Study on the potential effectiveness
of a renewable energy obligation for
aviation in the Netherlands
Final report

E4tech (UK) Ltd and studio Gear Up
for Ministerie van Infrastructuur en Waterstaat
December 2019

E4tech (UK) Ltd

Incorporated in England and Wales

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London SW1H 0HW
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Tel: +44 20 3008 6140
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www.e4tech.com

Contents
Glossary ............................................................................................................................................................. 1
1

Executive Summary ................................................................................................................................... 2

2

Managementsamenvatting ....................................................................................................................... 6

3

Introduction ............................................................................................................................................. 11
3.1

Context........................................................................................................................................................ 11

3.2

Objectives of this study ............................................................................................................................... 12

4

Legal framework ...................................................................................................................................... 13
4.1

International ............................................................................................................................................... 14

4.2

EU ................................................................................................................................................................ 17

4.3

National....................................................................................................................................................... 22

4.4

Conclusions ................................................................................................................................................. 24

5

Choice of policy mechanism .................................................................................................................... 25
5.1

Aims of the policy ....................................................................................................................................... 25

5.2

Supply-side measures ................................................................................................................................. 26

5.3

Demand-side measures .............................................................................................................................. 27

5.4

A blending obligation .................................................................................................................................. 31

5.5

Conclusions ................................................................................................................................................. 47

6

Supplying a SAF obligation ...................................................................................................................... 48

7

Sustainability requirements .................................................................................................................... 67
7.1

Introduction ................................................................................................................................................ 67

7.2

Crop-based fuels ......................................................................................................................................... 68

7.3

Waste oils-based fuels ................................................................................................................................ 71

7.4

Advanced fuels ............................................................................................................................................ 71

7.5

Sustainability criteria and certification ....................................................................................................... 74

7.6

Reducing the risk of fraud ........................................................................................................................... 80

8

Promoting SAF production in the Netherlands ....................................................................................... 82
8.1

Planned SAF production in the Netherlands ............................................................................................... 82

8.2

Policy choices to support production in the Netherlands .......................................................................... 83

8.3

Economic opportunities from SAF production ........................................................................................... 85

9

Economic impacts .................................................................................................................................... 87
9.1

Direct economic impacts of an obligation .................................................................................................. 87

9.2

Impact on competitiveness of airlines and airports ................................................................................... 93

9.3

Costs to government ................................................................................................................................... 97

10

SAF supply logistics ............................................................................................................................... 98

10.1

Introduction ................................................................................................................................................ 98

10.2

Current and future supply logistics ............................................................................................................. 98

11

Conclusions ......................................................................................................................................... 100
.................................................................................................................................................... 104

Renewable energy obligation for aviation in the Netherlands

Glossary
2DS
APR
AtJ
B2DS
CAAFI
CORSIA
DSHC
ETS
FAME
FT
GHG
HDO
HEFA
HFP
HTL
HVO
IATA
ICAO
IEA
ILUC
LCFS
MSW
NDC
PtL
PV
RED
RTFO
SAF
SIP
SPK

2-Degree Scenario
Aqueous Phase Reforming
Alcohol to jet
Below 2-Degrees Scenario
Commercial Aviation Alternative Fuels Initiative
Carbon offsetting and reduction scheme for international aviation
Direct sugars to hydrocarbons
Emission Trading Scheme
Fatty acid methyl esters
Fischer-Tropsch
Greenhouse gas
Hydro-deoxygenation
Hydro-processed esters and fatty acids
High Freeze Point
Hydrothermal liquefaction
Hydrotreated vegetable oil
International Air Transport Association
International Civil Aviation Organisation
International Energy Agency
Indirect Land Use Change
Low-Carbon Fuel Standard
Municipal solid waste
Nationally Determined Contribution
Power-to-liquids
Photovoltaic
Renewable Energy Directive
Renewable Transport Fuel Obligation
Sustainable aviation fuel
Synthetic iso-paraffinic kerosene
Synthetic paraffinic kerosene

1

Renewable energy obligation for aviation in the Netherlands

1 Executive Summary
Reducing emissions from aviation is an important policy aim for the Netherlands
The need to tackle climate change will require deep emissions reduction in all sectors of the economy
including air travel. As aviation is an international sector, international approaches to emissions
reduction are preferable, to avoid emissions leakage 1 , and ensure a level playing field between
different countries and airlines. The International Civil Aviation Organization (ICAO) is developing the
agreement for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which
will aim to encourage sustainable aviation fuels as well as obliging participating parties to reduce
emissions through offsetting. However, if this does not provide a strong enough driver for sustainable
aviation fuel uptake, additional measures will be required at European and/or national level.
For the Netherlands, international aviation is an important sector of the economy, as the share of
aviation traffic and fuel consumption within the transport sector is high compared with other EU
Member States. For the Netherlands it is particularly important to find innovative solutions to address
the climate impacts of international aviation, whilst not undermining the important economic
contribution from the aviation sector. In February 2019, a Draft Sustainable Aviation Agreement was
adopted at the Sustainable Aviation Roundtable, which committed to a target of at least 14% of the
aviation fuel bunkered in the Netherlands in 2030 being sustainable.
This study assesses the potential effectiveness of a renewable energy obligation for aviation
Following this Agreement, the Ministry of Infrastructure and Water Management commissioned this
study to assess the potential effectiveness of a renewable energy obligation for aviation in the
Netherlands. The report considers whether the introduction of an annual renewable energy obligation
for aviation would be an effective way to stimulate the production and consumption of sustainable
aviation fuel (SAF), with a view to achieving the objective of a minimum of 14% sustainable aviation
fuel in the Netherlands by 2030. It also discusses the preconditions for and risks of introducing an
obligation. To assess this, we have undertaken analysis and stakeholder interviews, covering six key
areas: legal framework, choice of policy mechanism, supply options, sustainability, promoting
production in the Netherlands, economic impacts and logistics.
Sustainable aviation fuel policy is evolving rapidly at international, EU and national level. EU policy
places some restrictions on the fuels that could be supported under EU or Dutch policies
Review of international, EU and national policies shows that:
•
•

1

Interaction of international policies and regional and national policies related to SAF are still
under discussion, but do not appear to present a barrier to a SAF obligation in the Netherlands.
European policy requires that obligations or financial support for biofuels follow the
sustainability criteria set out in the Renewable Energy Directive (RED II), even if the fuels are
not counted towards RED II targets. State Aid rules are also important: these limit the options
for support of food and feed crop-based biofuels, and allow additional support alongside an
obligation only for fuels with high costs and where competitive impacts can be avoided.

Increase of emissions in other sectors or geographies

2

Renewable energy obligation for aviation in the Netherlands
Compared with other policy measures, a blending obligation in the Netherlands would provide the
highest level of assurance that a 14% target would be met
•

•

•

An EU-wide obligation would reduce competitive distortion and carbon leakage, however it is
likely to be challenging to secure MS-wide agreement and therefore unlikely to be
implemented in the short-term. As a result, this report focuses on the design of a Netherlands
SAF obligation.
A blending obligation provides the highest level of assurance that the 14% target will be met,
and is also the only option possible if food and feed crop-based biofuels were to be supported.
Practically, there are no substantial barriers to implementing a blending obligation. However,
additional policies to mitigate cost impacts would be limited to certain fuels by State Aid rules.
Supply or demand side policy support could be used as well as, or instead of an obligation. A
payment for SAF use could be constructed to give reasonable level of confidence of the target
being met, with an advantage of this option being the ability to split the costs of compliance
between industry and government if desired.

The obligation would be likely to be met through SAF derived from oils, as other routes are at an
earlier stage of commercialisation, and have higher costs
•

•

•

There are many routes to produce SAF, six of which are already certified for blending with
fossil jet fuel, generally at up to 50%. However, only hydroprocessing of oils/fats (HEFA) is at
commercial stage today. SAF can be supplied to airports through existing infrastructure, with
minimal additional handling costs.
Overall, the HEFA route is the most feasible option to meet the obligation, but could have
feedstock constraints if demand grows fast in other markets. For example, if a 14% obligation
in the Netherlands, equivalent to around 700kt of SAF in 2030, was supplied entirely through
HEFA from waste oils and fats alone, this would require around 18% of the EU potential
resource, for which there is also growing demand from the road transport sector.
For routes from lignocellulosic feedstocks and for power to liquids, even supplying all of 2030
SAF demand in the Netherlands would lead to feedstock requirements that are very small
compared with the EU resource potential. However, these are at the demonstration/early
commercial stage, and so there is more uncertainty over their contribution by 2030.

Decisions are needed on the sustainability of feedstocks and support to advanced biofuels and power
to liquids, which will have a large effect on the design of an obligation, and interact with policy in
other sectors
Ensuring the sustainability of SAF is very important to all stakeholders, in terms of preventing use of
unsustainable fuels in the near term, and encouraging greater levels of SAF supply in the future.
•

•
•

The extent to which biofuels based on food and feed crops could contribute towards SAF
supply is a key option for policy, with widely differing views amongst stakeholders. This will
need to be agreed in conjunction with Netherlands policymaking on biofuels in other sectors
Waste oils are considered as the main near-term route to SAF, but have limited resources.
Whether or not to limit their use should be agreed alongside policymaking in other sectors.
Incentivising advanced biofuels and renewable electricity (through a sub-target, additional
support, or preferably both) is widely supported to increase the sustainable feedstock base
and so the potential for SAF supply.
3

Renewable energy obligation for aviation in the Netherlands
All biofuels will need to meet RED II sustainability criteria, which cover areas including GHG savings,
land use, biodiversity, and forest carbon stocks. Clarification of detailed rules for factors such as coprocessing, Annex IX feedstocks and additionality of renewable electricity is needed as soon as possible
to enable investment.
Although an obligation could not favour production in the Netherlands, an obligation would be likely
to further promote interest in SAF production
•

•

There are planned SAF plants in the Netherlands today, and interest in further production in
the 2020s. Planned and potential production volumes could be used to inform the levels of
interim targets to ensure that it is at least possible to supply a high proportion of demand from
production in the Netherlands.
Supplying 14% SAF in the Netherlands in 2030 via new HEFA plants would require additional
investment of €230 and €730 million, with the potential for around 300 additional permanent
jobs.

High SAF costs and prices will mean economic impacts on airlines, in particular those with a hub in
the Netherlands, depending on the scope of fuels considered, and the level of the target
•

•

•

•

•

Expected prices for SAF are high: around 4-5 times the prices of fossil jet. This is a result of
both high production costs of SAF and very low levels of global supply today. Prices are not
expected to decrease to 2030. A kerosene blend containing 14% SAF is anticipated to cost
between €178/tonne and €276/tonne more than fossil kerosene, as a result of these high SAF
prices. If all of these costs are passed on to passengers, this represents an increased cost per
passenger per flight of around €7 for short-haul flights and around €33 for long-haul flights.
The costs imposed by an obligation will result in lower passenger numbers due to demand
reduction, mode-shifting, and use of alternative routes. This has an economic impact on all
actors in the NL aviation sector, but particularly airlines with hubs in the Netherlands.
Options to reduce these distortions are a) to advocate for policy with a wider geographic scope
b) reduce the level of the obligation, which would also reduce the climate benefits or c) reduce
the costs to passengers, for example through subsidising the additional costs of SAF blending.
Detailed economic impact assessment will be needed once policy options are narrowed down
further, to compare the expected costs versus expected benefits in terms of GHGs and
reduction of other air pollutants.
The additional costs of SAF blending could also lead to carbon leakage: increased emissions as
a result of airlines tankering (carrying more fuel than is needed to avoid uplifting fuel in the
Netherlands) or from passengers using alternative (potentially longer) routes on which SAF is
not used. This could be mitigated through the same approaches as for economic impacts.

Overall, an obligation would be an effective way to stimulate consumption of SAF in the Netherlands
•

An obligation for SAF in the Netherlands would be likely to result in the target of 14%
sustainable aviation fuels in 2030 being met, provided that the obligation resulted in a price
comparable to that in other similar markets. Nevertheless, a rapid increase in demand for SAF
in other countries or for feedstocks and fuels from the road transport sector could lead to price
increases and shortage of supply. An obligation would also be likely to support and stimulate
production in the Netherlands, although this would not be guaranteed by this type of policy.

4

Renewable energy obligation for aviation in the Netherlands
•

To support future SAF routes, such as advanced biofuels and power to liquids, an obligation is
needed to give market certainty to investors. However, an obligation alone would not provide
sufficient support, and so additional policy measures are needed to help to commercialise
these technologies and enable cost reductions.
An obligation is also an effective way to support near term SAF routes, through promoting
action across the industry, stimulating production, and encouraging competition between
suppliers. Providing a direct payment for SAF use, for example through a scheme analogous to
SDE++, would have the benefit of being able to split costs between industry and government,
and so reduce economic impacts, but would not bring the same advantages in terms of
competition and wider market creation, though it could stimulate production in the
Netherlands. Government would also need to consider carefully the level of public
contribution made. Adequately designed and with additional support measures, an obligation
would also support longer term SAF routes not commercial today, as well as their deployment
in the Netherlands.
Successful introduction and operation of an obligation relies on balancing the demand, set by
the level and timing of the obligation, with the supply, set by the scope of the target (e.g.
inclusion of food and feed crop based fuels), sustainability requirements, and any additional
support for the obligated fuels. Decisions made on each one of these factors discussed above
will affect the others, meaning that their combined impacts will need to be assessed, and reassessed if decisions change.

•

•

Key areas for agreement if an obligation is to be introduced
•
•
•
•
•
•
•
•

Extent to which biofuels based on food and feed crops should contribute towards SAF supply
and treatment of fuels from low ILUC crops
Extent to which waste oils feedstocks should contribute towards SAF supply
Form and level of support for advanced biofuels and power to liquids
Degree of economic impact on airlines
Level and timing of targets
Compliance mechanism
Chain of custody in pipelines across multiple countries
Approach to encouraging an EU-wide policy in parallel with introduction of an obligation in
the Netherlands

5

Renewable energy obligation for aviation in the Netherlands

2 Managementsamenvatting
Het verminderen van emissies door de luchtvaart is een belangrijk beleidsdoel voor Nederland
De noodzaak om klimaatverandering tegen te gaan, vereist het terugdringen van de
broeikasgasemissies in alle sectoren van de economie, inclusief de luchtvaart. Aangezien de luchtvaart
een internationale sector is, heeft een internationale benadering voor het terugdringen van de
emissies de voorkeur: het voorkomt ‘carbon emission leakage’ 2 en waarborgt een gelijk speelveld
tussen verschillende landen en luchtvaartmaatschappijen. De International Civil Aviation Organisatie
(ICAO) ontwikkelt momenteel het Carbon Offsetting and Reduction Scheme for International Aviation
(CORSIA). Dit schema beoogt het gebruik van duurzame vliegtuigbrandstoffen 3 aan te moedigen.
CORSIA verplicht deelnemende partijen daarnaast om emissies te verminderen door middel van
compensatie. Mocht dit schema het gebruik van SAF niet voldoende vergroten dan zullen aanvullende
maatregelen op Europees en/of nationaal niveau nodig zijn.
De internationale luchtvaart is een belangrijke economische sector voor Nederland, gezien het relatief
grote aandeel van het luchtvaartverkeer en bijbehorende brandstofverbruik in de Nederlandse
transportsector, vergeleken met andere EU-lidstaten. Voor Nederland is het daarom belangrijk om
innovatieve oplossingen te vinden voor de klimaateffecten van de internationale luchtvaart, zonder
daarbij de economische bijdrage van de luchtvaartsector te ondermijnen. In februari 2019 werd in de
RondeTafel Duurzame Luchtvaart een Ontwerp-Akkoord Duurzame Luchtvaart aangenomen, waarbij
men zich committeerde aan een doelstelling dat in 2030 ten minste 14% van de in Nederland
gebunkerde vliegtuigbrandstof van duurzame oorsprong is.
Deze studie beoordeelt de potentiële effectiviteit van een verplichting voor een aandeel
hernieuwbare energie in de Nederlandse luchtvaart
In navolging van dit Ontwerp-Akkoord heeft het ministerie van Infrastructuur en Waterstaat opdracht
gegeven tot deze studie om de mogelijke effectiviteit van een verplichting tot hernieuwbare energie
voor de luchtvaart in Nederland te beoordelen. Het rapport onderzoekt of invoering van een jaarlijkse
verplichting voor inzet van hernieuwbare energie in de Nederlandse luchtvaart een effectieve manier
zou zijn om de productie en het gebruik van duurzame vliegtuigbrandstof (SAF) te stimuleren, met als
beoogd doel het bereiken van inzet van ten minste 14% duurzame vliegtuigbrandstof in Nederland in
2030. Het rapport gaat ook in op de voorwaarden en risico's van het invoeren van een dergelijke
verplichting. Om dit te beoordelen, hebben we analyses uitgevoerd en interviews gehouden met
belanghebbenden, op de volgende zes belangrijke issues : de wettelijk kaders, keuze van
beleidsinstrumenten, opties voor aanbod van de duurzame brandstoffen, duurzaamheid, bevordering
van de productie in Nederland, economische effecten en logistieke aspecten.
Beleid op duurzame vliegtuigbrandstof ontwikkelt snel, zowel op internationaal, EU- als nationaal
niveau. Het huidige EU-beleid legt enkele beperkingen op aan de brandstoffen die zouden kunnen
worden ondersteund in EU- of Nederlands kader

2

‘Emission leakage’ is het effect waarbij door beleidsmaatregelen economische activiteiten verplaatst worden naar een andere land of
regio. In het ‘vertrekkende’ land zijn er dan minder emissies, maar omdat ze elders alsnog plaatsvinden is er netto geen effect.
3 (In dit rapport wordt ook de term Sustainable Aviation Fuels (SAF) gebruikt). De term duurzame vliegtuigbrandstof (SAF) betreft de
ongemengde brandstof van biobrandstof of van power-to-liquid. Als SAF wordt gemengd met conventionele kerosine spreekt dit rapport
over een SAF-mengsel.

