Why Spain and Europe Are Betting Big on Synthetic Aviation Fuel Amid Oil Shocks
With the Iran crisis exposing the fragility of fossil fuel supplies, a powerful coalition of more than 21 Spanish companies, trade associations, and industry bodies is urging Madrid to translate political support into concrete economic incentives for synthetic sustainable aviation fuel (SAF). Ahead of the June EU Transport Council, the group argues that the geopolitical oil premium already adds up to €88 per long-haul flight for passengers — a cost 29 times higher than what ReFuelEU compliance would impose. This Q&A breaks down the key issues, the coalition's demands, and why this push matters for Europe's energy independence.
1. What Exactly Does the Spanish Coalition Want from the Government?
The coalition — a broad alliance representing airlines, fuel producers, environmental NGOs, and airport operators — is calling on Madrid to back its political commitment to sustainable aviation with a concrete economic framework. Specifically, they want Spain to adopt national measures that accelerate the production and uptake of synthetic SAF (also known as e-fuels). Their request comes ahead of the June EU Transport Council, where member states will discuss how to implement ReFuelEU, the bloc's mandate for increasing SAF use. The coalition stresses that without dedicated financial support — such as production subsidies, tax breaks, or investment guarantees — Spain risks falling behind other European nations. They argue that the country has huge renewable energy potential (solar, wind) that could power cost-competitive synthetic SAF plants, turning a vulnerability into a strategic advantage.
2. How Does the Iran Crisis Highlight the Need for Synthetic SAF?
The ongoing Iran crisis has sent shockwaves through global oil markets, driving up jet fuel prices and exposing the aviation sector's dangerous dependence on geopolitically unstable regions. Synthetic SAF, produced from renewable electricity and captured CO₂, offers a decoupled supply chain — not subject to the whims of OPEC+ or Middle Eastern conflicts. The coalition points out that every long-haul flight currently carries a hidden "geopolitical premium" of up to €88 per passenger, reflecting the extra cost of oil price volatility. By investing in homegrown synthetic SAF, Spain can insulate its aviation industry from such shocks, improve energy security, and create local green jobs. The crisis has thus become a powerful argument for moving from political declarations to real economic action.
3. What Is the Cost Comparison Between the Oil Premium and ReFuelEU Compliance?
According to the coalition's analysis, the current geopolitical oil premium adds approximately €88 to the cost of a long-haul flight per passenger. In contrast, complying with the ReFuelEU mandate — which requires 2% SAF blending by 2025, rising to 70% by 2050 — would cost only about €3 per passenger for the same flight. That means the oil volatility premium is a staggering 29 times higher than the compliance cost. The coalition uses this stark comparison to argue that transitioning to synthetic SAF is not only an environmental imperative but also an economic no-brainer. They emphasize that the upfront investment in production capacity will be quickly offset by reduced exposure to oil price spikes, making the switch financially rational even without considering climate benefits.
4. What Role Does ReFuelEU Play in Driving Synthetic SAF Adoption?
ReFuelEU is the European Union's landmark regulation that mandates a gradual increase in the share of sustainable aviation fuels blended with kerosene. It sets binding targets for fuel suppliers at EU airports: starting at 2% in 2025, climbing to 6% in 2030, 20% in 2035, and finally 70% in 2050. Critically, it includes a sub-target for synthetic SAF (e-fuels) — a dedicated 1.2% by 2030, rising to 35% by 2050. This creates a guaranteed market for producers. The Spanish coalition wants Madrid to use the June Council to push for stronger EU-level incentives — like a dedicated innovation fund or a contracts-for-difference scheme — to de-risk first-of-a-kind plants. Without such mechanisms, ReFuelEU targets may remain aspirational.
5. Which Spanish Organizations Are Leading This Push?
The coalition is unusually broad, encompassing over 21 entities spanning the entire aviation value chain. Key members include the airline association ALA, the Spanish Association of Renewable Energy Producers (APPA), the main oil and gas companies operating in Spain (Repsol, Cepsa), airport operator Aena, and environmental groups like Ecologistas en Acción. Also on board are technology providers, research institutes, and regional development agencies. This diversity signals that the call for synthetic SAF is not a niche interest but a mainstream consensus among industry, environmentalists, and infrastructure managers. They have collectively signed a letter to the Minister of Transport, Mobility and Urban Agenda, urging the government to present a national roadmap with clear milestones and budget lines before the June Council.
6. What Are the Main Challenges to Scaling Up Synthetic SAF in Spain?
Despite Spain's abundant sun and wind — ideal for producing cheap renewable electricity needed for synthetic SAF — several hurdles remain. The primary challenge is cost: synthetic SAF currently costs 3–6 times more than conventional jet fuel, though prices are expected to fall with scale and learning. A second barrier is the lack of dedicated infrastructure: existing refineries need retrofitting, and new e-fuel plants require significant capital. Third, there is policy uncertainty: investors need long-term certainty about subsidies and mandates to commit billions. The coalition is pushing for national measures like a green premium auction or a quota obligation extended to fuel suppliers, complementing ReFuelEU. Finally, certification schemes for synthetic SAF are still evolving, creating administrative bottlenecks. Overcoming these hurdles will require coordinated action from Madrid, Brussels, and industry.
7. How Does This Spanish Push Fit into the Wider European Trend?
Spain is far from alone. Across Europe, countries like Germany, France, the Netherlands, and Sweden have already announced national strategies or dedicated funds for synthetic SAF. Germany, for example, has allocated €1.6 billion for "Power-to-Liquid" pilot plants, while France requires 1% synthetic SAF in its domestic mandate from 2025. The Spanish coalition explicitly cites these examples to argue that Madrid must act now to avoid being left behind. At the EU level, the European Parliament and Council are debating the inclusion of a specific synthetic SAF sub-target in the revised Energy Taxation Directive. Spain's stance at the June Transport Council could therefore influence the final shape of EU policy. The broad, cross-sectoral support in Spain — from green groups to fossil fuel incumbents — makes its push particularly noteworthy and potentially influential.
8. What Is the Expected Outcome of the June EU Transport Council?
The June EU Transport Council will bring together ministers from all member states to discuss the implementation of ReFuelEU and related aviation decarbonization policies. The Spanish coalition hopes that Madrid will use the meeting to present a national action plan for synthetic SAF, including specific funding commitments and a timeline for certifying new production capacity. At the EU level, ministers will negotiate the final shape of the Alternative Fuels Infrastructure Regulation and the revision of the Energy Taxation Directive, both of which impact synthetic SAF economics. A strong, unified push from Spain and other like-minded countries could result in a Council conclusion that calls for a European Synthetic Aviation Fuel Alliance modeled on similar alliances for batteries and hydrogen. If successful, the June Council could mark a turning point from ambition to concrete action.