France plans e-SAF double-sided auction in 2027 budget

Spanish Market: Biofuels, E-fuels, Hydrogen
02/10/26

France plans to buy up to 160,000 t/yr of synthetic aviation fuel through a double-sided auction scheme, with any ultimate shortfall covered by the aviation fuel sector rather than the state, its 2027 budget bill published on 1 October shows.

Under the bill, a state-appointed body would buy e-SAF from producers under contracts of up to 15 years, awarded through a competitive auction. It would then sell the fuel to aviation fuel suppliers in a second auction under shorter contracts, for example of 3-5 years, the government said in an impact assessment. Purchase prices could be linked to power prices.

E-SAF made using renewable or low-carbon electrolytic hydrogen would be eligible, allowing projects powered by nuclear generation to compete.

The scheme is intended to give producers the long-term certainty needed to take final investment decisions, the government said this week. France is the latest member of the EU's eSAF Early Movers Coalition to plan a double-sided auction. Germany, Austria and Luxembourg recently confirmed plans to launch their own.

The appointed body would be barred from having more than 160,000t under contract in any year. This would be enough to meet France's e-SAF requirement under the EU's ReFuelEU Aviation rules until 2034, the assessment said. ReFuelEU requires a 2pc e-SAF share in 2032-34 and 5pc from 2035.

Any shortfall between the body's purchase costs and resale revenue would first be covered by earlier surpluses, followed by revenue from ReFuelEU fines and finally a new charge on fossil jet fuel suppliers.

The government expects the scheme to earn about €200mn ($225mn) in 2030-33, before losing €500mn-1.2bn in 2034-40, depending on prices. It estimates a net cost of about €650mn over 10 years.

This suggests the government expects fuel suppliers initially to pay a premium for scarce e-SAF when the ReFuelEU requirement starts in 2030, as they face fines and must make up any shortfall in later years. Resale prices could subsequently fall below the body's fixed purchase prices as supply grows and the first resale contracts expire.

The government estimates the cost of producing e-SAF at the first plants at €4,000-7,000/t, compared with €600-1,000/t for conventional jet fuel and around €2,000/t for bio-SAF.

The 160,000 t/yr cap is equivalent to the output of two large projects representing nearly €3bn of private investment, industry body France Hydrogene said. France has 12 e-SAF projects that could become operational in 2030-35, with combined production capacity of more than 800,000 t/yr, 3.4GW of electrolysis and over €14bn of potential investment, it said.

The budget bill also confirms €1.2bn ($1.35bn) for the second round of subsidies targeting 250MW of electrolysis capacity. This is equivalent to about €4.8mn/MW, in line with the €778mn recently awarded to 161MW in the first round.

The bill must still pass parliament, while the e-SAF double-sided auction scheme requires European Commission state aid approval before it can start.