6

Renewable energy obligation for aviation in the Netherlands
De evaluatie van het internationale, Europese en nationale beleid laat zien dat:
•

•

De onderlinge afstemming tussen internationaal beleidsmaatregelen en regionaal en
nationaal beleidsmaatregelen met betrekking tot duurzame vliegtuigbrandstoffen is nog
steeds gaande, maar lijkt vooralsnog geen belemmering te vormen voor een verplichting voor
een aandeel duurzame vliegtuigbrandstoffen in Nederland.
Het Europese beleid vereist dat een verplichtingsmaatregel of financiële steun aan
biobrandstoffen in overeenstemming zijn met de duurzaamheidscriteria van de Richtlijn
Hernieuwbare Energie (RED II), zelfs als de brandstoffen niet kunnen worden meegeteld voor
de RED II doelen. De regels voor staatssteun zijn eveneens belangrijk: deze beperken de
mogelijkheden voor steun voor biobrandstoffen op basis van voedsel/veevoergewassen. De
regels maken ook extra steun mogelijk in aanvulling op een verplichting, wanneer de steun
betrekking heeft op brandstoffen met hoge kosten en waarbij concurrentie-effecten kunnen
worden vermeden.

Vergeleken met andere beleidsmaatregelen, zou een bijmengverplichting in Nederland de hoogste
mate van zekerheid bieden dat het beoogde 14%-doel wordt bereikt
•

•

•

Een EU-brede verplichting zou de concurrentieverstoring en ‘carbon leakage’ verminderen,
maar het bereiken van overeenstemming in de gehele EU hierover en implementatie van een
verplichting op EU-niveau achten we daarom onwaarschijnlijk op de korte termijn. Daarom
richt dit rapport zich op het ontwerp van een Nederlandse SAF-verplichting.
Een bijmengverplichting biedt de hoogste mate van zekerheid dat het doel van 14% wordt
gerealiseerd. Het is ook de enige mogelijke optie als biobrandstoffen op basis van
voedsel/veevoergewassen zouden worden ondersteund. Praktisch gezien zijn er geen
substantiële belemmeringen voor de implementatie van een bijmengverplichting. Aanvullend
beleid om de kosteneffecten te beperken, zou vanwege de staatssteunregels beperkt zijn tot
bepaalde brandstoffen.
Beleidsondersteuning ter stimulering de vraag- of aanbodzijde kan eveneens worden
overwogen naast of in plaats van een verplichting. Een vergoeding voor het gebruik van
duurzame vliegtuigbrandstof zou kunnen worden vastgesteld om een redelijke mate van
vertrouwen te geven dat de doelstelling wordt bereikt. Een voordeel van deze optie is de
mogelijkheid om de nalevingskosten desgewenst te verdelen tussen bedrijfsleven en overheid.

De verplichting zal meest waarschijnlijk worden ingevuld met duurzame vliegtuigbrandstoffen
gemaakt van plantaardige oliën en dierlijke vetten. Routes op basis van andere grondstoffen
bevinden zich in een eerder stadium van de commercialisatie en hebben vooralsnog hogere kosten
•

•

Er zijn verschillende routes om duurzame vliegtuigbrandstoffen te produceren. Zes routes zijn
al gecertificeerd voor het bijmengen met fossiele vliegtuigbrandstof, tot een aandeel van ten
hoogste 50%. Momenteel heeft alleen de productieroute waarbij oliën/vetten met waterstof
worden opgewerkt tot SAF (HEFA) het commerciële stadium bereikt. Duurzame
vliegtuigbrandstof kan aan luchthavens worden geleverd via de bestaande infrastructuur, met
minimale extra afhandelingskosten.
De HEFA-route is, algemeen gesproken, momenteel de meest haalbare optie om de
verplichting te realiseren, maar er moet rekening worden gehouden met beschikbaarheid van
de grondstoffen als ook de vraag voor biobrandstoffen op basis van deze grondstoffen op

7

Renewable energy obligation for aviation in the Netherlands

•

andere markten toeneemt. Als bijvoorbeeld de verplichting van 14% duurzame
vliegtuigbrandstof in Nederlands luchtvaart – overeenkomend met circa 700 duizend ton SAF
in 2030 - volledig ingevuld zou worden met HEFA gemaakt van afvaloliën en -vetten, is hiervoor
ongeveer 18% van de in de EU beschikbare hoeveelheid van deze grondstoffen nodig. En
daarbij moet opgemerkt dat er ook een groeiende. Vraag is naar deze grondstoffen voor
biobrandstoffen in het wegvervoer.
Voor productieroutes gebaseerd op lignocellulosehoudende grondstoffen en de power-toliquid-routes ligt het beschikbaarheidsvraagstuk anders. Voor een volledige invulling van de
14%-SAF-doelstelling in Nederland in 2030 op basis van deze opties is slechts een beperkt
aandeel van het grondstofpotentieel in de EU vereist. Deze twee opties bevinden zich echter
nog in de demonstratie en vroege commerciële fase en er bestaat dus nog meer onzekerheid
over hun te verwachten bijdrage in 2030.

Voor verdere ontwikkeling is besluitvorming nodig over de duurzaamheidsaspecten van
grondstoffen en de steun aan geavanceerde biobrandstoffen en powe- to-liquid is nodig . De
besluiten zullen bepalend zijn voor de inrichting van een verplichtingsmaatregel en voor de
wisselwerking met het beleid in andere sectoren
Het waarborgen van de duurzaamheid van SAF is van groot belang voor alle belanghebbenden, om het
gebruik van niet-duurzame brandstoffen in de toekomst te vermijden en om een groter aanbod van
SAF in de toekomst te stimuleren.
•

•

•

De mate waarin biobrandstoffen op basis van voedsel/voedergewassen kunnen bijdragen aan
de levering van SAF is een belangrijke beleidskeuze. Hierover hebben betrokken partijen sterk
uiteenlopende standpunten. Deze beleidskeuze zal in samenhang met het Nederlandse
biobrandstoffenbeleid in andere sectoren moeten worden genomen.
Afvalgebaseerde oliën en vetten worden beschouwd als de belangrijkste kortetermijnroute
naar duurzame vliegtuigbrandstoffen, maar deze grondstoffen kennen een beperkte
beschikbaarheid. Of het gebruik ervan al dan niet moet worden beperkt, vereist afstemming
met beleidsvorming in andere sectoren.
Er bestaat brede steun voor het stimuleren van geavanceerde biobrandstoffen en
hernieuwbare elektriciteit (door middel van een subdoel, extra steun, of bij voorkeur beide)
vanwege de grotere beschikbare duurzame grondstoffenbasis. Dat leidt tot een groter
volumepotentieel van duurzame vliegtuigbrandstof.

Alle biobrandstoffen moeten voldoen aan de RED II-duurzaamheidscriteria. Deze criteria betreffen o.a.
de vermindering van well-to-wheel broeikasgasuitstoot, landgebruik, biodiversiteit en
koolstofvoorraden in bossen en natuurgebieden. Verdere verduidelijking van specifieke afspraken over
bijv. co-processing, de grondstoffen vermeld in Annex IX van de Richtlijn en de additionaliteit van
hernieuwbare elektriciteit zijn vereist om investeringen in productiefaciliteiten mogelijk te maken.
Hoewel een verplichting de productie van duurzame vliegtuigbrandstof ín Nederland niet
noodzakelijkerwijs begunstigt, is het waarschijnlijk wel dat een dergelijke verplichting de
belangstelling voor de meer productie van SAF aanwakkeren
•

Er zijn momenteel enkele SAF-fabrieken gepland in Nederland en er bestaat interesse voor
verdere productie na 2020. Informatie over geplande en potentiële productievolumes kan de

8

Renewable energy obligation for aviation in the Netherlands

•

basis vormen voor het vaststellen van tussentijdse doelstellingen, om zo de mogelijkheid te
creëren dat een groot deel van de vraag afkomstig is van in Nederland geproduceerde SAF.
Levering van 14% SAF in Nederland in 2030 via nieuwe HEFA-centrales zou extra investeringen
van ca. 230 - 730 miljoen euro vereisen, met het potentieel van ongeveer 300 extra vaste
banen.

Hoge SAF-kosten en -prijzen zullen economische gevolgen hebben voor luchtvaartmaatschappijen,
met name voor hen met een hub in Nederland. De mate van impact is afhankelijk van het portfolio
van ingezette duurzame vliegtuigbrandstoffen en de hoogte van de verplichting.
•

•

•

•

•

De verwachte prijzen voor SAF zijn hoog: ongeveer 4-5 keer de prijzen van fossiele
brandstoffen. Dit is het gevolg van zowel hoge productiekosten van SAF als het zeer lage niveau
van het huidige mondiale aanbod. Er wordt niet verwacht dat de prijzen richting 2030 zullen
dalen. Een kerosinemengsel met 14% SAF zal naar verwachting tussen 178 €/ton en 276 €/ton
meer kosten dan fossiele kerosine, als gevolg van deze hoge SAF-prijzen. Als al deze kosten
aan de passagiers worden doorberekend, betekent dit een stijging van de kosten per passagier
per vlucht van ongeveer € 7 voor korteafstandsvluchten en ongeveer € 33 voor
langeafstandsvluchten.
De kosten die een verplichting met zich meebrengt, zullen leiden tot een lager aantal
passagiers als gevolg van vraagafname, een verschuiving naar andere vervoerswijzen en het
gebruik van alternatieve routes. Dit heeft een economische impact op alle spelers in de
Nederlandse luchtvaartsector, maar vooral op luchtvaartmaatschappijen met hubs in
Nederland.
Mogelijkheden om deze verstoringen te beperken zijn: a) pleiten voor een beleid met een
ruimer geografisch bereik, b) verlaging van het verplichtingspercentage, wat ook lagere
klimaatvoordelen tot gevolg heeft, of c) verlaging van de kosten voor de passagiers,
bijvoorbeeld door subsidiëring van de extra kosten van de duurzame vliegtuigbrandstof.
Zodra er keuzes wordt gemaakt voor bepaalde beleidsopties, zal een gedetailleerde
economische ‘impact assessment’ nodig zijn om de verwachte kosten af te zetten tegen de
verwachte baten (in termen van reductie van broeikasgasreductie en vermindering van
emissies van andere luchtverontreinigende stoffen).
De additionele kosten van het mengen van SAF kunnen ook leiden tot ‘carbon leakage’: hogere
emissies als gevolg van het tanken door luchtvaartmaatschappijen elders (en die dan meer
brandstof vervoeren dan nodig is om te voorkomen dat er brandstof moet worden getankt in
Nederland) of als gevolg van passagiers die alternatieve (potentieel langere) routes gebruiken
waarop SAF niet wordt gebruikt. Dit kan worden beperkt door dezelfde aanpak als voor de
economische effecten (zie eerdere bulletpoint op deze pagina).

Algemeen gesteld zou een verplichting een effectieve manier zijn om het verbruik van SAF in
Nederland te stimuleren.
•

Een verplichting voor gebruik van SAF in Nederland zal er waarschijnlijk toe leiden dat de
doelstelling van 14% duurzame vliegtuigbrandstoffen in 2030 wordt gehaald, op voorwaarde
dat de verplichting leidt tot een prijs die vergelijkbaar is met die in andere relevante markten.
Niettemin kan een snelle groei van de vraag naar SAF in andere landen of groei van inzet van
grondstoffen en brandstoffen in wegtransport leiden tot prijsstijgingen en tekorten aan

9

Renewable energy obligation for aviation in the Netherlands
aanbodzijde van SAF. Verwacht wordt dat een verplichting ook de productie in Nederland kan
ondersteunen en stimuleren, alhoewel dit niet gegarandeerd kan worden met een
verplichting.
Een verplichting is noodzakelijk om investeerders voldoende marktzekerheid te bieden voor
het ontwikkelen van toekomstige SAF-productieroutes, gebaseerd op geavanceerde
biobrandstoffen en power-to-liquid. Een verplichting alleen zou echter niet voldoende steun
bieden en daarom zijn aanvullende beleidsmaatregelen nodig om deze technologieën te
helpen commercialiseren en de kostenreductie mogelijk te maken.
Een verplichting is ook een doeltreffend instrument om SAF-routes die al commercieel stadium
hebben bereikt te ondersteunen. De maatregel raakt de hele sector, stimuleert de productie
en moedigt de concurrentie tussen leveranciers aan. Een rechtstreekse betaling voor het
gebruik van SAF, bijvoorbeeld via een regeling analoog aan de SDE++-regeling, zou het
voordeel hebben dat de kosten kunnen worden verdeeld tussen het bedrijfsleven en de
overheid. Op die manier kunnen de economische gevolgen worden verminderd. Daar staat
tegenover dat het niet dezelfde voordelen opleveren in termen van concurrentie en bredere
marktcreatie. Een dergelijke maatregel kan wel de productie in Nederland stimuleren. De
overheid moet wel een zorgvuldige afweging maken over de mate van een publieke bijdrage.
Een verplichting, die goed is opgezet en met aanvullende ondersteunende maatregelen, zou
ook de SAF-routes die nu nog niet commercieel zijn, en de inzet van de SAF van deze routes in
Nederland ten goede komen.
Een succesvolle invoering en werking van een verplichting hangt af van het vinden van het
juiste evenwicht tussen de vraag - die wordt bepaald door het niveau en de timing van de
verplichting - en het aanbod - dat wordt bepaald door de reikwijdte van de doelstelling
(bijvoorbeeld, het opnemen van brandstoffen op basis van voedsel/voedergewassen),
duurzaamheidseisen en eventuele aanvullende steun voor de verplichte brandstoffen.
Besluiten op elk van de hierboven besproken issues, zullen gevolgen hebben voor de andere
issues. Dit houdt in dat de gecombineerde effecten ervan eveneens moeten worden
beoordeeld en herbeoordeeld moeten worden als besluiten veranderen.

