Spain joins growing European push for eSAF as Iran crisis exposes fossil-fuel vulnerability

Geopolitical oil premium costs passengers up to 88 euros (USD$102) per long-haul flight, 29 times more than ReFuelEU compliance.

A broad coalition of over 21 companies, trade associations and industry bodies has written jointly to the Spanish government and ministers calling on Spain to translate its membership of the eSAF Early Movers Coalition into a concrete financial commitment before the EU Transport Council in June.

The letter, coordinated by T&E Spain (T&E España), brings together the full Spanish eSAF value chain—from airlines and aircraft manufacturers to renewable energy producers and industrial developers—in an unusually unified call for public support.

The signatories—Spanish Airlines Association (ALA), Airbus, Moeve, AELEC and RIC Energy, among many others—are calling on the Spanish government to mobilize a concrete budgetary contribution to the first European eSAF pilot auction, structured as a two-sided mechanism operated by a publicly backed market intermediary, in line with the H2 Global model already endorsed by the European Commission’s Sustainable Transport Investment Plan.

The Iran crisis: Fossil-fuel dependency, not climate policy, is aviation’s biggest risk

The 2026 Middle East crisis has laid bare the structural vulnerability of European aviation to fossil-fuel dependence.

According to T&E analysis, the EU imports around 95 percent of its crude oil, and approximately 30 percent of total European jet fuel supply—including both crude refined within the EU and directly imported refined jet fuel—depends on routes passing through the Strait of Hormuz.

The partial disruption of that corridor was enough to push benchmark jet-fuel prices to more than double their preconflict levels, prompt Lufthansa to cut 20,000 flights through the autumn, and lead the head of the International Energy Agency, Fatih Birol, to warn that Europe had “maybe six weeks or so” of jet-fuel reserves remaining.

The scale of the cost contrast is striking.

For an average intra-European flight, the geopolitical premium on fossil fuels currently adds 29 euros (USD$34) to per-passenger fuel costs—while the ReFuelEU mandate adds just 70 euro cents (81 U.S. cents) in the same period.

On long-haul routes, which account for the bulk of aviation’s emissions and remain entirely outside the scope of carbon markets, the gap widens dramatically: the fossil fuel penalty reaches 88 euros (USD$102) per passenger, against just 3 euros (USD$3.50) from ReFuelEU.

The oil-market insecurity penalty is therefore up to 41 times larger than the cost of European climate policies on short-haul, and 29 times larger on long-haul.

“The Iran crisis is the clearest possible demonstration that aviation’s problem is not climate regulation—it is its oil dependency,” said Ioan Bucuras, T&E Spain’s deputy director. “Every euro invested in eSAF today is an insurance policy against future energy shocks, and a bet on European industrial sovereignty.”

3 barriers, 1 solution

The letter identifies three specific obstacles blocking private investment in industrial-scale eSAF plants: uncertainty over long-term revenue and offtake contracts, the technology risk inherent in first-of-a-kind projects, and the mismatch between the 25- to 30-year asset life of eSAF plants and the limited willingness of buyers to commit to offtake agreements at that duration.

To break this deadlock, the signatories propose a two-sided auction mechanism operated by a publicly backed intermediary, positioned between producers and buyers, that would offer developers long-term purchase agreements with predictable revenues while providing airlines with competitively priced supply.

This structure, modelled on H2 Global and referenced in the European Commission’s STIP, would absorb the risk mismatch that currently prevents investment decisions from being taken.

Spain’s participation in the eSAF Early Movers Coalition sends an important political signal.

But signatories warn that political commitment must now be followed by financial commitment.

Germany has confirmed a contribution of up to 2-billion euros (USD$2.33 billion) to launch an eSAF auction by early 2027 through H2 Global.

Luxembourg has also signaled its intention to contribute, and Portugal is actively discussing its participation.

Spain, the letter argues, must now move from coalition membership to budget allocation, and do so before the EU Transport Council June 26.

“Spain already has industrial eSAF projects at various stages of development, and committed actors across the entire value chain,” Bucuras said. “The June Council is the window. If Spain is not at the table when the pilot auction budget is decided, Spanish projects will be left out.”

What the coalition is asking for

The signatories call on the Spanish government to:

• Actively participate in the European Commission taskforce designing the joint eSAF pilot auction, ensuring that its architecture benefits projects and buyers based in Spain.

• Define and mobilize a concrete financial contribution before the EU Transport Council June 26, drawing on Recovery and Resilience Facility funds and Emissions Trading System revenues.

• Ensure effective interministerial coordination to unlock the necessary financing at EU level.

• Designing industrial policy to ensure competitive, predictable and stabilized grid-electricity costs.

Spain has already reserved one third of the 415-million euros (USD$482.5 million) allocated under the European Hydrogen Bank’s “auctions-as-a-service” scheme for projects serving the maritime and aviation sectors, a signal of intent that the signatories argue must now be backed by direct participation in the European eSAF auction mechanism.