Germany, Austria, and Luxembourg launch €2.1 billion eSAF scheme

Germany, Austria, and Luxembourg have launched a €2.1 billion joint initiative to accelerate the market for electricity-based sustainable aviation fuel (eSAF). The program utilizes a “double-sided” auction mechanism designed to bridge the price gap between production costs and market demand.

Under this scheme, producers compete to sell at the lowest price while airlines and operators bid to secure supply. An intermediary manages long-term contracts with producers and shorter agreements with buyers, using public funds to cover the difference between manufacturing costs and what the market is willing to pay. This structure aims to provide the revenue certainty necessary to unlock large-scale investments in power-to-liquid plants.

Germany is providing the majority of the funding with €2 billion, while Austria and Luxembourg are each contributing €60 million. The subsidized fuel quantities will be distributed in proportion to each nation's financial contribution. German Federal Minister of Transport Steffen Bilger noted that the initiative serves both climate and industrial policy by fostering European expertise, job creation, and energy independence.