•

•

•

Belangrijkste onderwerpen waarover overeenstemming moet worden bereikt als een
verplichting wordt ingevoerd
•

•
•
•
•
•
•
•

Mate waarin biobrandstoffen op basis van voedsel/voedergewassen mogen bijdragen aan
de levering van SAF en de wijze waarop de bijdrage vannieuwe gewassen (zoals
tussengewassen en bodembedekkende gewassen) wordt beschouwd
Mate waarin afval- en reststroomgebaseerde biobrandstoffen kunnen bijdragen aan de
levering van SAF
Vorm en mate van steun voor geavanceerde biobrandstoffen en power-to-liquid
Mate van economische impact op luchtvaartmaatschappijen
Niveau en timing van de doestellingen
Nalevingsmechanisme
‘Chain of Custody’ in een brandstofpijpleidingensysteem dat zich over meerdere landen
uitstrekt
Aanpak om een EU-breed beleid te stimuleren, parallel aan de invoering van een
verplichting in Nederland

10

Renewable energy obligation for aviation in the Netherlands

3 Introduction
3.1 Context
The need to tackle climate change will require very deep emissions reduction in all sectors of the
economy including air travel. For example, International Energy Agency (IEA) scenarios 4 show this
being achieved in 2 degree and below 2 degree scenarios through significant reductions in aviation
final energy consumption with lower growth in air mobility demand (by shifting to high speed rail),
significant efficiency improvements, and adoption of sustainable aviation fuels. The IEA notes that
reducing global aviation emissions in line with the Below 2 degree scenario carbon budget could not
be achieved through offsets from other sectors alone, without a direct reduction of CO2 emissions from
the aviation sector.
As aviation is an international sector, international approaches to emissions reduction are preferable,
to avoid emissions leakage5, and ensure a level playing field between different countries and airlines.
The International Civil Aviation Organization (ICAO) is developing the agreement for Carbon Offsetting
and Reduction Scheme for International Aviation (CORSIA), which will aim to encourage sustainable
aviation fuels as well as obliging participating parties to reduce emissions through offsetting.
Participation in CORSIA will begin through a pilot phase (2021 – 2023) and first phase (2024 to 2026)
on a voluntary basis. The second phase (2027-2035) will apply to all states that have an individual share
of international aviation activities above 0.5%6. The Netherlands will be required to participate in the
second phase, and intends to participate voluntarily in the earlier phases. Airlines can comply with
CORSIA through a number of measures: reducing fuel burn, for example through more efficient aircraft
and operations; ensuring that the fuel they do burn has lower CO2 emissions, for example through
supplying sustainable aviation fuel; and through a market-based offsetting mechanism.
Supply of sustainable aviation fuels is therefore a key part of how airlines could meet their obligations
under the CORSIA agreement. However, if (as expected) this does not provide a strong enough driver
for sustainable aviation fuel (SAF) uptake, additional measures will be required at European and/or
national level. The Dutch Minister of Infrastructure and Water Management, Van Nieuwenhuizen,
stated in a letter of 27 March 2019, that a European approach would be preferred, to avoid conflicts
and competition with other countries, emissions leakage, and a reduced driver for investment.
However, action at a national level may be required where this is not feasible, or in order for a country
to take a lead in stimulating the sector. Whichever approach is taken, care will be needed to determine
the rules for each scheme to avoid double counting of climate benefits, while ensuring that measures
are collectively strong enough to drive uptake.
For the Netherlands, international aviation is an important sector of the economy: the share of aviation
traffic and corresponding fuel consumption within the transport sector as a whole is high compared to
other EU Member States (MSs). Therefore for the Netherlands it is particularly important to find
innovative solutions to address the climate impacts of international aviation whilst not undermining
the important economic contribution from the aviation sector. The Minister’s letter also highlights the
potential opportunities for the Netherlands from sustainable aviation fuel production, as a result of
4 IEA, Energy Technology Perspectives, 2017
5 Increase of emissions in other sectors or geographies
6

ICAO, Available from: https://www.icao.int/environmental-protection/Pages/A39_CORSIA_FAQ2.aspx

11

Renewable energy obligation for aviation in the Netherlands
the current infrastructure, chemical industry, and knowledge institutions. On 21st February 2019, a
Draft Sustainable Aviation Agreement was adopted at the Sustainable Aviation Roundtable, made up
of the Ministry of Infrastructure and Water Management (Min IenW) as well as stakeholders from the
sectors, academics and NGOs. This group provided specific aviation measures to the Mobility sector
Roundtable, one of the five sector tables determining measures for the Climate Agreement7. The group
committed to a target of at least 14% of the aviation fuel bunkered in the Netherlands in 2030 being
sustainable, including sustainable advanced biofuels, synthetic kerosene based on green electricity/
green hydrogen, green hydrogen for combustion engines or a fuel cell (hybrid electric).

3.2 Objectives of this study
Following the Draft Sustainable Aviation Agreement, the Ministry of Infrastructure and Water
Management (IenW) commissioned this study to assess the potential effectiveness of a renewable
energy obligation for aviation in the Netherlands.
The overall questions for this study are:
•

•
•

Would the introduction of an annual renewable energy obligation for aviation be an effective
way to stimulate the production and consumption of sustainable aviation fuel (SAF), with a
view to achieving the objective of a minimum of 14% sustainable aviation fuel in the
Netherlands by 2030?
What are the preconditions for introduction of this commitment for aviation in the
short/medium term?
What are the risks of introducing this type of obligation?

In order to answer these questions, the project team has undertaken analysis and stakeholder
interviews, covering six key areas:
•
•
•
•
•
•
•

7

The legal framework for an obligation - whether there are any requirements for, or obstacles
to, particular policy options for SAF at an EU or NL level
The choice of policy mechanism – what policy mechanisms could encourage SAF consumption,
and what options exist for introduction of an obligation?
Supply options - how an obligation of 14% renewable energy in obligation in 2030 would be
likely to be supplied
Sustainability – how an obligation could ensure sustainable fuel supply, and promote
increasing sustainability
Promoting SAF production in the Netherlands – how this could be achieved
Economic impacts – how the costs of supplying SAF would affect airlines, fuel suppliers,
airports and passengers, and the economic opportunities from SAF production
Sustainable aviation fuel supply logistics – whether there are barriers to increasing supply of
SAF into aviation fuel supply chains

Climate Agreement https://www.klimaatakkoord.nl/documenten/publicaties/2019/06/28/national-climate-agreement-the-netherlands

12

Renewable energy obligation for aviation in the Netherlands

4 Legal framework
Summary
Review of international, EU and national policies shows that:
•

•

•

Interaction of international policies and regional and national policies related to SAF are
still under discussion. However, aside from a restriction on placing taxes on fuels,
international policies do not appear to present a barrier to a SAF obligation in the
Netherlands, or place particular requirements on the form of the obligation.
European policy requires that obligations or financial support for biofuels follow the
sustainability criteria set out in the Renewable Energy Directive (REDII), even if the fuels are
not counted towards REDII targets. State Aid rules are also important: these may limit the
options for support of food and feed crop-based biofuels, and allow additional support
alongside an obligation only for fuels with high costs and where competitive impacts can be
avoided.
There are existing policies in the Netherlands to support supply of renewable fuels,
including SAF. Although there will be interactions between markets for renewable fuels in
different sectors, the policies themselves do not restrict the options for SAF policy.

This section considers the legal framework related to SAF, at international, EU and national level, in
order to determine whether there are any requirements for, or obstacles to, particular policy options
for SAF at an EU or NL level. It is also important to consider how a policy mechanism for SAF would
interact with other existing mechanisms, in terms of how SAF use or emissions saved would be
accounted for.
Questions to be answered in this section include:
•
•

•

Is it legally possible to set a blending obligation at EU or at national level? Would there be
obstacles to this from ICAO, from EU law, or from national laws?
Are there restrictions on how the target could be set, for example on the type of policy
mechanism used, who the obligated parties might be, or what the metric for measurement
could be?
What would interactions be with other mechanisms that promote renewable energy use or
GHG reduction in aviation? For example, what could be claimed by Member States and airlines
(renewable energy use, GHG reductions) under which framework (e.g. the recast Renewable
Energy Directive (RED II), EU emissions trading scheme, EU Effort Sharing Regulation, Carbon
Offsetting and Reduction Scheme for International Aviation (CORSIA))

13

Renewable energy obligation for aviation in the Netherlands

4.1 International
CORSIA
The International Civil Aviation Authority (ICAO) is a UN specialised agency, and one of its
environmental goals, agreed in 2004, is to “limit or reduce the impact of aviation greenhouse gas
emissions on the global climate”.8 In 2016 ICAO adopted the Carbon Offsetting and Reduction Scheme
for International Aviation (CORSIA), which aims to stabilise net CO2 emissions from international civil
aviation at 2020 levels9. This is the first global system aiming to address CO2 emissions from aviation.
Participation in CORSIA will begin through a pilot phase (2021 – 2023) and first phase (2024 to 2026)
on a voluntary basis. The second phase (2027-2035) will apply to all states that have an individual share
of international aviation activities above 0.5%10. Airlines can comply with CORSIA through a number of
measures: reducing fuel use, for example through more efficient aircraft and operations; ensuring that
the fuel used has lower CO2 emissions, for example through supplying sustainable aviation fuel; and
through a market-based offsetting mechanism.
Emissions reduction can be claimed from the use of CORSIA Eligible Fuels that meet CORSIA
Sustainability Criteria, certified by an approved Sustainability Certification Scheme. The saving claimed
will be the actual GHG saving from the eligible fuel used, rather than a fixed GHG saving for all eligible
fuels, meaning that fuels with higher GHG savings are incentivised. Eligible fuels can be a sustainable
aviation fuel (biofuel, other renewable or waste-based), or a lower carbon aviation fuel (fossil based).
CORSIA sustainability criteria have been agreed for the pilot phase11. Eligible fuels should have at least
10% GHG savings, including an ILUC factor, and that there should be no deforestation after 1 January
200812. A further ten themes not approved for the pilot phase remain under discussion for later phases:
water, water rights, soil, air, conservation, waste, human rights, land rights, local development and
food security13. Final sustainability requirements will be agreed by the end of the pilot phase. It is
therefore not yet known whether the final CORSIA rules alone will be strong enough to guarantee the
sustainability of SAFs. Interviewees highlighted that many airlines will voluntarily go beyond these rules
in the SAF that they use, and advocate for more stringent standards (see section 7.5).

Does CORSIA preclude other policy mechanisms that promote the use of SAF?
ICAO’s agreement on CORSIA14 includes several statements aiming for CORSIA to be the only marketbased measure for CO2 emissions in aviation.
•

Introduction: “Recognizing that MBMs [market based mechanisms] should not be duplicative
and international aviation CO2 emissions should be accounted for only once”

8 ICAO, Available from: https://www.icao.int/environmental-protection/Pages/default.aspx
9 CORSIA (2018) Available from: https://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/corsia-fact-sheet.pdf
10 ICAO, Available from: https://www.icao.int/environmental-protection/Pages/A39_CORSIA_FAQ2.aspx
11 CORSIA Eligible Fuels, ICAO, accessed July 2019 https://www.icao.int/environmental-protection/CORSIA/Pages/CORSIA-Eligible-

Fuels.aspx
12 Sustainability of CORSIA Eligible Fuels, ICAO, 2019
https://www.icao.int/Meetings/SAFStocktaking/Documents/ICAO%20SAF%20Stocktaking%202019%20-%20AI4-4%20Bruno%20Silva.pdf
and T&E, 2019 https://www.euractiv.com/section/aviation/opinion/aviation-risks-undercutting-eus-new-renewables-rules/
13 European Commission (2018) Union reply to the State letters sent by ICAO to the Member States on
the CORSIA package, Available from: http://data.consilium.europa.eu/doc/document/ST-6137-2018-ADD-3-REV-1/en/pdf
14 ICAO 2016 Resolution A39-3: Consolidated statement of continuing ICAO policies and practices related to environmental protection –
Global Market-based Measure (MBM) scheme https://www.icao.int/environmental-protection/Documents/Resolution_A39_3.pdf

14

Renewable energy obligation for aviation in the Netherlands
•

•

Introduction: “Emphasizing that the decision to develop a global MBM scheme for
international aviation reflects the strong support of Member States for a global solution for
the international aviation industry, as opposed to a possible patchwork of State and regional
MBMs”
Article 19: “Determines that the CORSIA or any other scheme decided by the Assembly is to be
the market-based measure applying to CO2 emissions from international aviation”

A study on the SAF obligation in Sweden concluded that a GHG reduction obligation on fuel suppliers
rather than airlines would not constitute a market-based mechanism for CO2 emissions on
international aviation as referred to in the agreement15. A similar view has been taken in development
of the Spanish target: that a Spanish policy promoting renewable energy use (rather than CO2) by fuel
suppliers (rather than airlines) would not be a market-based measure for CO2 emissions. Nevertheless,
there is ongoing debate at ICAO on the interaction between CORSIA and inclusion of aviation in the EU
ETS, and on the potential for interaction with other policies which could be considered market-based
measures. In this study, we have assumed that CORSIA would not present a barrier to an EU or NL
policy mechanism on fuels, and would not preclude this mechanism from acting on either airlines or
fuel suppliers, given that it would be a policy on fuels, rather than on all CO2 emissions from aviation.
How would SAF use promoted by another policy mechanism interact with CORSIA targets?
CORSIA Standards and Recommended Practices (SARP) Annex 16 Volume IV 16 states that:” an
aeroplane operator should provide a declaration of all other GHG schemes it participates in where the
emission reductions from the use of CORSIA eligible fuels may be claimed, and a declaration that it has
not made claims for the same batches of eligible fuels under these other schemes”. This is intended to
avoid counting the emissions savings towards more than one target – although this is not necessarily
a problem as long as emissions are only counted once, as explained below. Currently, emissions savings
from opt-in of SAF to the Netherlands’ Energy for Transport system cannot be counted towards CORSIA
or EU ETS (see section 4.3), although this need not be the case under a new policy.
This requirement intends that GHG savings claimed under CORSIA should not be claimed towards
compliance with other GHG targets. However:
•

•

The investigation into the Swedish obligation concluded that emissions reductions from use of
SAF for refuelling in Sweden should be allowed to count towards compliance with the
obligation by fuel suppliers, and also be taken into account towards EU ETS by airlines17. The
report does not explicitly state what the view is on CORSIA, but points out the difference
between CORSIA and a national obligation on fuel suppliers, and suggests that it would be
unreasonable for airlines not to be allowed to differentiate between fossil jet and SAF.
This does not necessarily preclude the renewable energy use being claimed towards
compliance with a renewable energy target (such as RED II targets and/or a national
renewable energy in aviation target), a view taken in discussion on the Spanish policy. As long

15 SOU 2019 Biojet för flyget, p184, Available from:

https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911
16 Annex 16 Volume IV 2.3.3.2 First Edition of Annex 16 — Environmental Protection, Volume IV — Carbon Offsetting and Reduction
Scheme for International Aviation (CORSIA)
17 SOU 2019 p184 Biojet för flyget, p206, Available from:
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911

15

Renewable energy obligation for aviation in the Netherlands

•

as the associated GHG savings from international aviation are not claimed in the national
inventory this is not seen as a problem
It is arguable that it should be possible to define an obligation for SAF use using GHG savings
as the metric for compliance, as long as the resulting savings from SAF use in international
aviation are not counted towards national targets

How would reporting under CORSIA fit with reporting under other schemes?
Under CORSIA international emissions are reported to the State by airlines on an annual basis, in an
Emissions Report, including use of CORSIA eligible fuels18, their origin, feedstock and greenhouse gas
savings19. CORSIA does not require reporting of physical supply of eligible fuel, given that supply chains
are co-mingled. Reporting is based on purchasing and blending records. The European Commission has
created a dedicated monitoring plan template for the monitoring of emissions for both CORSIA and
EU-ETS20. This means that it would be most efficient for any new policy mechanism to follow the same
approach as used here to simplify reporting.

International aviation agreements: ICAO and bilateral agreements
The Chicago Convention (1944) prohibits the taxation of fuel on already on-board aircraft. ICAO has
policies and guidance material on taxes defined in Assembly Resolution A37-20, Appendix E, as well as
in the ICAO’s Policies on Taxation in the Field of International Air Transport21. This text states
that no taxes or similar duties should be levied on fuels. Bilateral agreements, for example the EU–US
Air Transport Agreement22, reflect this text. However VAT and other taxes on fuels in some countries
do exist,23 which ICAO is concerned about. There are also many other types of duty and fee not related
to fuels, on both domestic and international flights, which vary by country24, including a Dutch flight
tax for passengers and freight from 2021 which is under discussion25.
The European Court of Justice has ruled that inclusion of aviation in the EU ETS does not constitute a
tax on fuel under this rule, but that a CO2 tax on fuel would do26. Analysis of SAF policy for Sweden
concluded that an obligation on aviation fuel does not constitute a tax, as it does not involve transfer
of funds to the state. However, as obligations generally include a penalty for non-compliance, to be
paid by the obligated party (such as a fuel supplier), there is a question over whether this would be
considered a tax. The Swedish analysis concludes that as the system providing revenue to the state is
not a decisive factor in whether the instrument constitutes a tax, the GHG reduction obligation on
aviation fuel in Sweden would not constitute a tax. It also considers how policy affecting fuel would be
18 ICAO (2019) Carbon Offsetting and Reduction Scheme

for International Aviation (CORSIA), Frequently Asked Questions (FAQs), Section 3.78, Available from: https://www.icao.int/environmentalprotection/CORSIA/Documents/CORSIA_FAQs_September%202019_FINAL.PDF
19 Template of CORSIA eligible fuels supplementary information to the Emissions Report (from aeroplane operator to
State)https://www.icao.int/environmental-protection/CORSIA/Pages/Templates.aspx
20 NEA 2019 CORSIA obligations 2019-2020 https://www.emissionsauthority.nl/topics/corsia
21 ICAO (1994) ICAO'S policies on taxation in the field of international air transport, Available from:
https://www.icao.int/publications/Documents/8632_2ed_en.pdf
22 European Commission (2007) Available from: https://eur-lex.europa.eu/legalcontent/EN/TXT/HTML/?uri=CELEX:32007D0339&from=EN#d1e797-4-1
23 ICAO (2013) Available from: https://www.icao.int/Meetings/atconf6/Documents/WorkingPapers/ATConf6-wp010_en.pdf
24 ICAO (2013) Available from: https://www.icao.int/Meetings/atconf6/Documents/WorkingPapers/ATConf6-wp010_en.pdf
25
NL government, Dutch flight tax, Available from: https://www.rijksoverheid.nl/documenten/kamerstukken/2019/05/14/nader-rapportwijziging-van-de-wet-belastingen-op-milieugrondslag-wet-vliegbelasting ; documents available from:
https://www.rijksoverheid.nl/documenten/kamerstukken/2019/09/20/nota-naar-aanleiding-van-het-verslag-wet-vliegbelasting
26 SOU (2019) Biojet för flyget p182, Available from:
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911

16

Renewable energy obligation for aviation in the Netherlands
considered under Article 15 of the EU-US agreement, which states that adverse effects of
environmental policies should be minimised. The report concludes that a policy which acts on fuel
suppliers rather than airlines, and which is not discriminatory between national and non-national
airlines, is unlikely to be an issue. However it was concluded that this may be a point for discussion
within the framework of the agreement. Similarly, discussions on a Spanish policy currently consider
that a SAF obligation would not constitute a tax, and in any case would fall on the fuel supplier rather
than an airline.
Whilst the views of those who have considered this are generally that an obligation would not be
considered a tax, there is no precedent on this. There is also no clear view on whether this would vary
depending on whether it was placed on fuel suppliers or airlines, whether or not the penalty for noncompliance was financial, and how this penalty income was used (for example, if redistributed to
organisations that did comply, as was previously done in the UK Renewable Transport Fuel Obligation).