By Chingis Idrissov

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05/10/26

Germany weighs maritime GHG loophole closure

Hamburg, 5 October (Argus) — The German ministry for the environment, climate action, nature conservation and nuclear safety (BMUKN) is examining various options for closing the so-called maritime loophole. The market has already reacted, with German renewable fuel tickets generated through the maritime loophole now being priced at wider discounts, reflecting increased concerns over potential invalidation. The ministry confirmed to Argus that it is assessing relevant options. No draft proposal currently exists, nor is there a timetable for a possible amendment. The ministry also pointed out that the federal government is already empowered to exclude renewable energy carriers used outside land-based transport from counting towards the Greenhouse Gas Reduction Quota (GHG quota). This authority was introduced through the Second Act on the Further Development of GHG quota. The legislator justified the measure on the grounds that "negative effects on the GHG quota market" should be prevented where they arise "from the use of renewable energy products outside land-based transport — for example in maritime transport". The existing regulation gap allows renewable fuel tickets to be generated for road fuels that are ultimately used in maritime transport. Under article 52 of Germany's energy tax law (EnergieStG), the volumes are initially taxed voluntarily as road transport fuel, making them eligible for compliance under the GHG quota system pursuant to the Federal Immission Control Act. The energy tax paid can subsequently be reclaimed once the fuel has been used in the maritime sector, while the generated renewable fuel tickets remain valid. Market participants said the regulation gap can be used with various biofuels, although advanced B100 biodiesel and bio-LNG are currently the most relevant. According to market participants, the regulation gap is being utilised by established companies in the fuel sector and by specialist firms whose business model is based on the marketing of such renewable fuel tickets. Market participants said the prospect of regulatory changes is already affecting the valuation of the corresponding renewable fuel tickets. Renewable fuel tickets for the category Other current compliance year that were generated through this mechanism are now being traded at discounts of around €40/tCO2e. Previously, discounts had been around €20/tCO2e. Market participants attributed the widening discount to recent discussions about a possible closure of the regulation gap by the BMUKN and resulting concerns over the potential invalidation of affected volumes. At the same time, several market participants considered the retrospective invalidation of previously transferred or already submitted renewable fuel tickets unlikely. Instead, uncertainty relates primarily to the future eligibility of such volumes should the regulation gap be closed. Some buyers have also introduced contractual provisions, excluding the transfer of renewable fuel tickets generated through the loophole to avoid potential regulatory risks. By Ricco Schalamon and Marcel Rothenstein Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Air, sea sustainable fuel tipping points still far off

02/10/26

Air, sea sustainable fuel tipping points still far off

Strong global policy is needed to change sustainable shipping fuel economics, writes Michael Ball Washington, 2 October (Argus) — Significant work remains to transition the world away from fossil fuel in aviation and shipping, despite repeated support pledged at UN climate talks. The need to ramp up the use of alternative fuels will be a focus of the UN's Cop 31 climate summit next month in Antalya, Turkey. The host wants countries to join a new pledge to boost electricity to 35pc of all global final energy consumption by 2035, up from about 20pc currently. Last year's host, Brazil, has its own initiative to quadruple global output and use of sustainable fuels, including biofuels, by 2035. And past Cops have produced other pledges to reduce emissions in aviation or shipping. But alternative fuels have not yet reached their tipping point, accounting for less than 1pc of the fuel used in aviation or shipping globally. Cost and politics remain two of the major roadblocks. The sustainable aviation fuel (SAF) industry has shown signs of growth. Major fuel users, including Delta Airlines and FedEx, have recently extended and expanded SAF offtake agreements . And production is on the rise. For example, Neste, the leading producer of SAF, currently has production capacity of 1.5mn t/yr, which it plans to grow to 2.2mn t/yr in 2027, or about 750mn USG. But SAF still makes up a small, but growing, sliver of fuel use. Suppliers in the EU blended nearly 3pc into jet fuel last year , surpassing the bloc's 2pc mandate in its first year. In the US, SAF accounts for roughly 1pc of jet fuel supply, although the US EIA expects that to soon reach about 2pc. Global production this year is set to exceed 790mn USG, up by 26pc on the year, according to the International Air Transport Association. The story is similar in shipping. Globally, ships of at least 5,000 gross tonnage used more than 223mn t of fuel oil in 2024, about 92.5pc of which came from heavy fuel oil, light fuel oil or diesel, according to International Maritime Organization (IMO) data. Only about 0.8pc came from "other" fuels, despite biofuels jumping to more than 1.2mn t from less than 400,000t in 2023. But the slow pace of fleet turnover, and the need for more engines that can use alternatives, means that the course the industry plots over the next few years could determine whether it can meet the IMO's goal of net zero emissions by 2050, according to a recent report from the Global Centre for Maritime Decarbonisation (GCMD). Cost calculations Cost remains a major hurdle to greater SAF use in aviation and shipping. SAF can reduce emissions under the International Civil Aviation Organisation's Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) system, which seeks to offset any growth in aviation CO2 above 85pc of 2019 levels. But using Corsia carbon offsets currently costs significantly less. Argus assessed Corsia phase 1 credits at $12.45/t this week, compared with an abatement cost as high as $310/t for the US west coast. In other parts of the world , the cost of abating 1t of CO2 equivalent in emissions by using SAF instead of jet fuel is even higher. In shipping, GCMD says strong global policy is needed to change the economics of sustainable fuels, as national and sub-national efforts will fall short. At the top of the list is the IMO-proposed carbon pricing system, the adoption of which was delayed last year in the face of US opposition. IMO pledged to try again this year. The agency will meet next month to consider next steps toward achieving its greenhouse gas emissions goals. "Achieving a price signal of this magnitude will be challenging, but without it, the economics are unlikely to support the transition to new fuels at scale," the GCMD said. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

