European Union rules meant to accelerate the shift to cleaner aviation fuel may be doing the opposite — steering producers toward pathways that cost more, consume more electricity, and make less efficient use of limited resources.
That is the central finding of a new study from Chalmers University of Technology in Sweden, published as Europe moves to scale up domestic production of fossil-free aviation fuel amid rising geopolitical pressure on global oil markets.
What the EU Currently Requires
Under EU rules that took effect last year, aviation fuel suppliers must ensure that at least 2 percent of fuel supplied at EU airports qualifies as sustainable aviation fuel, or SAF. That share rises to 70 percent by 2050. Half of that volume must come from renewable fuels of non-biological origin — known as RFNBOs — synthetic fuels made by combining renewable hydrogen with captured carbon dioxide.
Fuel producers who fail to meet the quotas face financial penalties.
Researchers analysed three production pathways for synthetic methanol — a fuel molecule that can be converted into aviation fuel. Two relied on burning biomass and capturing the resulting carbon dioxide from flue gases. The third used biomass gasification, a process that converts heated biomass directly into a synthesis gas containing both carbon and hydrogen.
The gasification route outperformed both alternatives on every key measure.
“The gasification pathway proved to be the most resource-efficient option in our analysis, with up to 46 percent lower production cost and 30 percent lower electricity demand than the two combustion-based alternatives,” said Johanna Beiron, a researcher in Physical Resource Theory at Chalmers and lead author of the study.
Regulatory Problem
Despite its advantages, gasification largely does not qualify under EU RFNBO rules. The regulation requires that carbon used in synthetic fuel production must come as a by-product of burning biomass for another purpose — such as generating heat or electricity — not directly from the gasification process itself.
That distinction means the more efficient technology is effectively penalised.
“Regulations influence not only industry’s investments in technology, but also which research and development priorities are pursued,” said Henrik Thunman, professor of energy technology at Chalmers and co-author of the study. “Instead of driving innovation towards the most efficient solutions, we risk locking ourselves into less resource-efficient production methods.”
The study identifies a direct conflict between the RFNBO rules and separate EU directives. The EU’s energy efficiency directive states that efficiency should guide major energy investment decisions. The waste hierarchy principle calls for minimising waste generation. The researchers argue that RFNBO rules undercut both.
Under the current rules, the financial value of carbon dioxide as an RFNBO feedstock could exceed the value of the energy in biomass itself. That creates a perverse incentive — producers may find it more profitable to burn biomass purely to generate CO2 for fuel synthesis, rather than use the energy it contains.
Beiron called it “surprising” that the regulations did not push harder toward the most efficient technologies.
Investment Risk
The regulatory inconsistency carries a direct economic cost beyond fuel production. Investors building large, long-term plants face the prospect that one of the conflicting rules will eventually change — potentially stranding assets built to comply with the regulation that loses out.
“Better coordination is needed between climate targets, resource efficiency, and industrial feasibility,” Thunman said. “The current uncertainty makes it difficult to make rational investment decisions for the large-scale expansion of sustainable aviation fuels in the coming years.”
The researchers called for a review of the SAF policy landscape to align regulations and reduce investment risk before the next wave of production plants is built. At the pace the EU has set, that window is closing.
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