WTO
The Netherlands and the EU as a whole are members of the World Trade Organization (WTO). WTO
agreements limit members’ ability to subsidise fuels, and also introduce policies which will have an
impact on trade, for example if these measures are considered to be discriminatory between fuelproducing countries. For example, there are ongoing disputes over the treatment of palm oil under EU
policy27.
The Swedish investigation (section 9.5.2) states that (translated) “proposals are designed in a nondiscriminatory manner and in compliance with the RED. It must be assumed that Union law is
compatible with the agreements”. On this basis, it appears that if the policy is designed not to be
discriminatory (e.g. not requiring fuel from EU/NL), and is similar to how biofuels policies implementing
the RED have been used to date in road transport, the likelihood of WTO challenge is low.

4.2 EU
Renewable Energy Directive
The recast of the Renewable Energy Directive to 2030, or RED II28, allows for Member States to take
renewable fuel and recycled carbon fuels used in aviation to count towards their targets for the supply
of renewable energy in the transport sector. This includes biofuels and renewable fuels of nonbiological origin (RFNBOs, including when used as intermediate products for the production of
conventional fuels), and may include recycled carbon fuels. Use of these fuels is not counted towards
the denominator, which includes fuel use in road and rail only, but is counted towards the numerator
(Article 27). For the purposes of this calculation fuels supplied in the aviation sector shall be considered
to be 1.2 times their energy content with the exception of fuels produced from food and feed crops.
This article means that there is no obligation for Member States to use SAF, but that if MSs do so, the
SAF use can be counted towards RED II targets, providing that they meet sustainability requirements.

27 Bernama, 2019 Malaysia to file complaint against EU's palm biofuel policy with WTO by November

https://www.theedgemarkets.com/article/malaysia-file-complaint-against-uss-palm-biofuel-policy-wto-november
28 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy
from renewable sources http://data.europa.eu/eli/dir/2018/2001/oj

17

Renewable energy obligation for aviation in the Netherlands
Renewable fuels (biofuels and RFNBOs), but not recycled carbon fuels29, can also be counted towards
MSs overall renewable energy targets in Article 3 of RED II (see more below).
Sustainability requirements in RED II apply to fuels that are used to count towards overall renewable
energy shares of MSs (at least 32% in 2030, Article 3), towards the target for transport (at least 14% in
2030, Article 25), towards other renewable energy obligations, or that are eligible for financial support
for their consumption. Requirements cover soil, biodiversity, use of high carbon stock land and
peatland, sustainable forestry, changes in forest carbon stock, and minimum lifecycle greenhouse gas
savings. Sustainability requirements are discussed in more detail in Chapter 7.
RED II sets other requirements which could interact with SAF policy, which only apply to fuels used to
meet the Article 3 and Article 25 targets:
•

A cap on contribution to the targets by biofuels produced from food or feed crops set at 1%
higher than a MS’s 2020 contribution for these biofuels, or at 7% contribution, whichever is
lowest (Article 26).

•

A cap on contribution to the targets by high indirect land use change (ILUC) biofuels with the
limit set at an MS’s 2019 contribution level for these fuels, unless they are certified as having
low indirect land-use change risk. This limit is set to be decreased from 2023 to 2030 to a 0%
contribution level.

•

A cap on contribution to the targets by biofuels produced from feedstock listed in Part B of
Annex IX (waste cooking oils and animal fats) of 1.7 %. However, Member States may modify
this limit, taking into account the availability of feedstock, providing this is justified and subject
to approval by the Commission

•

A sub target for advanced biofuels produced from a list given in Annex IXa (lignocellulosic
energy crops, wastes and residues) of at least 0.2 % in 2022, at least 1 % in 2025 and at least
3.5 % in 2030 (after MSs count these fuels at twice their energy content towards the targets)

•

MSs can count fuels from feedstocks in Annex IX (a and b) at twice their energy content

How does SAF use count towards RED II targets?
This is still under discussion. RED II covers energy consumed in the EU, so use of SAF in domestic and
intra-EU flights should be able to be counted towards RED II renewable energy targets, but renewable
energy use in international flights outside the EU may not be counted. . As Article 25 clearly aims at
promoting renewable energy use in transport and in aviation, it is expected that SAF use will be
counted towards these targets, with a 1.2x multiplier(for non food and feed crop based fuels). In the
Netherlands, all SAF use is currently counted towards the RED Article 25 target. It may also be possible
for SAF use to count towards Article 3 targets. This is not currently done in the Netherlands.

29 European Commission (2018) (89) of Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on

the promotion of the use of energy from renewable sources, Available from: http://data.europa.eu/eli/dir/2018/2001/oj

18

Renewable energy obligation for aviation in the Netherlands
Would claiming towards RED II targets preclude claiming GHG emissions savings under another
scheme?
Emission reduction obligations and renewables policies are separate, and so should not be considered
to be in conflict. As a result, claiming SAF use towards RED II targets would not preclude the GHG
emissions savings being claimed under another scheme. There is precedent for this with the coexistence of the RED and Article 7a of the Fuel Quality Directive, which sets a GHG emission reduction
obligation on fuel suppliers to road vehicles, non-road mobile machinery, agricultural and forestry
tractors, and recreational craft when not at sea. By 31 December 2020 fuel suppliers must reduce GHG
emissions by 6% compared with the 2010 fuel baseline standard. Recently it has become stated that
in view of the European Commission this obligation is assumed to extend to the years after 2020, i.e.
into implementation of RED II, although no official decision has been made on this.
Would RED II sustainability requirements apply to a SAF obligation?
Sustainability requirements in RED II in Article 29 apply to fuels that are used to count towards Article
3, Article 25, towards other renewable energy obligations, or that are eligible for financial support for
their consumption. Therefore any policy supporting SAF that was either a renewable energy obligation
or a form of financial support for consumption would need to include these requirements. This would
include an obligation for SAF in the Netherlands, even if this was not used to count towards any RED II
targets.
In addition, the sustainability criteria of any new policy could not go beyond those requirements:
•

Article 29 (12): “For the purposes referred to in points (a), (b) and (c) of the first subparagraph
of paragraph 1 of this Article, and without prejudice to Articles 25 and 26, Member States shall
not refuse to take into account, on other sustainability grounds, biofuels and bioliquids
obtained in compliance with this Article. This paragraph shall be without prejudice to public
support granted under support schemes approved before 24 December 2018.”

This means that a new policy could not require any higher sustainability standards, such as those set
out under specific sustainability certification schemes (see section 7.5).
However, this only applies to the sustainability requirements in Article 29. A different approach is taken
to other requirements:
•

•

•

Article 25 allows MSs to “exempt, or distinguish between, different fuel suppliers and different
energy carriers when setting the obligation on the fuel suppliers, ensuring that the varying
degrees of maturity and the cost of different technologies are taken into account”.
Article 26 states that MS can “set a lower limit and may distinguish, for the purposes of Article
29(1), between different biofuels, bioliquids and biomass fuels produced from food and feed
crops, taking into account best available evidence on indirect land-use change impact.
Member States may, for example, set a lower limit for the share of biofuels, bioliquids and
biomass fuels produced from oil crops.”
Article 27 allows MS to modify the limit on Annex IX, Part B feedstocks “where justified, [..],
taking into account the availability of feedstock. Any such modification shall be subject to
approval by the Commission”.

19

Renewable energy obligation for aviation in the Netherlands
As a result, a new SAF policy could differentiate between these fuel types, including setting
lower/higher targets/caps than those given in RED II, when approved by the Commission.
The requirements of Article 25, 26 and 27 on crop caps, advanced biofuels, Annex IX, Part B biofuels
and high ILUC fuels only apply to fuels used to meet the Article 3 and Article 25 targets. It would be
possible to use SAF without meeting these requirements if the SAF used is not counted towards those
targets. Nevertheless, sustainability requirements in Article 29 would still need to be met if the SAF
use was supported by an obligation or financial support.

EU Emissions Trading Scheme (EU ETS)
Emissions from flights with take-off and landing within the EEA are included in the EU ETS with certain
exceptions. International aviation with take-off or landing outside the EEA are exempted until
December 2023, when their inclusion will be reviewed on the basis of the progress with
implementation of CORSIA. Under the EU ETS biofuels meeting RED sustainability criteria are counted
as having zero GHG emissions. This currently provides a small benefit to use of SAF in Europe, as the
EU ETS credit price is low (€28/tCO2 in July 201930). Debate is ongoing over the potential for this to
conflict with the CORSIA provision on being the only global market-based measure applying to CO2
emissions from international flights.
As well as requirements to meet sustainability criteria, the EU ETS also requires that biofuels reported
under the EU ETS have not been accounted for in other GHG regulation systems. This can be done
through verified purchase records31 or a guarantee of origin system in line with the RED.
The investigation into the Swedish obligation concluded that emissions reductions from use of SAF for
refuelling in Sweden should be allowed to count towards compliance with the obligation by fuel
suppliers, and also be taken into account towards EU ETS by airlines32.
Currently, SAF use in the Netherlands under the opt-in system is not counted towards EU ETS, but
future treatment is under discussion, and so this does not set a condition for this study. Several
interviewees stated that they did not see a barrier to obligated SAF use also being used for EU ETS
compliance as long as the proof of sustainability is available to the airline, and that GHG savings are
not double counted with national GHG savings. This would mean multiple policy support mechanisms
being used to cover the costs of SAF use, but again, interviewees considered that there was no legal
barrier to this, if agreed upon by NL policymakers.
Overall, it is important that international emissions savings resulting from SAF policies follow whatever
approach is finally agreed between CORSIA and EU ETS.

30 Sandbag carbon price viewer, Available from: https://sandbag.org.uk/carbon-price-viewer/
31 European Commission (2018) The Monitoring and Reporting Regulation –General guidance for Aircraft Operators, Section 5.5

https://ec.europa.eu/clima/sites/clima/files/ets/monitoring/docs/gd2_guidance_aircraft_en.pdf
32 SOU (2019) Biojet för flyget p206, Availbale from :
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911

20

Renewable energy obligation for aviation in the Netherlands

State Aid
Policies which involve transfer of state resources to industry need to comply with EU law on State Aid,
under article 107–109 of the Treaty on the Functioning of the European Union (TFEU)33. This can be in
the form of grants, loans, guarantees, investment, waived tax revenues or exemption from fines34. It
is possible for some types of support to be exempted from State Aid rules. This can be done through
General Block Exemption Regulations (GBERs), which provide a list of specific conditions under which
Member States may launch a funding scheme without being required to complete the full notification
procedure. This is possible for promotion of renewable energy sources 35 . Provided the block
exemption conditions are met, the organisation is only required to notify the Commission
retrospectively. For biofuels, these conditions exclude support for food-based biofuels, and biofuels
which are subject to a supply or blending obligation except in certain cases (see below). If the
conditions are not met, the organisation must apply for an individual exemption using the full
notification procedure which can take at least 3-6 months.
Investigation into SAF policy in Sweden 36 looks further into the cases in which support for fuel
production is allowed under State Aid rules if an obligation is also present, citing precedent from cases
in Finland and Italy. It concludes that this is acceptable if:
•

•

The production cost of fuels from the plant is so high that it would not be competitive under
the obligation, compared with either price of fuels that would be supplied, or with a penalty
price, and
The aid would not give rise to significant undue adverse effects on the competition by
outcompeting fuels that had not received the support. This would be demonstrated by
showing that the plant's production capacity was small compared with the market demand,
and/or that the level of support had been set to avoid such effects. For example, this would
mean that the support should not cover the whole difference between the production cost
and the fossil jet price, but instead the difference between the production cost and the buyout or market price, subject to maximum levels of support under State Aid.

Further legal analysis of this topic will be needed to ensure that the policy mechanism(s) proposed to
support SAF are likely to meet State Aid requirements, and assess whether the full notification
procedure would be required.

Restrictions on trade
Article 34 of TFEU prohibits quantitative restrictions on trade between Member States, but as stated
in Article 63 this does not preclude restrictions justified on the grounds of “the protection of health
and life of humans, animals or plants”, as long as these do not “constitute a means of arbitrary
discrimination or a disguised restriction on trade between Member States”. This means that market-

33 2012 Consolidated version of the Treaty on the Functioning of the European Union https://eur-lex.europa.eu/eli/treaty/tfeu_2012/oj
34 C/2016/2946 Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the

European Union https://publications.europa.eu/en/publication-detail/-/publication/fc2abbdd-4d75-11e6-89bd-01aa75ed71a1/languageen
35
Article 41, Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal
market in application of Articles 107 and 108 of the Treaty, https://eur-lex.europa.eu/legalcontent/EN/TXT/HTML/?uri=CELEX:32014R0651&from=EN#d1e6306-1-1
36 SOU 2019 Biojet för flyget, Section 10.2, Available from :
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911

21

Renewable energy obligation for aviation in the Netherlands
based policies such as an obligation cannot preferentially support domestic production. The measures
should also be proportionate to the policy aim.

4.3 National
Climate policy
A 95% reduction target set for 2050 has been incorporated into the bill for the Dutch Climate Act
(Klimaatwet). Only emissions within the Netherlands, such as airport operations, are covered by this
target37. As a result, this will not present a conflict with fuels used in international flights.

Energy for Transport system
The first biofuel mandate in the Netherlands was introduced in 2007. This was an obligation on fuel
suppliers to supply at least 4% of their fuel, on an energy basis, from biomass by 2010. In 2011 the
mandate was raised to 4.25%38. As a consequence of the ILUC Directive, in 2018, the Dutch government
updated national obligations on biofuels. The new mandate for the transport sector aims to achieve
16.4% of the energy use from biofuels by 202039, including double counting. The delivery of biofuels
to the Dutch transport market generates tradable renewable fuel units, HBEs (Hernieuwbare Brandstof
Eenheden), which allow suppliers to demonstrate that they have met their biofuel obligations. One
HBE represents 1 gigajoule of renewable energy that has been delivered to the Netherlands transport
market. HBEs are divided into three types depending on the feedstock that has been used to produce
the biofuel40
•
•
•

HBE Advanced - advanced biofuels (Annex IX Part a of RED)
HBE Conventional - biofuels produced from agricultural and energy crops. The contribution
from food and feed crop based biofuels is limited to 3% in 2018, rising to 5% by 2020.
HBE Other – Annex IX part b feedstocks (waste cooking oils and animal fats), renewable
electricity, and other types of biofuels not in the categories above

A sub-target is applied to advanced biofuels starting at 0.6% in 2018 rising to 0.8% in 2019 and 1% in
2020 (including double counting). Liquid or gaseous renewable fuels of non-biological origin (RFNBOs)
are currently in HBE Advanced, and so count towards the sub-target for 2020. From 2022 onwards
RFNBOs will be counted as HBE Other, and will not count towards the advanced sub-target41.
HBE Advanced and HBE Other may double count towards the targets if a double counting declaration
is provided by the fuel supplier. This will be continued for Annex IX until RED II is implemented. From
January 2018 onwards, the obligated parties need to demonstrate that the feedstock used for
obtaining double counting status has not been intentionally modified so as to become eligible for
double counting.

37 CE Delft (2019) Biobrandstoffen in de Nederlandse luchtvaart
38 Dutch Emissions Authority, Available from : https://www.emissieautoriteit.nl/onderwerpen/algemeen-ev-2018/ontwikkelingen-ev-2018
39 Overheid.nl (2018), Besluit energie Vervoer, Available from: https://wetten.overheid.nl/BWBR0040922/2018-07-01
40 Dutch Emissions Authority, Available from : https://www.emissionsauthority.nl/topics/general---energy-for-transport/renewable-energy-

units
41 Source: Duurzame Mobiliteit. This is included in the proposal for the new version of chapter 9.7 in the Environment act that implements
REDII in Dutch legislation, which will be distributed for public consultation

22

Renewable energy obligation for aviation in the Netherlands
Obligated volumes are of petrol and diesel supplied to road, rail, non road mobile machinery,
agricultural and forestry tractors and recreational craft when not at sea 42 . Companies that have
delivered less than 500,000 litres of petrol or diesel on an annual basis are not obligated. The total
amount of fuel (including bio-components) that a company has delivered to transport destinations in
the Netherlands that are subject to an obligation, is known as the ‘taxed delivery for final consumption’
(Lte: levering tot eindverbruik). Companies register these fuel deliveries in the Energy for Transport
Registry. Obligated parties are those companies that have a license for an excise duty warehouse
(accijnsgoederenplaats) for mineral oils or are registered addresses for mineral oil importers43. There
were 38 obligated suppliers in 201844.
Fuels for the aviation sector are not currently obligated, but fuel suppliers supplying qualifying
sustainable aviation fuels can opt-in and benefit from the HBE trading scheme. To do this, the SAF
supplier registers the delivered biokerosene in the Registry and provides the proof of sustainability to
the NEa, who issue HBEs for the SAF45. The SAF supplier then sells the HBEs to obligated fuel suppliers,
and sells and supplies the SAF to the aviation market. The SAF is sold as normal fuel, without proof of
sustainability, i.e. the sustainability claim no longer applies to the SAF and cannot be further tracked
through the system. This decision was made in order to avoid the need for the chain of custody
requirements of the RED to be met further down the supply chain, and to avoid double claiming by
other . parties … Because of this, the end-user cannot claim the use of SAF, and so under EU ETS the
consumed SAF are considered as fossil fuels. The Netherlands is working on implementation of RED II,
including on whether the opt-in will be maintained post-2022. The chain of custody approach used for
a new SAF policy would not need to match that used under the opt-in.

