developing synthesis and upgrading routes that meet aviation specifications; working with Neste and other fuel producers on certification; and providing techno-economic evidence that investors can trust. It also means resisting the temptation to oversell. The most valuable role for a public research organisation is not to produce optimistic slogans, but to reveal where the bottlenecks really are and which claims survive contact with mass balance, energy balance and investment discipline.
The investigative conclusion is stark. Europe has legislated a fuel transition before it has built the fuel industry. That may be defensible: without a mandate, investors may never move. But the mandate now exposes every missing link. HEFA can help in the 2020s but cannot carry aviation to 2050. eSAF can, in principle, scale far beyond waste oils, but only by consuming enormous quantities of renewable electricity and certified carbon. Finland has a plausible niche because its forest industry produces concentrated biogenic CO2 and its energy system is comparatively low carbon. VTT has credible technical assets because it is working on the exact integration problems that separate pilot plants from industry. But Europe’s SAF race is not yet won. It has barely left the runway.
EU aviation policy and industrial strategy
ReFuelEU Aviation is one of the world’s most consequential SAF policies because it creates a legally binding demand curve through 2050. It also attempts to prevent carbon leakage through anti-tankering rules and to place obligations across the supply chain, including fuel suppliers, airports and aircraft operators. More than 95 per cent of air transport departing from EU airports will be covered, according to the Commission. This is not merely environmental regulation. It is market design for a new fuel industry.
But the industrial strategy remains incomplete. Europe has demand certainty, yet it still lacks enough final investment decisions, grid connection capacity, low-cost renewable electricity, CO2 transport infrastructure and bankable offtake models. Transport & Environment’s finding that Europe had 41 large-scale eSAF projects under development but no FID as of May 2025 is perhaps the clearest indicator of the gap between policy ambition and industrial execution. EASA’s assessment that realistic 2030 production will remain overwhelmingly HEFA-based reinforces the same point: the early SAF mandate may be met, while the eSAF sub-mandate remains exposed.
For the EU, the strategic choice is whether SAF policy becomes a compliance market or a manufacturing strategy. A compliance market imports molecules and distributes penalties. A manufacturing strategy builds electrolysers, carbon capture systems, synthetic fuel plants, certification capacity, storage terminals, port logistics and skilled labour. Finland fits naturally into the second model. Its forest-industry carbon sources, VTT’s Bioruukki platform, existing fuel expertise around Neste-linked ecosystems and relatively clean power mix give it a plausible role in Europe’s eSAF supply chain. But Finland cannot do this alone. The EU must coordinate electricity planning, carbon accounting, state aid, public procurement, contracts for difference and sustainability rules if it wants eSAF to become an industry rather than an accounting category.
The policy gap is therefore not ambition, but sequencing. Europe has set the aviation fuel destination for 2050, but the 2030s will decide whether the route is credible. If large-scale eSAF projects fail to reach FID soon, the EU risks a squeeze: rising mandates, insufficient synthetic supply, dependence on constrained HEFA, rising ticket prices and political backlash. If projects move now, Finland and other countries with biogenic CO2 and low-carbon power could become industrial winners.
SAF has become Europe’s new aviation fuel race, but the race is no longer about airlines
alone. It is about who controls the next generation of
carbon, hydrogen and electricity infrastructure.
References
- Agora Verkehrswende. (2024, July 17). Defossilising aviation with e-SAF. https://www.agora-verkehrswende.org/publications/defossilising-aviation-with-e-saf-1
- European Commission. (n.d.). ReFuelEU Aviation. Mobility and Transport. https://transport.ec.europa.eu/transport-modes/air/environment/refueleu-aviation_en
- European Union Aviation Safety Agency. (n.d.). SAF market. European Aviation Environmental Report. https://www.easa.europa.eu/en/domains/environment/eaer/sustainable-aviation-fuels/saf-market
- European Union Aviation Safety Agency. (n.d.). Sustainable aviation fuels. European Aviation Environmental Report. https://www.easa.europa.eu/en/domains/environment/eaer/sustainable-aviation-fuels
- IEA. (2023). Aviation and shipping. https://www.iea.org/reports/aviation-and-shipping
- IEA. (n.d.). Aviation. https://www.iea.org/energy-system/transport/aviation
- IEA Bioenergy. (2024). Implementation of bioenergy in Finland: 2024 update. https://www.ieabioenergy.com/wp-content/uploads/2024/12/CountryReport2024_Finland_final.pdf
- IATA. (n.d.). Energy and new fuels infrastructure net zero roadmap. https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/energy-and-new-fuels-infrastructure-net-zero-roadmap.pdf
- Transport & Environment. (2025, June). The e-SAF market: Europe’s head start and the road ahead. https://uploads.transportenvironment.org/production/files/202504_e-kerosene_report.pdf
- VTT Technical Research Centre of Finland. (2023, May 25). Production of electrofuels from green hydrogen and captured carbon is demonstrated at VTT Bioruukki. https://www.vttresearch.com/en/news-and-ideas/production-electrofuels-green-hydrogen-and-captured-carbon-demonstrated-vtt
- VTT Technical Research Centre of Finland. (n.d.). E-fuel. VTT Research Information Portal. https://cris.vtt.fi/en/projects/e-fuel/
- VTT Technical Research Centre of Finland. (2026, June 25). Defossilising European aviation requires millions of tonnes of sustainable aviation fuels, VTT solves bottlenecks in eSAF production. https://www.vttresearch.com/en/news-and-ideas/defossilising-european-aviation-requires-millions-tonnes-sustainable-aviation-fuels
