European Commission approves 290-million-euro Dutch state aid to support SAF

The European Commission announced July 30 that it has approved, under EU state-aid rules, two Dutch schemes with a combined budget of 290-million euros (USD$334.2 million) to support sustainable aviation fuel (SAF).

The schemes will contribute to the objectives of the Clean Industrial Deal to accelerate the decarbonization of EU industry, as well as of the ReFuelEU aviation regulation to boost the supply and demand of SAF and accelerate the transition to climate-neutral aviation.

The Dutch schemes

The Netherlands notified the commission of its intention to introduce two schemes to support projects that produce SAF at different stages of their development.

Although the schemes share a common budget, one provides investment aid for SAF production while the other covers the costs of preparatory works for SAF projects including front-end engineering design (FEED) studies.

The approved schemes will support projects estimated to produce around 285,000 metric tons of SAF per year, the equivalent of 350 million liters (92.46 million gallons) of kerosene, or around 3,500 intercontinental flights.

The aid will be awarded on a first-come-first-served basis through schemes that are objective, nondiscriminatory and transparent.

The schemes will provide support to two promising technology pathways: advanced biobased SAF not produced through the hydroprocessed esters and fatty acids process (non-HEFA advanced bio-SAF), and synthetic aviation fuels (eSAF).

The Netherlands believes that supporting these two types of SAF now will assist their commercial development, fostering technological diversity in the future.

Under the schemes, the aid will take the form of direct grants payable upon the completion of project milestones.

The schemes will cover the period from 2027 until 2031 at the latest.

Up to five rounds of funding will take place during this period, depending on the available funding.

Beneficiaries of the scheme dedicated to support SAF production will have to prove compliance with the EU criteria for the production of renewable fuels of nonbiological origin (RFNBO) or the EU sustainability criteria for advanced biofuels.

The commission’s assessment

The commission assessed the schemes under EU state-aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which enables member states to support the development of certain economic activities under certain conditions, the 2022 guidelines on state aid for climate, environmental protection and energy (CEEAG), and the 2025 Clean Industrial Deal State aid Framework (CISAF).

In particular, the commission found that:

• The schemes are necessary and appropriate to facilitate the production of SAF.

• The schemes have an incentive effect, as the beneficiaries would not carry out the relevant studies and investments without the public support.

• The Netherlands put in place sufficient safeguards to ensure that the schemes have a limited impact on competition and trade within the EU.

• Proportionality will be ensured through the application of the aid intensities applicable to the eligible costs that are set out in the relevant sections of the CISAF and CEEAG.

• The aid will bring about positive effects, in particular on the environment, contributing to the Clean Industrial Deal objectives.

On this basis, the commission approved the Dutch schemes under EU state-aid rules.

Background

The 2025 CISAF is the European Commission’s temporary state-aid rulebook designed to let member states support investment in clean energy, industrial decarbonization and clean-technology manufacturing more quickly while safeguarding fair competition in the single market.

The commission’s 2022 CEEAG provide guidance on how the commission assesses the compatibility of environmental protection, including climate protection, and energy-aid measures that are subject to the notification requirement under Article 107(3)(c) TFEU.

The Renewable Energy Directive of 2018 set out stringent criteria for advanced biofuels, such as advanced bio-SAF, and renewable fuels of nonbiological origin, such as eSAF.

These rules ensure that their environmental impact is minimal, including by requiring the greenhouse-gas emission savings of end products to exceed certain thresholds across the entire value chain.

Amendments to the Renewable Energy Directive in 2023 increased the EU target for the share of renewable energy in the EU’s gross energy consumption to a minimum of 42.5 percent by 2030, with the aim of reaching 45 percent, and introduced a target that 42 percent of the hydrogen used in industry should be renewable by 2030, increasing to 60 percent by 2035.