Climate Agreement
The 2019 Climate Agreement46 agreed that there will be an additional amount of maximum 27 PJ of
renewable fuels used in the road transport sector by 2030, in addition to the estimated 33 PJ of biofuels
in all transport set out in the 2017 National Energy Outlook for 2030. For inland shipping another 5 PJ
of sustainable energy carriers (including hybrid electric, hydrogen and sustainable biofuels) has been
agreed upon in the Green Deal for Maritime shipping, inland shipping and ports.
The HBE system is being used as a way to account for renewable energy use in the road transport
sector, which is also translated into GHG savings for the purposes of the Climate Agreement, within
the national GHG budget. Given this, continuing to support SAF thorugh an opt-in to this system is
under review, as SAF use could not contribute towards these targets. The Climate Agreement also
announced plans for a sustainability framework for biomass used in all applications, to be developed
by March 202047.

42 Dutch Emissions Authority, Avaiable from: https://www.emissionsauthority.nl/topics/obligations---energy-for-transport/annual-

obligation
43 NL Government, Staatscourant van het Koninkrijk der Nederlanden , Article 3, Available from :
https://zoek.officielebekendmakingen.nl/stcrt-2018-34392.html
44 Dutch Emissions Authority, Available from : https://www.emissieautoriteit.nl/onderwerpen/rapportages-ev2018/documenten/publicatie/2019/07/03/rapportage-energie-voor-vervoer-in-nederland-2018
45 SkyNRG, Available from : https://skynrg.com/wp-content/uploads/2019/03/Publications-The-voluntary-RED-opt-in-for-aviationbiofuels.pdf
46 NL Government (2019) Climate Agreement, Available from : https://platformduurzamebiobrandstoffen.nl/wpcontent/uploads/2019/10/2019_NL-GOV_NationalClimateAgreementTheNetherlands_190628.pdf
47 Uitwerking afspraken Klimaatakkoord over duurzame biomassa
https://www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2019Z14515&did=2019D29767

23

Renewable energy obligation for aviation in the Netherlands

4.4 Conclusions
Review of international, EU and national policies shows that:
•

•

•

Interaction of international policies and regional and national policies related to SAF are still
under discussion. However, aside from a restriction on placing taxes on fuels, international
policies do not appear to present a barrier to a SAF obligation in the Netherlands, or place
particular requirements on the form of the obligation.
European policy requires that obligations or financial support for biofuels follow the
sustainability criteria set out in the Renewable Energy Directive (RED II), even if the fuels are
not counted towards RED II targets. State Aid rules are also important: these limit the options
for support of crop-based biofuels, and allow additional support alongside an obligation only
for fuels with high costs and where competitive impacts can be avoided.
There are existing policies and agreements in the Netherlands to support supply of renewable
fuels, including SAF. Although there will be interactions between markets for renewable fuels
in different sectors, existing policies and agreements do not restrict the options for a new SAF
policy. .

24

Renewable energy obligation for aviation in the Netherlands

5 Choice of policy mechanism
Summary
•

•

•

•

An EU-wide obligation would reduce competitive distortion and carbon leakage, however is
likely to be challenging to implement and unlikely to be implemented in the short-term. As
a result, this chapter focuses on the design of a Netherlands SAF obligation.
A blending obligation provides the highest level of assurance that the 14% target will be
met, and is also the only option possible if food and feed crop-based biofuels are to be
supported. Alternatively, direct financial support for SAF use would provide a reasonable
level of assurance that a 14% blend of SAF in aviation can be achieved.
Practically, there are no substantial barriers to implementing a blending obligation.
However under an obligation, additional policies to mitigate cost impacts would be limited
to certain fuels due to State Aid rules.
Supply or demand side policy support could be used as well as, or instead of an obligation.
A payment for SAF use could be constructed to give reasonable level of confidence of the
target being met, with an advantage of this option being the ability to split the costs of
compliance between industry and government if desired.

5.1 Aims of the policy
The high-level aim of the policy mechanism under consideration is to meet the target of at least 14%
sustainable aviation fuel used in the Netherlands by 2030. We have defined a number of other aims
that the policy should also fulfil:
•
•
•
•
•
•

Be cost-effective
Ensure high standards of sustainability
Promote increasing sustainability and GHG savings
Reduce the risk of indirect environmental impacts such as carbon leakage
Reduce the risk of negative economic and social impacts for the Netherlands
Support the production of renewable aviation fuel in the Netherlands

These are considered in this chapter, on the type of policy mechanism, but also in Chapters 6,7,8 and
9 which consider in more detail supply options, sustainability, production in the Netherlands and
economic impacts.
Policies for supporting the uptake of renewable aviation fuel can broadly be categorised as either
‘supply side’ or ‘demand side’ measures. Supply side policies are those that aim to support the
production of sustainable aviation fuel, and demand side policies are those that aim to create demand
for sustainable aviation fuel. Note that the range of options for providing a payment for production is
discussed under demand side policies.
The cost of producing SAF is currently several times higher than the cost of producing fossil kerosene,
and it is anticipated to remain more expensive over the coming decades (see section 9). Many, though
not all, airlines are unwilling to pay more for SAF than fossil kerosene. Consequently demand for SAF
is limited. Therefore the main focus of this section is on policies which can stimulate demand for SAF

25

Renewable energy obligation for aviation in the Netherlands
(section 5.3), and in particular on a blending obligation (section 5.4). Supply-side policies which could
be complementary to these measures are briefly described in section 5.2.

5.2 Supply-side measures
There are a number of supply-side measures which could be implemented in order to increase the
production of SAF, and these are reviewed in Table 1. Some supply-side support measures are already
in place or will shortly be introduced, although not all of these will necessarily support SAF. Examples
include €30M for pilot and demonstration projects accelerating CO2 emissions reductions, Invest-NL,48
the Demonstration scheme for climate technologies and innovations in transport (DKTI) 49 , and a
potential €50bn investment fund to support economic growth 50 . The draft Sustainable Aviation
Agreement (2019) highlights that a new guarantee facility for SAF producers would be desirable, and
expresses the wish to carry out two multi-year demonstration projects in the period up to 2025, for
each of which a contribution of €25 - €35 million is requested. .
None of these measures provide a high level of assurance that a 14% blend level will be achieved,
therefore they are not considered in detail in this study, but could be complementary to a blending
obligation as discussed in section 5.4.12. An important advantage of these supply-side measures,
compared to a blending obligation, is that they can be specifically targeted towards producers of SAF
based in the Netherlands, although this does not guarantee that the SAF would be sold into the NL
market. In addition, there are other possible measures not listed below which could support
technologies at earlier stages, such as RD&D funding, or parts of the supply chain, such as waste policy
or support for energy crop cultivation. Successful commercisation of new technologies is likely to
require a combination of these approaches in addition to support for the final product (through an
obligation or payments).

48 PWC (2019) Available from: https://www.pwc.nl/en/insights-and-publications/tax-news/pwc-special-budget-day/sustainability-business-

and-innovation.html
49 MKSubsidy, Available from: https://www.mksubsidy.com/subsidies/demonstration-scheme-climate-technologies-and-innovations-intransport-dkti/
50 Rabobank (2019) Dutch Investment Fund, Available from: https://economics.rabobank.com/publications/2019/august/dutchinvestment-fund/ Accessed 8/11/2019

26

Renewable energy obligation for aviation in the Netherlands
Table 1 Policy measures which could be used to stimulate supply of SAF

Policy measure

Explanation

Example of where this has been used
in other country / sector

Demonstration
plant funding –
loans or grants

Low cost loans or grants can help to
finance plants which are seen as risky
by other investors. Even if the grant /
loan is a small percentage of the total
project finance it can demonstrate
government support and therefore
help developers to secure other
investment.
Government loan guarantees can
enable plants to access finance from
conventional lenders which would
otherwise consider the project too
risky.
Funding is awarded once a goal has
been reached or a challenge has been
overcome

UK Future Fuels for Flight and Freight
(F4C) competition

Plant financing
guarantees

Prize

USDA Biorefinery, Renewable
Chemical, and Biobased Product
Manufacturing Assistance Program

Virgin Earth Challenge

5.3 Demand-side measures
Currently there is low demand for sustainable aviation fuel because its production cost is substantially
higher than fossil kerosene. Demand-side measures aim to increase demand for renewable aviation
fuel, by either requiring a certain amount of SAF to be blended into fossil kerosene, or by providing a
cost incentive to blend SAF into kerosene. Table 2 reviews the key policy measures for stimulating
demand for SAF, and assesses their likelihood of meeting the 14% target.
Table 2 Policy measures which could be used to stimulate demand for SAF

Policy
measure

Explanation

Likelihood of meeting the 14% target

Carbon pricing

A fee is charged for every tonne of
CO2 emitted by the aircraft.
Renewable aviation fuels pay zero / a
reduced fee to reflect lower CO2
emissions than fossil kerosene.
Analagous to the EUETS.

Tax
exemptions –
passenger or
flight tax

A tax per passenger or per flight is
imposed on airlines, which is waived
or reduced if the flight uses SAF
(such a tax does not yet exist in the
NL but is under consideration).

Could provide sufficient cost incentive to
make SAF cost competitive with fossil
kerosene if the fee is high enough. As
other measures could also be used to
reduce aircraft CO2 emissions this does
not ensure that the SAF target will be
met.
Could provide sufficient cost incentive to
make SAF cost competitive with fossil
kerosene if the differential in the tax is
high enough. Airline is incentivised to use
SAF but there is no requirement for SAF

27

Renewable energy obligation for aviation in the Netherlands

Differentiated
airport fees

Airport fees are reduced / waived if
the flight uses SAF

Payment for
SAF use

A payment is provided for every unit
of SAF that is used. There are several
possible options for the design of the
policy: funding could be through an
industry levy or through general
taxation; distribution could be either
on the basis of per unit of fuel
supplied or as part of a pre-agreed
arrangement. These options are
described in more detail below.
Aviation fuel procured directly by the
government (e.g. by the military) is
renewable.

Public
procurement

Cap on fossil
jet uplift in NL

Fossil jet uplift is limited to a fixed
level, with SAF exempt from the cap

Blending
obligation

An actor along the kerosene supply
chain (e.g. fuel supplier or user) is
required to blend in a certain
quantity of SAF.

use, so low assurance that 14% target
will be met.
Could provide sufficient cost incentive to
make SAF cost competitive with fossil
kerosene if the differential in the fees is
high enough. The airline is incentivised to
use SAF but there is no requirement for
SAF use, so low assurance that 14%
target will be met.
If the price provided is high enough it will
cover the cost differential between SAF
and kerosene. The support scheme could
be designed so that a reasonable level of
assurance is provided that the 14% target
would be met.

Public procurement, for example through
a scheme similar to SkyNRG’s Board Now
programme51 or KLM’s Corporate Biofuel
Programme, could guarantee that a
certain volume of renewable fuel is used
in aviation. However the volumes of fuel
procured directly by the government are
low compared to fuel used in commercial
flights, and the 14% target from the
Sustainable Aviation Roundtable only
applies to civil aviation.
Uncertain whether 14% target would be
met as relies on projections of industry
fuel consumptions, and would be highly
complex to administer
Provides the highest level of assurance
that a 14% blend of SAF in aviation
kerosene will be met.

The term ‘support for SAF use’ in Table 2 is used to generally refer to schemes which pay the SAF user
directly for every unit (e.g. tonne or litre or MJ) of fuel that they use. In order to ensure that the scheme
51 SkyNRG (2019) Board now leads the way towards sustainable flying, Available from: https://skynrg.com/press-releases/board-now-leads-

the-way-towards-sustainable-flying/

28

Renewable energy obligation for aviation in the Netherlands
increased the volume of SAF used in the NL, the payment would need to be to the user or supplier of
SAF, rather than the producer. This concept covers a number of policy design options:
•

•

•

Different ways of funding the payment:
o Industry levy, such as a passenger or flight tax (e.g. SDE+ is funded in this way)
o General taxation
Options for distribution:
o A payment is provided to every unit of SAF used in NL (e.g. feed-in-tariff for renewable
electricity)
o A pre-agreed arrangement with the government determines the price and volume of
fuel to be supplied. (e.g. as is done in SDE+ and in the Contracts for difference scheme
used to support renewable electricity in the UK)
Different way to set the basis of the payment:
o Fixed payment per unit of fuel supplied
o Fixed payment per unit of fuel supplied, differentiated according to fuel types or
production process
o Payment is given based on the differential between the wholesale kerosene price and
a ‘strike price’. The strike price could be set in a number of different ways, e.g. set by
the government, agreed bilaterally between government and SAF producers, or
agreed competitively through a reverse auction.

Currently, this type of support is given for electricity, gas and heat under the SDE+ scheme, (Stimulering
Duurzame Energieproductie), an operating grant for renewable energy producers that covers the
difference between the cost and the market price for a fixed number of years. The Dutch Climate
Agreement supports supply side measures for advanced biofuels, and will reserve 200 million euros,
which it intends to use to increase the production and innovation of sustainable advanced biofuels and
renewable synthetic biofuels. The government will assess which instruments are most suitable and will
not commit these funds before 2020. This includes the SDE++ (Stimulation of Sustainable Energy
Transition) scheme, which is in development52, within which technologies will compete based on their
GHG savings rather than energy generated. It has not yet been decided which technologies will fall
under the SDE++, but inclusion of advanced biofuels is under discussion. According to the Climate
Agreement, supported production would be in addition to RED II requirements.
Note that there are barriers to inclusion of SAF under the SDE++ scheme: the SDE++ scheme was
conceived to deliver GHG savings to the Netherlands, which would not be possible for SAF. In addition,
there are already questions in the Netherlands about giving support to advanced biofuels production
that is already incentivised by an obligation, on the grounds that additional GHG savings are not being
made. As a result of these factors, if this approach were to be used, a separate scheme for SAF could
be preferable. This would also provide the option to tailor the policy specifically to the SAF industry.
However, given that many companies producing SAF may also be producing road transport fuels, and
therefore be interested in both schemes, a combined scheme or very close alignment may be needed
to enable bidders to bid into both in order to make a viable business case, and may be easier to manage
for government.
52 Stek, January 2019, Broadening subsidy scheme for renewable energy: from SDE+ to SDE++

https://webcache.googleusercontent.com/search?q=cache:oHPpF4i7YLMJ:https://www.lexology.com/library/detail.aspx%3Fg%3D0a5240
02-d2ac-4026-8706-8915e96e8f6d+&cd=1&hl=en&ct=clnk&gl=uk&client=firefox-b-d

29

Renewable energy obligation for aviation in the Netherlands

5.3.1 Comparison of blending obligation and direct payment for SAF use
The assessment in Table 2 identifies a blending obligation and a direct payment for SAF use as the two
demand-side measures most likely to meet the 14% target. Both measures are commonly used to
increase the use of renewable energy within a particular sector. For example:
•
•

the HBE scheme in the Netherlands and the Renewable Fuel Standard (RFS) in the USA are
both examples of blending obligations for the road transport sector.
The UK’s Contracts for Difference scheme, and the Netherlands’ SDE + are direct payment
schemes for renewable power. The Renewable Heat Incentive (RHI) in the UK provides a
direct payment for every unit of biomethane injected into the gas grid for use in heating.