India's Bihar state approves green hydrogen policy

01/10/26

India's Bihar state approves green hydrogen policy

New Delhi, 1 October (Argus) — India's eastern state of Bihar has approved its green hydrogen policy, aiming to produce 100,000 t/yr of renewable hydrogen by 2031. The move formalises a framework first released in draft form in April. The state cabinet approved the policy on 30 September which aims to support deployment of 1GW of electrolyser capacity and 2.5GW of renewable energy capacity dedicated to hydrogen and ammonia production. The state estimates the policy could attract around 160bn Indian rupees ($1.66bn) of investment. Under the policy, electrolysis-based hydrogen projects will be eligible for reimbursement of 10pc of capital expenditure, capped at Rs10mn/MW, while biomass-based hydrogen projects will also qualify for capital support. Incentives are also available for hydrogen refuelling stations and hydrogen-powered transport. Projects will receive exemptions from electricity duty, state goods and services tax, transmission and wheeling charges, stamp duty and land conversion fees. The state also plans to introduce a single-window clearance mechanism and fast-track approvals for environmental permits, grid connectivity and open-access arrangements. The policy identifies fertiliser and refinery sectors as initial demand centres for renewable hydrogen, while also targeting future use in chemicals, steel, heavy transport, energy storage and city gas distribution. Infrastructure development, including pipelines and industrial clusters near consumption centres, is also planned. The target of 100,000 t/yr may be ambitious given that Bihar is not currently home to any advanced renewable hydrogen or ammonia project plans. By Anmol Choubey Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Brasil avança em marco para bunker alternativo

30/09/26

Brasil avança em marco para bunker alternativo

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US renewable feedstocks demand sets another record

30/09/26

US renewable feedstocks demand sets another record

Houston, 30 September (Argus) — US renewable feedstocks demand for biofuels production rose to a fresh record in July on surging consumption of soybean oil and distillers corn oil, according to US Energy Information Administration (EIA) data released today. More than 4.05bn lb of renewable feedstocks were used to make biodiesel, renewable diesel and sustainable aviation fuel in July, up from the prior record of nearly 3.87bn lb in June and up from just under 2.99bn lb a year earlier. July's daily demand of 130.6mn lb/d was 35pc greater than the 96.5mn lb/d usage rate in July 2025. Soybean oil consumption again accounted for most of July's gains, with demand rising by 52pc on the year to 1.69bn lb, or 54.4mn lb/d. Canola oil usage rose by 51pc from a year earlier to 330mn lb, or 10.6mn lb/d. Total waste feedstocks usage held above year-earlier levels, but beef tallow consumption by biofuel plants fell by 6.8pc on the year to 24.9mn lb/d in July. Demand for yellow grease, a category that includes used cooking oil, increased to 19.7mn lb/d, up by 45pc from a year earlier. White grease consumption in July rose on the year by 6.8pc to 1.52mn lb/d. US biofuel producers consumed 14.6mn lb/d of distillers corn oil in July, up by 22pc from 12mn lb/d a year earlier. inventories of US biodiesel and renewable diesel fell by 8.3pc from a year earlier to 8.4mn bl. Production capacity for renewable diesel and other biofuels rose in July by 4.8pc from year-earlier levels to about 4.97bn USG/yr. By Thompson Corpus Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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