These two measures are compared in more detail in Table 3, with further discussion below of some
potential challenges to implementing these measures to support SAF use in NL.
Table 3 Comparison of blending obligation with direct payment for SAF use

Blending obligation
Types of fuels
which could be
included in
measure
Sustainability

Strength of
signal to SAF
industry, i.e.
driver for
capacity growth
Bearer of cost
impact

Level of cost
impact

Direct payment for SAF use

Can apply to all types of SAF. However Support may not be given to foodany other policy mechanisms, when based biofuels, but any other fuel
introduced alongside a blending types can be supported in the
obligation, are limited in the types of absence of a blending obligation.
fuels that can be supported (see 5.4.12).
Sustainability requirements in RED II in Article 29 apply to fuels under a blending
obligation, or financial support for their consumption. Some interviewees were
concerned that an obligation would encourage import of unsustainable fuels however there is no reason this should be the case if sustainability crtieria are
applied to fuel from any source.
Clear bankable signal of a future market Depends on scheme design, but
to all industry players. This has been generally weaker than an obligation.
demonstrated
through
increased Multiple rounds, with fixed volumes,
interest in advanced biofuels since announced at the outset, needed to
agreement of advanced biofuel targets give future market confidence, and
in RED II.
attract new entrants to the sector.
Costs are borne by the industry. Likely Costs can be spread across both
that most costs are passed on to industry and government. If an
customers, but strategy for doing this is industry levy were used it could be
determined by airlines. Measures could designed to minimise impacts on the
be introduced to mitigate cost impacts, most price-sensitive customers. If
but as these could not support waste- government funded will need to
based HEFA, limited potential to reduce justify level of support compared
costs to industry in the near term.
with other sectors
Initial high price of fuel as volumes are Initial high price of fuel as volumes
low. Continuous competitive market will are low. If costs are fixed at these
drive down prices as new players enter, levels for early funding rounds,

30

Renewable energy obligation for aviation in the Netherlands
but limited by prices available in the road
sector, and may be counteracted by
increasing feedstock costs in the future
(see section 9.1.1)
Support for NL
Under state aid rules could not
production
preferentially
support
NL-based
production.
Ease of
Target levels need to reflect realistic
implementation assumptions for the speed of capacity
growth in response to the mandate,
including new entrants, so that the
obligated parties are able to source
required quantities

overall costs likely to be higher than
with an obligation.

Potential to preferentially support
NL-based production (but would
need mechanism to ensure use in NL)
May be limited number of bidders in
early rounds and so limited
competition. Difficulty in fixing
appropriate level of support for fuels
with high and variable feedstock
costs (compared with when this
measure is used in electricity sector)

Of the policy measures reviewed in Table 2 and Table 3, the blending obligation is the option that
provides the highest level of assurance that a 14% SAF blend in kerosene used in the Netherlands will
be achieved. It provides the clearest signal to the industry, and a driver for continuous cost reduction.
It is also the only option possible if the decision is made to support food and feed crop-based biofuels
(see section 7.2), as State Aid rules prohibit any financial support for food and feed based biofuels.
Nevertheless, some of the other policy measures could reduce the price differential between kerosene
and SAF, and hence could be considered as ways to partially finance a blending obligation.
Alternatively such policy measures could be used instead of a blending obligation if crops were
excluded, but without a blending obligation, the level of assurance of meeting the 14% target would
be lower. Therefore in sections 5.4.1 to 5.4.10 we will consider the specific policy design aspects of a
blending obligation. All of the other supply-side or demand-side measures could be used alongside a
blending obligation, although there are limitations on the fuels which can be supported, which are not
present if these measures are used without a blending obligation. This is discussed in section 5.4.12.

5.4 A blending obligation
The options for the design of a renewable aviation fuel blending obligation in policy are discussed in
section 5.4.2 to section 5.4.13. Each option is assessed in terms of a number of key metrics. Only those
metrics from the following list which are most relevant or which are differentiators are considered for
each option:
•
•
•
•
•
•
•
•
•

Legal position
Economic efficiency
Wider impacts (positive or negative)
Flexibility for businesses
Ease of implementation for government
Potential to encourage technology innovation
Potential to ensure production is in NL
Ability to ensure sustainability
Likelihood of meeting the target

31

Renewable energy obligation for aviation in the Netherlands
•
•

Risk of emissions leakage
Certainty for investors

5.4.1 Potential response to a renewable aviation fuel blending obligation
A renewable aviation fuel blending obligation will raise the cost that an airline must pay for fuel, and
this is likely to be transferred on to passengers (see section 9). There are a number of possible
responses from airlines, passengers and markets to these higher costs. These are described in Table 4,
along with a qualitative assessment of whether they are likely to result in GHGs decreasing or
increasing (carbon leakage) 53 . The economic impact for different stakeholders of these potential
responses to a blending obligation are considered in section 9. Where policy design choices considered
in section 5.4.2 to section 5.4.13 may impact the likelihood of these responses occurring, this has been
taken into account.
Table 4 Potential responses to a blending obligation

Response

Explanation

Impact on
overall GHGs

Demand
reduction
Mode-switching

As higher fuel costs are passed onto passengers, some
passengers choose not to travel
As higher fuel costs are passed onto passengers, some
passengers choose to travel by other modes of transport
instead. These generally have lower GHGs per km than flying
Fuel tankering is the practice of carrying more fuel than is
required for one flight in order to reduce or avoid refuelling at
a destination airport. Fuel tankering is already a widespread
practice within the industry to minimise refuelling costs (it is
estimated that in the EU fuel tankering is performed on 15%
of flights and partial tankering on a further 15% of flights).54
Increasing fuel costs at some airports could increase the
amount of fuel tankered.
Instead of flying through airports where a SAF obligation is
imposed on the kerosene, passengers may travel on routes
through alternative airports, leading to more of these flights
operating over time. This is particularly applicable in the case
of transfer flights, where an alternative stopover airport could
be used with minimal impact on the passenger.

GHGs
decrease
GHGs
decrease

Tankering

Alternative
routes

GHGs increase
(due to
avoidance of
SAF use and
impact of
carrying
additional
fuel)
GHGs increase
(due to
avoidance of
SAF use and
potentially
longer flight
distances)

5.4.2 Geographic scope of obligation
Only a global policy could avoid any carbon leakage, by applying to the whole aviation sector. This was
the rationale behind the development of CORSIA. In the longer term, a stronger global policy to support
53

Carbon leakage refers to the situation that may occur if, for reasons of costs related to climate policies, businesses transfer activities to
regions outside the jurisdiction of the policy, resulting in an increase in their total emissions (Adapted from European Commission
(https://ec.europa.eu/clima/policies/ets/allowances/leakage_en))
54 EUROCONTROL Aviation intelligence unit (2019) Fuel tankering in European skies: economic benefits and environmental impact,
Available from: https://www.eurocontrol.int/publication/fuel-tankering-european-skies-economic-benefits-and-environmental-impact

32

Renewable energy obligation for aviation in the Netherlands
SAF, either through tightening of CORSIA requirements or an alternative policy mechanism is seen as
preferable by many industry players. However, given the time taken to agree the CORSIA agreement,
the speed at which it will be implemented, and the challenges of securing global agreement on aspects
of the policy such as sustainability, a revised or new global policy is not likely to 2030. As a result, a
global obligation is not considered further here. This section considers whether a blending obligation
should be imposed either on fuel used in the Netherlands or across the whole EU, termed the
geographic scope of the obligation.
The geographic scope of an obligation has an important impact on the likelihood of demand shifting
to alternative routes, and tankering. Both of these responses to an obligation have negative GHG
impacts (section 5.4.1), and shifting demand to alternative routes can impact on the competitiveness
of airlines based within the geographical scope of the obligation (section 9.2).
These impacts are likely to be different depending on the geographic profile of the flight. Flights are
broadly classified as origin and destination (O&D) for passengers flying directly between two points,
or transfer flights for passengers taking a connecting flight. For clarity and consistency, the use of these
terms within this study are given in Table 5. Transfer flights which have a stopover outside of the EU
are not specifically considered in this study, they are assumed to be impacted in the same way as ExtraEU O&D flights.
Table 5 Terminology used within this study

Departure
region
EU
EU
RoW
EU
EU
RoW
RoW

Stopover region
→
→
→
→
→
→
→

N/A
N/A
N/A
EU
EU
EU
EU

→
→
→
→
→
→
→

Arrival region

How referred to in this
study

EU
RoW
EU
EU
RoW
EU
RoW

Intra-EU O&D flight
Extra-EU O&D flight
Extra-EU O&D flight
Intra-EU transfer flight
Extra-EU transfer flight
Extra-EU transfer flight
Extra-EU transfer flight

Advantages of an EU-level obligation
An EU-level obligation would reduce the risk of passengers travelling through alternative routes where
a blending obligation is not in place. This risk would be substantially reduced for O&D passengers, and
partially reduced for transfer passengers.
•

•

O&D passengers: under national obligations, intra-EU and extra-EU O&D passengers may be
able to travel by other transport modes into neighbouring EU MSs which do not have an
obligation to make a similar journey (e.g. instead of flying from Amsterdam to Istanbul a
passenger can travel by train from Amsterdam to Brussels and then fly from Brussels to
Istanbul). Under an EU policy there would be very little opportunity for passengers to do this.
Transfer passengers: under national obligations, intra-EU and extra-EU transfer flight
passengers may be able to use another hub airport in a non-obligated MS (e.g. instead of flying
from Exeter to Amsterdam to Mumbai a passenger could fly from Exeter to Paris to Mumbai).
These transfer passengers are particularly sensitive to price increases as it does not matter to
them where the transfer occurs, so they can search for the lowest-cost option. Under an EU-

33

Renewable energy obligation for aviation in the Netherlands
wide obligation the transfer could be shifted entirely outside of the geographic scope of the
obligation in order to avoid the obligation, for example to the Middle-East or to countries near
to the EU which do not implement an obligation e.g. Switzerland.
An EU-level obligation would also reduce the likelihood of fuel tankering. Under an EU-level obligation,
airlines would not be able to avoid compliance costs by tankering fuel on intra-EU flights. There may
still be some tankering on extra-EU flights.
Options for an EU-level obligation
There are two main regulatory options for an EU-level obligation:
1. An EU-level directive requiring SAF targets within each MS, which is implemented by Member
State legislation, similar to the Renewable Energy Directive (RED). Whilst the key principles are
harmonised at EU level, MSs can transpose the Directive in different ways. This can result in
differences between MSs in exactly how the policy is implemented, as is currently the case
with implementation of the RED55. Alternatively, a Regulation could be introduced requiring
MSs to set individual mandates, meaning no option for national interpretation.
2. Introduction of an EU-wide obligation with compliance possible anywhere in the EU, with all
rules harmonised between MS, such as the EU ETS. Intra-EU flights are already covered under
the EU-ETS, but the cost of compliance with the EU ETS is not sufficient to overcome the higher
cost of SAF compared to kerosene, so the EU ETS is not driving any SAF use in aircraft.
Therefore in order for such a scheme to result in SAF supply it would likely have to be specific
to the aviation sector and have a higher cost of compliance than under the EU ETS.
An EU-wide obligation, rather than separate national obligations, would reduce the risk of having a
‘patchwork’ of different schemes across different MSs which could have different targets,
sustainability criteria and administrative requirements. The transposition of the RED, which has
resulted in different administrative schemes in each MSs with varying rules on feedstocks, the level of
the target and sub-targets for specific fuels, illustrates that option 1 will not necessarily result in
complete coherence between MSs. However, an EU-wide obligation allowing trading between MSs
may not ensure the target for 14% SAF use in the Netherlands is achieved.

Is an EU-level obligation feasible?
Whilst the majority of interviewees agreed that an EU-level obligation would be preferable to one
imposed by a single MS, EU-level policy options are at an early stage of discussion by the Commission
with further details anticipated in the Green Deal on the 11th December. Despite interest in a EU level
option, it may take several years for an EU-level policy to be agreed and implemented. The main
potential barriers to an EU-level obligation are considered to be:
•
•

The challenge of securing agreement from all EU MSs
The required level of SAF supply, unless the level of the obligation were very low

55 ePURE (2018) European Renewable Ethanol: overview of biofuel policies and markets across the EU-28, Available from:

https://epure.org/media/1758/180903-def-rep-overview-of-biofuel-policies-and-markets-across-the-eu-28.pdf

34

Renewable energy obligation for aviation in the Netherlands
•

The potential for international disputes or legal challenge, which some interviewees
considered may be greater if action were taken at EU level than in individual MSs, drawing
parallels with the discussions over perceived conflict between CORSIA and the EUETS

The Netherlands could therefore focus on supporting an EU-level obligation. However this is unlikely
to be introduced before 2025 and indeed may not be introduced at all. An interim EU-wide measure
covering key hub airports only could be administratively easier to introduce, but would still require
agreement between Member States.
Conclusion:
An EU-wide obligation would likely entail a lower risk of tankering and flights shifting to alternative
routes compared to a NL obligation, however is likely to be challenging to implement and unlikely to
happen in the short-term. Even if an EU-wide obligation were implemented, it does not provide strong
assurance that the 2030 target for SAF in NL aviation will be met. Therefore the rest of this section
focuses on the design of a Netherlands SAF obligation. The introduction of an obligation in the
Netherlands does not preclude the Netherlands from later taking part in an EU-wide obligation,
although might entail some changes in order to harmonise the two schemes. With this in mind, it would
be advisable to match the requirements of a Dutch SAF obligation with schemes introduced by other
MSs.

5.4.3 Obligated fuel
The target laid out in the Draft sustainable aviation agreement applies to all fuel uplifted in the
Netherlands for civil aviation, regardless of whether it is used for commercial or private use. Concerns
were voiced by some interviewees about the requirement for SAF to be physically supplied in the
Netherlands as it may cause unnecessary cost and CO2 impacts from importing fuel, compared to just
using the same volume of aviation fuel in its country of production. However to meet the target laid
out in the draft sustainable aviation agreement the obligation would need to be imposed on fuel
physically supplied in NL, and would need to require the SAF to be physically supplied in NL or through
pipelines that supply NL if a book and claim system is allowed. The agreement also aimed to stimulate
production in the Netherlands.
Some interviewees also suggested that the obligation should only be imposed on fuel used for O&D
flights, in order to avoid imposing competitive disadvantage on transfer flight operators. Transfer
passengers are considerably more price sensitive than O&D passengers, and for this reason many
studies exclude the possibility of imposing additional costs on transfer passengers. SEO (2018) 56
consider two scenarios where a flight tax was limited only to O&D passengers, and a third scenario
where it is applied to both O&D and transfer passengers depending on the maximum take-off weight
(MTOW) of the aircraft. Under the third scenario where the tax is applied to both O&D and transfer
passengers, the total number of O&D passengers decreases by 2% whereas the total number of
transfer passengers decreases by 5%.
Limiting the obligation to fuel only used by O&D passengers would be administratively complicated as
flights would contain both transfer and O&D passengers and the fuel use would have to be apportioned
56 SEO (2018) Effecten van een nationale vliegbelasting, Available from: http://www.seo.nl/uploads/media/2018-

99_Effecten_van_een_nationale_vliegbelasting_in_2025.pdf

35

Renewable energy obligation for aviation in the Netherlands
between them. Limiting an obligation only to intra-EU flights was proposed as a more straightforward
option to avoid imposing costs on transfer passengers, but this would also place many intercontinental O&D flights outside the obligation. Moreover if the obligation was only limited to fuel used
by O&D passengers, it would have to be higher than 14% in order to ensure that the overall target of
14% SAF in aviation fuel is met. Therefore the obligation is assumed to be imposed on all fuel uplifted
in NL.
It may be appropriate to exempt from the obligation fuel used for some specific purposes in order to
not pass on additional costs to these parties, or because the aircraft used are not compatible with SAF.
Under CORSIA, humanitarian, medical, and firefighting flights are exempt, as well as aircraft with a
maximum take-off weight (MTOW) of less than 5.7tonnes.57
‘State flights’, which include “aircraft used in military, customs, and police services” and specific flights
carrying official government representatives are also exempt from CORSIA, as ICAO only covers civil
aviation. As the draft sustainable aviation agreement target of 14% only applies to civil aviation,58 the
blending obligation could exclude fuel used on state flights if required.

5.4.4 Obligated parties
Airlines typically buy fuel through a contract with a fuel supplier. Currently at Schiphol airport, fuel
supply can only occur via companies within the AFS consortium: Air BP, Air TOTAL, Chevron Aviation,
Shell Aviation, Q8 Aviation, Statoil Aviation, Vitol Aviation, and KLM.59 KLM is the only airline within
the AFS consortium, therefore KLM can purchase and deliver their own fuels, whereas other airlines
have to purchase fuel through one of the eight companies in the AFS consortium. Other Dutch airports
are typically supplied by only one fuel supplier, and whilst supply by other companies is in theory
possible, interviewees suggested that this would be unlikely.
The two principal options for imposing an obligation are either on the airline or on the supplier of the
fuel.
Two other options not considered further are:
•

•

Airports - Airports do not buy and sell fuel themselves directly. If an obligation were imposed
at airports, they would have to pass it on directly to the fuel suppliers or the airlines in order
to comply with the obligation.
Airport fuel handlers - Aircraft Fuel Supply BV (AFS) is a consortium of companies including
seven fuel suppliers to Schiphol and KLM airlines. AFS manages the refuelling infrastructure
for Schiphol but does not directly buy and sell fuel.

In this section we discuss the main factors that affect the suitability of airlines and fuel suppliers to be
the obligated party, and how other schemes have defined the obligated party, to conclude on whether
airlines or fuel suppliers should be the obligated party in the case of a NL blending obligation.
Number of obligated parties:

57

CORSIA (2019) The second edition of the Environmental Technical Manual (Doc 9501), Volume IV — Procedures for demonstrating
compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) (Available from:
https://www.icao.int/environmental-protection/CORSIA/Pages/ETM-V-IV.aspx)
58 Aviation Roundtable (2019) Draft sustainable aviation agreement
59
CAPA Centre for Aviation (Available from: https://centreforaviation.com/data/profiles/airports/amsterdam-schiphol-airport-ams)

36

Renewable energy obligation for aviation in the Netherlands
Obligating a fuel supplier would impact less than 10 companies. Most of these companies already
supply the road transport sector and therefore have experience of fuel obligation schemes, albeit in
different business units from their aviation fuel supply business unit.
Over 100 airlines fly in and out of Schiphol airport, therefore obligating airlines would result in
significantly more obligated parties than obligating fuel suppliers.60 If this number of obligated parties
is likely to prove an administrative challenge for the government it would be possible to introduce an
exemption for airlines which uplift less than a certain volume of fuel (or fly few flights from the
Netherlands) so that the number of obligated parties would be limited whilst still covering the vast
majority of fuel uplifted in the Netherlands. This exemption would also prevent the obligation falling
on airlines which make emergency or unplanned landings at Schiphol. However, the exemption would
increase competitive distortion between obligated and non-obligated airlines.
Point of obligation:
If the obligation is imposed on airlines the most likely control point for measuring the volume of
obligated fuel is the point at which refuelling takes place, at the wing of the aircraft. The amount of
fuel taken on by the aircraft is recorded in order to charge the airline for the fuel delivered. These
records could be used to verify the volumes of obligated fuel reported by each airline. A challenge to
this approach perceived by some interviewees is that once the fuel enters the airport supplies are comingled,. However this is not a barrier, as the contract between the airline and the fuel supplier would
specify the volume of SAF purchased by the airline, so this could be used to verify how much SAF the
airline has purchased, even if that volume of SAF has not physically been delivered to their planes.
Moreover, airlines will be required to collect information on the volume of fuel that they use in order
to report under CORSIA. An obligation on airlines should use this information if possible in order to
avoid duplicating work for the airlines. The information that must be transferred by the airlines to the
European Commission for the monitoring of emissions under both CORSIA and the EU-ETS using the
dedicated monitoring plan template could be used to verify the fuel volumes reported to the Dutch
government under a NL blending obligation.
If the obligation were imposed on fuel suppliers, the control point could also be the point of refuelling,
using the contract between airline and fuel supplier to determine the volume of fuel from each
supplier. If the obligation were imposed on fuel suppliers there could also be other options for the
control point, further back in the supply chain. Under the obligation scheme proposed for Sweden, the
obligation is imposed at the point of taxation of the fuel known as a ‘tax warehouse’, which for jet fuel
corresponds to registration for a tax exemption. Under the HBE scheme, the obligation is imposed at
the taxation point of the fuel. Interviewees considered that a control point at the plane would also be
most suitable.
Using a control point at the plane would require sustainability certification to be obtained for the
pipelines serving airports. As mass-balance of renewable fuel is allowed under the HBE scheme this is
not anticipated to be a substantial challenge within the Netherlands, but could be more challenging
for pipeline systems which run between multiple countries.
Cost:

60

Schiphol,Available from: https://www.schiphol.nl/en/airlines/

37

Renewable energy obligation for aviation in the Netherlands
There was concern from some interviewees that if the fuel suppliers were obligated then airlines might
face a substantial increase in the price they would have to pay for fuel. Interviewees suggested that if
the obligation was on the airlines themselves then they could either purchase SAF from fuel suppliers,
or purchase SAF directly from SAF producers, and therefore would not be so vulnerable to high prices
imposed by fuel suppliers. Several other interviewees disagreed with this view, on the grounds that in
a short market, high SAF prices would be as a result of the SAF producers’ ability to charge large
margins. These high prices would be passed on to the airlines irrespective of whether the obligation
was on a fuel supplier or airline. Airlines also have the ability to choose between different fuel
suppliers, who will compete to supply at the lowest price. Moreover, it is not clear whether airlines
which are not part of the AFS consortium would in practice be able to source SAF directly, so even if
the obligation is on the airlines they may still be forced to purchase blended SAF from fuel suppliers.
Therefore whilst there is a perception from airlines that they would be able to meet the obligation in
a lower-cost way if the obligation were placed directly on airlines, there is limited evidence to suggest
this would be the case.
Sustainability:
Airlines were concerned that if the fuel suppliers were obligated, the airlines may not have control
over the type of SAF provided, particularly if the sustainability characteristics required by the obligation
were not as stringent as their own internal sustainability standards. This could be mitigated if the
airlines specify in their request for tender that the fuel they purchase must only contain SAF that meets
certain sustainability characteristics. Fuel suppliers would be likely to charge a premium for SAF
meeting more stringent sustainability requirements than the minimum set by the policy, but this would
be true whether or not the airline or fuel supplier were obligated. Depending on the chain of custody
rules, supplying SAF meeting different sustainability criteria to different airlines may be practically
difficult and therefore expensive.
Obligated party under other schemes:
•
•

•
•

The HBE system obligates fuel suppliers
The proposal for a blending obligation in Sweden suggests it should be implemented at the
point of tax liability (which in the case of jet fuel is a tax deferral), which normally falls on the
fuel supplier
The proposed blending obligation in Spain would be imposed on the fuel supplier
The Norwegian obligation will be imposed on the fuel supplier

Overall:
Whether the obligation is imposed on either the fuel supplier or the airline, the cost burden ultimately
falls on the airline. There are not substantial challenges associated with either approach. An obligation
on fuel suppliers would maintain consistency with the proposals of other European countries,
therefore could facilitate easier integration of a Dutch blending obligation with a future EU-wide
blending option.

38

Renewable energy obligation for aviation in the Netherlands

5.4.5 Links with the HBE system
The Netherlands has allowed renewable fuel used in the aviation sector to be eligible for HBEs since
2015 61. Suppliers of aviation fuel are not obligated but they can receive HBEs for the supply of SAF.
However today the volumes of renewable aviation fuel supplied remain low.
When imposing an obligation on the aviation sector this could either be done by bringing aviation fuel
within the HBE scheme, or by creating a separate aviation fuel obligation scheme. If aviation fuel is
brought within the HBE scheme this could be done in three different ways:
(a) Target of 14% is set, including road and aviation fuel in the denominator (currently only road
fuel is in the denominator). Obligation can be met using either road or aviation fuel;
(b) Target of 14% is set, including road and aviation fuel in the denominator. Obligation can be
met using either road or aviation fuel, aviation fuel counts multiple times towards targets (e.g.
1.2x multiplier introduced in RED II).
(c) Target of 14% is set, including road and aviation fuel in the denominator. A sub-target is set
for how much of the renewable fuel must come from SAF.
Under option (a), although the obligation is on the total volume of road + aviation fuel, the obligation
can be met in the cheapest way possible. Given that SAF is typically more expensive to produce than
road transport fuel, this is unlikely to result in significant supply of SAF into the market. Option (b) is
more likely to result in SAF being supplied into the aviation sector, but also provides no guarantee of
this. Moreover, both options (a) and (b) present a risk towards achieving the 2019 Climate Agreement
targets which apply only to the road transport sector (see section 4.3) or the target for 14% SAF in the
aviation. This is because the obligation could be met using either road or aviation fuel, and so either
sector could be under-supplied with renewable fuel and therefore not meet the target. This would also
create uncertainty for investment. Therefore, this section focusses on option (c) for integration of an
aviation obligation within the HBE scheme, or a fourth option (d) of creating an entirely new scheme.
Both of these options effectively create a separate target for the aviation sector, either within the
existing HBE scheme (option c) or outside of the existing HBE scheme (option d).
Both option (c) for integration of an aviation obligation within the existing HBE scheme, and the option
(d) of creating an entirely new aviation obligation scheme have equal likelihood of meeting the 14%
target, and ensure that SAF is actually supplied into the aviation sector. Including aviation within the
existing HBE scheme may have some reduction of administrative burden for government and for fuel
suppliers to the aviation sector who are also fuel suppliers to the road transport sector. However,
aspects of the aviation obligation may be different to the current set-up of the HBE scheme, in terms
of which party is obligated, sustainability requirements etc. which may be challenging to implement
under the existing HBE scheme.

5.4.6 Metric for the obligation
An obligation could either be imposed in terms of an energy or volume percentage of total fuel
supplied/purchased; or in terms of a GHG saving that must be achieved on average across all fuel
supplied/purchased. A GHG reduction requirement could in theory be met through a number of other
measures, such as new aircraft designs and improved air traffic management, but it is assumed here
61 SkYNRG, Available from: https://skynrg.com/wp-content/uploads/2019/03/Publications-The-voluntary-RED-opt-in-for-aviation-

biofuels.pdf

39

Renewable energy obligation for aviation in the Netherlands
that only the fuels are within scope. Examples exist of both types of schemes. For example, most
countries in the EU, including NL, require a blend percentage by energy or by volume of renewable
fuel in the road transport sector. The USA Renewable Fuel Standard also requires a minimum blend by
volume of renewable fuel, and the Norwegian SAF obligation will be defined as a percentage blend by
volume. Germany requires a percentage GHG reduction for fuels used in the road transport sector,
and the California Low Carbon Fuel Standard also operates on the principle of a GHG reduction target.
An analysis of the potential for a SAF mandate in Sweden recommends that a GHG-based reduction
should be required.62 This approach is recommended in the Swedish study instead of a volume or
energy based blending target because:
•

•
•

It is considered to be ‘more equitable from a climate perspective’ to directly incentivise
GHG reductions, rather than having a volume or energy based blending target, by
providing higher incentives for fuels produced from certain feedstocks (e.g. wastes and
residues) in order to promote those with the lowest GHG intensities.
It puts a value on lower emissions in the fuel production process, which is particularly
advantageous for Swedish producers which tend to have low process emissions
Promotes lower emissions in sectors other than the transport sector

The key trade-offs between these two options are detailed in Table 6. Overall, the GHG-based
obligation provides a direct incentive for lower GHG emissions per tonne of SAF, but the volume or
energy based obligation provides a higher certainty of the 14% target being met and is similar to the
existing HBE scheme.

62 Statens Offentliga Utredningar (2019) Biojet för flyget, Betänkande av Utredningen om styrmedel för

att främja användning av biobränsle för flyget

40

Renewable energy obligation for aviation in the Netherlands
Table 6 Comparison of volume or energy based obligation vs. GHG -based obligation

Sustainability
impact

Ability to
increase
sustainability
over time

Likelihood of
achieving
target

Strength of
signal to SAF
industry
Encouraging
technology
innovation

Energy / volume-based obligation

GHG-based obligation

A threshold would be required to
ensure that each tonne or MJ of
fuel made sufficient GHG savings.
This would need to be consistent
with Article 29 of the REDII (see
section 7.5.1). However once fuels
had met this GHG saving threshold
there would be no extra incentive
to make better GHG savings.
The thresholds for GHG savings
cannot be increased over time
because compliance with Article
29 of the REDII is required (see
section 7.5.1).

A GHG based obligation would incentivise
every additional unit of GHG savings made.
A GHG threshold would still be required in
order to ensure compliance with Article 29
of the REDII (see section 7.5.1).

In theory a GHG-based target incentivises
improved GHG performance over time as
there is a direct financial incentive to
reduce GHG emissions. This could either be
achieved by driving GHG emissions
reductions within an existing supply chain,
or incentivising new fuels with very low
GHG emissions. However if the majority of
countries in the EU do not have a GHG
based target then fuels with a high GHG
saving will go to these countries, whereas
fuels which only just meet the threshold
will go to other countries, so overall there
may be no net improvement in GHG saving
of renewable fuels.
Obligation can be set at 14% in
The policy administrator would need to
2030 so target will be met unless
estimate the likely GHG saving that can be
obligated parties can pay a buy-out achieved by SAF in order to estimate what
price instead.
level the GHG-based target should be set
at to ensure a 14% blend. Therefore with
this method less certainty that a 14%
target would be met.
Industry can anticipate future
More difficult for prospective SAF
market volumes and likely value of producers to anticipate GHG savings of fuel
their products to a certain extent
supplied into the market
Encourages innovation to reduce
Encourages innovation over time to
GHG emissions to meet thresholds, improve GHG performance as this links
but once this is achieved no
directly to higher fuel price in the market
additional benefit from improving
emissions further (though there is
a benefit in CORSIA)

41

Renewable energy obligation for aviation in the Netherlands

5.4.7 Timing and level of obligation
An obligation should aim for 14% SAF in NL aviation fuel in 2030, as laid out by the Aviation Roundtable.
Three additional questions should be considered:
a) The length of time over which the obligation is set beyond 2030
b) Whether interim targets are imposed between the date of introduction of the obligation and
2030. If interim targets are imposed, the level at which they should be set.
Long-term certainty in the continuation of the obligation, and the level at which it will be maintained
is very important in order to provide certainty to investors in plant facilities. Investment decisions being
made today will only bring plants online in the mid-2020’s, therefore commitment to an obligation
only to 2030 provides demand certainty over only at best the first 7 years’ of a plant’s life. It will
therefore have an important positive impact on the certainty provided to investors if the obligation is
extended beyond 2030, and would also be in line with the 2050 goal of 100% SAF use in aviation in the
Netherlands.63 Previous reports have noted 15 years as a recommended time-scale over which policy
certainty should be provided.64
Interim targets could be set between the date of introduction of the obligation and 2030, gradually
increasing the level of obligation up to 14% in 2030. This would provide several advantages:
•
•
•
•

•

Higher and earlier GHG savings through earlier use of SAF
Provide operational experience with the administrative and IT system so that there are less
likely to be technical issues in 2030
Start to build up supply chains by creating demand in the years prior to 2030
Reduce risk of ‘one-off’ actions that meet 2030 target but do not build up sustainable supply
chains of SAF – e.g. HVO plants in 2030 could increase production of HEFA at the expense of
road transport fuel.
Reduce risk of very high prices as a result of shortage of supply during periods of rapid increase
in demand

Interviewees were in general supportive of interim targets for giving clarity on the path to 14%, stating
that it adds credibility to the 2030 obligation and helps to develop demand certainty and de-risk
investment. However more than one interviewee highlighted the fact that interim targets put in place
before the first SAF production in the Netherlands (anticipated 2022) would result in supply being met
through imports. Current planned plants in NL are likely to be able supply around 2.4% of total
kerosene demand in 2022, and future plants anticipated in the Smart and Sustainable Aviation Action
Plan could provide 4.4% - 5.6% of total kerosene demand in 2025.65 Interim targets at this level could
therefore be met from NL supply.
In addition, it was highlighted that interim targets would likely be met through HEFA, so if interim
targets are introduced it should be ensured that these do not preclude the development of
technologies at lower TRL which could prove more sustainable in the long-term, for example through
measures discussed in section 7.4.
63

Aviation Roundtable (2019) Draft Sustainable Aviation Agreement

64 CE Delft (2017) Overheidsmaatregelen biokerosene, Availale from: https://www.ce.nl/publicaties/1980/overheidsmaatregelen-

biokerosine
65 Dutch aviation stakeholders, 2018, “Smart and Sustainable – Action Plan for Air Transport in the Netherlands”,
https://www.klmtakescare.com/sites/default/files/Smart%20and%20Sustainable_final.pdf

42

Renewable energy obligation for aviation in the Netherlands
Overall there are several advantages to imposing interim targets between the date of introduction of
the obligation and 2030. It should however be ensured that in the years preceding 2030 interim targets
should be set at an appropriate level to provide certainty as supply-chains are built up, without unduly
burdening the industry whilst SAF is still available only in relatively limited quantities.

5.4.8 Trading of certificates
Setting up a trading mechanism for the certificates that can be used to meet the obligation enables
some obligated parties to physically supply less than their obligated amount of SAF whilst others oversupply so that overall the obligation is met. This is currently allowed under the HBE scheme and under
most renewable fuel obligation schemes currently operated in European MSs, so the administrative
requirements from doing so are well understood. Allowing trading allows the target to be met in the
lowest-cost way across all obligated parties, whilst if trading is not allowed then overall cost of
compliance with the 14% target is higher. Trading does not impact the overall likelihood of meeting
the target. A traded mechanism could facilitate some fuel suppliers or airlines committing to off-take
agreements for volumes of fuel greater than the amount of fuel needed to fulfil their obligation. Such
off-take agreements have been important in supporting first-of-a kind SAF plants to-date.
Even if a traded mechanism was not put in place, the timescale over which an obligated party could
meet the obligation could still allow some flexibility in supply. For example the obligated party could
supply different volumes at different points in time as long as over a given period (e.g. a year) they
have supplied the required SAF volume.
It should be clearly defined whether an obligated party is able to meet its obligation with SAF supplied
at any airport in the NL rather than at the airport where the obligation occurs. Generally under mass
balance principles, without a traded mechanism, this would not be allowed. A traded mechanism
would allow this to take place. This could lead to SAF supply at Schiphol but not at smaller regional
airports, which would not be a problem as long as overall targets were met.
If trading was allowed, certificates would need to be generated which could be traded between
obligated parties. Under the HBE scheme, credits are generated by the SAF supplier. The HBE must be
sold on by the SAF supplier to obligated parties, because no party in the kerosene supply chain is
obligated. In contrast, under an aviation obligation, either the fuel supplier or the airline would be
obligated, therefore the certificate could be generated at the control point for the obligation.
There are many examples from other countries of operating a traded certificate mechanism for
meeting an obligation, including those based on a volume or energy based obligation, for example the
UK Renewable Transport Fuel Obligation 66 , Italian CICs and US RINs; and those based on a GHG
reduction obligation, including the UK GHG Mechanism 67 and in California’s Low Carbon Fuel
Standard68
Overall, a traded mechanism was favoured by the majority of interviewees. It offers advantages in
terms of flexibility of meeting the obligation, and is not challenging to implement.
66 Department for Transport (2019) Renewable Transport Fuel Obligation (RTFO) guidance: 2019 ; Available from:

https://www.gov.uk/government/publications/renewable-transport-fuel-obligation-rtfo-guidance-2019 (Accessed 18/11/2019)
6767 Department for Transport (2019) Manage motor fuel greenhouse gas emissions, Available from:
https://www.gov.uk/guidance/manage-motor-fuel-greenhouse-gas-emissions
68 Ricardo (2018) California Low Carbon Fuel Standard Rethinking Decarbonisation Incentives – Policy Case Studies; Available from:
https://es.catapult.org.uk/wp-content/uploads/2018/10/California-LCFS-Case-Study-FINAL.pdf (Accessed 18/11/2019)

43

Renewable energy obligation for aviation in the Netherlands

5.4.9 Eligible fuel pathways
The requirement from the Sustainable Aviation Roundtable is for 14% sustainable aviation fuel.
Therefore biofuels and power-to-liquids (PtL) are both eligible fuels. Hydrogen and electricity produced
from renewable sources are also eligible. As hydrogen and electricity are not currently used in
commercial aviation, and are anticipated to contribute only a very minor proportion of energy use in
aviation, specific policy relating to these fuels is not considered further in this study. Recycled carbon
fuels are assumed to be not eligible.

5.4.10 Buy-out price
Many existing renewable fuel blending mandates, such as the UK RTFO, have a buy-out price. The buyout price can be paid if the obligated party does not supply the required amount of fuel, effectively
providing an upper limit on the price that will be paid for SAF. The implications of a buy-out price for
different stakeholders is explored below, along with how a buy-out price could be set.
Implications of a buy-out price for consumers:
A buy-out price caps the overall cost of the scheme to the consumer because if obligated parties are
unable to supply the required volumes then they will pay the buy-out price.
Implications of a buy-out price for SAF producers:
A buy-out price caps the cost that the market is willing to pay for SAF, so SAF produced at a cost above
the buy-out price is unlikely to be sold in the Netherlands. This may hamper the development of
production processes at an early TRL which currently have high production costs. However this can be
mitigated through the provision of additional support to early-TRL processes, as discussed in section
7.4.
A buy-out price also provides some additional certainty to investors in SAF production as it informs
them of the upper limit on the support they will receive for SAF. However the key information for
investors to understand whether a new plant is viable is likely to be the lower limit on the level of
support they will receive. The lower limit of accessible support is determined by the volume and price
of the supply of different fuels into the market, hence is not impacted by a buy-out price.
Implications of a buy-out price for obligated parties:
A buy-out price reduces risk to the obligated party that under a situation of limited SAF supply some
obligated parties may be forced to pay very high costs for SAF and hence may be at a competitive
disadvantage. There is currently very low production capacity for SAF so all purchases are through
bilateral contract, and even traded HVO prices are not publicly available. A buy-out price could
therefore be an effective mechanism to reduce risk to the obligated parties.
Design of the buy-out price:
The buy-out price should be high enough that it is more advantageous to the obligated party to provide
SAF rather than to pay the buy-out price; however it should be low enough so that it provides
protection to the consumer and industry that if there are supply problems or unforeseen
circumstances. The buy-out should also be at a similar level to that of nearby alternative markets.

44

Renewable energy obligation for aviation in the Netherlands
A buy-out price under the Swedish obligation, which requires a certain percentage GHG reduction, has
been proposed at 6 SEK / kg CO2eq. The price per tonne of SAF is therefore dependent on the GHG
intensity of the SAF. The implied buy-out price per tonne of SAF under a number of different scenarios
is shown in Table 7. This effectively caps the cost of compliance at roughly the trading price of HEFA
(see section 9).
Table 7 Estimated buy-out price from a SEK6/kgCO 2eq. penalty under a number of different scenarios
for fuel GHG intensity (assuming 0.09394 EUR/SEK)

Assumed GHG
intensity of SAF
(gCO2eq./MJ)

Assumed GHG
intensity of
kerosene
(gCO2eq./MJ)

GHG intensity
reduction made
by switching
from kerosene
to SAF
(gCO2eq./MJ)

16
9

89
89

73
80

GHG intensity
reduction made by
switching from
kerosene to SAF
(kgCO2eq./tonnefuel)

Implied buy-out
price per tonne
of SAF (EUR /
tonne SAF)

3142
3443

1771
1940

Proceeds from the buy-out price could be used: (a) to mitigate the cost of compliance for compliant
parties, for example by direct payment on the basis of volumes of SAF supplied; (b) or it could be used
to indirectly reduce the costs of the industry e.g. by funding demonstration plants. However if the buyout price is set at the correct level then the revenue received should not be high so the proceeds from
the buy-out price would not contribute substantially to mitigating the costs of compliance.

5.4.11 Enforcement mechanism
In order to ensure that the obligation is met, there must be a penalty for non-compliance. Two main
options exist for ensuring that the obligation is met – however neither of these would be needed if a
buy out was in place:
•

•

A penalty price could be imposed for non-compliance. This effectively has the same impact as
the buy-out price by capping the overall cost of compliance, however interviewees suggested
the perception of a ‘penalty price’ means they would be less willing to pay it. It is also possible
to set a penalty on top of the obligation i.e. if a party does not comply they would need to pay
the penaly and supply the obligated volume in the next period. The points noted in section
5.4.10 should be considered when setting the level of the penalty price.
There could be legal penalties for non-compliance. This enforcement mechanism is currently
used under the HBE scheme. It does not place a cap on the overall cost of the scheme to the
consumer.

Under the HBE system NEa as the competent authority can use information from the Tax Authority for
supervision and verification. This information is not available for kerosene, so for a SAF obligation an
alternative method of verification for enforcement purposes may need to be defined.

5.4.12 Mitigation of cost impacts
An obligation imposed on either airlines or fuel suppliers would likely be passed on directly to
consumers to some extent, and potentially in different ways (see chapter 9.1.4). Measures paid for
from general taxation could be put in place in order to offset the cost to the consumer. Such measures

45

Renewable energy obligation for aviation in the Netherlands
do not reduce the overall cost of compliance with the mechanism, but would simply spread the cost
across the general population (via taxation) rather than just across the aviation industry. Reducing the
cost to the industry by financing an obligation through general taxation would reduce the severity of
the potential response to a blending obligation. This would mitigate the negative economic impacts of
these responses, which are discussed in section 9. A reduction in tankering and travelling via
alternative routes would have a positive impact on GHGs, whilst lower levels of mode shifting and
demand reduction would have a negative impact on GHGs.
Of the potential policy mechanisms described in Table 2, the following mechanisms could be used to
offset the cost of compliance with a blending obligation.
•

•

Supply side policies, as described in section 5.2:
o Demonstration plant funding
o Plant financing guarantees
o Prizes
Demand side policies, as described in section 5.3:
o Tax exemption
o Differentiated airport fees
o Government support or payment for SAF used

As explained in section 4.2, State Aid rules exclude support for food-based biofuels, and biofuels which
are subject to a supply or blending obligation, unless a) the production cost of fuels from the plant is
so high that it would not be competitive under the obligation, compared with either price of fuels that
would be supplied, or with a penalty price and b) that the aid would not give rise to significant undue
adverse effects on the competition by outcompeting fuels that had not received the support. This
would be demonstrated by showing that the plant's production capacity was small compared with the
market demand, and/or that the level of support had been set to avoid such effects. Therefore it could
be possible to introduce additional supply or demand side support for non-food SAF routes with high
production costs.This would rely on showing that they met the conditions above. The criterion on their
production volume being small compared with market demand may be difficult to meet, particularly
in early years of an obligation, as one plant capacity for some routes could be a significant proportion
of NL demand. However, it is unlikely that financial support could be given to HEFA, given that this is
expected to supply the majority of the demand under this obligation. Since financial support cannot
be given to HEFA plants, yet HEFA is expected to meet the majority of the SAF demand, it follows that
there is limited scope to mitigate the cost impact of a blending obligation on the industry. Price support
measures for SAF, including HEFA, could only be carried out if a blending obligation were not also in
place.

5.4.13 Integration with other renewable energy support schemes
Airlines and others supported enabling airlines to claim use of SAF under any new NL policy towards
CORSIA and EU ETS, provided that the GHG savings from the NL policy are not counted towards NL’s
national GHG accounts. As all NL flights are international, there are no plans to count these GHG
savings towards national accounts, and so this is not a barrier. This would require a chain of custody
for fuel and proof of sustainability to the aircraft, for example on a mass-balance basis, which is
different from the approach used in the current opt-in. However, no interviewees saw insurmountable

46

Renewable energy obligation for aviation in the Netherlands
barriers towards this. One action needed would be to decide on chain of custody rules in mixed
pipelines, in particular the CEPS pipeline once this is approved for SAF transport.
As explained in section 4.2, counting of SAF use promoted by the new policy towards RED II targets is
still under discussion.

5.5 Conclusions
If food and feed crop based biofuels are to be used in aviation in the Netherlands, a blending obligation
is the only policy option, as State Aid rules prevent any financial support for food and feed based
biofuels. Whatever the decision made on acceptable feedstocks, an obligation provides the highest
level of certainty that a desired blend level will be met. However, this is not guaranteed if a buy-out or
penalty price is used. An EU-wide obligation would reduce competitive distortion and carbon leakage,
however is likely to be challenging to implement and unlikely to be implemented in the short-term.
If an obligation were introduced, there are several options in the design of the policy. The obligated
party could feasibly be either the fuel supplier or the airline. An obligation on fuel suppliers would
maintain consistency with the proposals of other European countries. An obligation could either be
imposed on a volume or energy basis, or on the basis of a required GHG reduction. A volume or energy
based obligation provides a higher certainty of the 14% target being met, but the GHG-based obligation
provides a direct incentive for lower GHG emissions per tonne of SAF. A long-term and stable policy is
important for investor certainty, and introducing interim targets in addition to the 2030 target would
likely be beneficial in building up SAF supply-chains.
Under an obligation, provision of support through additional policies to mitigate cost impacts would
be limited to certain fuels, again due to State Aid rules. Additional support for the main fuel expected
to supply the obligation would be difficult to justify. Support would be possible for routes with higher
costs than those expected to supply the majority of the obligation, and which have either small
production volumes OR where the level of support given is limited. This support could be in the form
of supply side policies (e.g. capital grants) or demand side policies (e.g. SDE++-like system).
If food and feed crop based biofuels are to be excluded from the policy mechanism, supply or demand
side polices could be used instead of an obligation, rather than alongside one. In this case, it would
need to be established for each fuel pathway whether an obligation or an alternative mechanism (such
as one analogous to SDE++) would be more likely to create certainty for investors, promote long term
sustainable supply, promote competition, and reduce costs to the industry.

47

Renewable energy obligation for aviation in the Netherlands

6 Supplying a SAF obligation
Summary
This section presents the development status of SAF routes and analyses possible supply scenarios
to meet a 14% SAF obligation in the Netherlands and across Europe.
•

•

•

•

There are 10 known conversion routes to produce SAF. The SAF produced by 6 of these
routes is already certified for blends with fossil jet fuel, generally at up to 50%. Only
hydroprocessing of oils/fats (HEFA) is at the commercial stage and Alcohol-to-Jet (AtJ) is
close to commercialisation. Based on central scenarios of future total aviation fuel demand,
a 14% obligation by 2030 would require around 700 kt/yr of SAF in the Netherlands, before
considering any impact of increased cost on demand. If the same 14% obligation level was
applied across the whole EU this would correspond to 6,600 kt/yr of SAF.
If a 14% obligation in the Netherlands was supplied entirely through HEFA the total amount
of feedstock required would be 880 kt/yr of oils/fats for the jet fuel portion, though the total
demand from the plants as a whole could be much higher, as road transport fuel is also
produced. If waste oils and fats alone were used, this would require around 18% of the EU
potential resource, for which there is growing demand from the road transport sector. To
meet the 700 kt/yr SAF demand 1 or 2 additional HEFA plants would be required depending
on the plant capacity. Overall, this route is the most feasible option to meet the obligation,
but could have feedstock constraints if demand grows fast in other markets.
For routes from lignocellulosic feedstocks and power to liquids, even supplying all of 2030
SAF demand in the Netherlands would lead to feedstock requirements that are very small
compared with the EU resource potential. However, these are at the demonstration / early
commercial stage, and so there is more uncertainty over their contribution by 2030.
Scenarios for the mix of SAF routes supplying 14% of EU aviation fuel demand by 2030,
assuming successful commercialisation of advanced routes show 60-70% supply from HEFA,
15-18% from AtJ, 5-10% from gasification and FT, and 5-7% from pyrolysis, with small
contributions from other routes. This would require huge growth in capacity of all routes, a
significant share of global waste oils and fats supply, and a global market willing to pay for
the associated road transport fuel produced.

6.1.1 Supply routes for SAF to 2030
There are currently 6 certified production routes for SAF, a number of routes in the certification
process and several other routes that are not in the certification process yet, but that could reach
approval by 2030. The technical and commercial status of all these routes is presented and summarised
in Table 8.

48

Renewable energy obligation for aviation in the Netherlands
Table 8 Summary of SAF routes development status

Route

Certification69

Technology status

Global volumes of jet
fuel produced in 2018
(kt/y)

Hydroprocessing oils/fats
Co-processing oils/fats
Alcohols to Jet
Biomass Gasification + FT
Biomass Gasification + FT
with Aromatics

HEFA-SPK up to 50% blend
D1655, up to 5% co-feed
ATJ-SPK up to 50% blend
FT-SPK up to 50% blend

Commercial (TRL 8)
Commercial (TRL 8-9)
Demonstration (TRL 6-7)
Demonstration (TRL 6)

17
No commercial production
0.3
No commercial production

FT-SPK/A up to 50% blend

Demonstration (TRL 6)

No commercial production

Direct sugars to
hydrocarbons

HFS-SIP up to 10% blend

Pyrolysis + upgrading
Hydrothermal liquefaction

On goinga
Pre-qualification stage

Aqueous phase reforming

Ongoing (HDO-SPK)

Power to Liquids + FT

FT-SPK up to 50% blendb

Prototype (TRL 5) for
lignocellulosic sugars, precommercial (TRL 7) for
conventional sugars
Demonstration (TRL 6)
Demonstration (TRL 5-6)
Prototype (TRL 4-5) for
lignocellulosic sugars,
demonstration (TRL 5-6) for
conventional sugars
Demonstration (TRL 5-6)

No commercial production

No commercial production
No commercial production

No commercial production

No commercial production

a) IH2 catalytic process developed by Shell is undergoing certification
b) PtL FT jet fuel can be certified as FT-SPK as long as the FT synthesis is based on iron or cobalt catalysts70

Hydroprocessing of oils and fats (HEFA)
Hydroprocessing of oils and fats is the most mature SAF pathway (currently at technology readiness
level (TRL) 8) and the fuel produced through this pathway is certified by ASTM as HEFA-SPK. The
production process is the same as for Hydrotreated Vegetable Oil (HVO), a fuel commonly used in the
road transport sector, but uses a narrower hydrocarbon cut and includes a more severe isomerisation
step that lowers the fuel freezing point. Because of its maturity and simplicity compared to other
routes, HEFA is the only type of SAF commercially used today. The main limitation of this route is
availability of the waste or vegetable oil feedstocks required. Used cooking oil (UCO) and tallow
represent a relatively small resource globally, and the availability of virgin vegetable oil for fuel is
constrained by competition with other markets and sustainability concerns. As a result, biofuels from
waste oils and vegetable oils have limits to their contribution towards RED II targets (see sectoin
4.2).Novel crops are being investigated in terms of potential and sustainability, such as camelina,
carinata and oil-bearing algae. Lastly, larger volumes of SAF could be potentially supplied if High Freeze
Point HEFA (HFP-HEFA) was approved as an aviation fuel. HFP-HEFA is very similar to diesel HVO and
would require less upgrading compared to HEFA, meaning a lower degree of plant modification than
for HEFA. Therefore if HFP-HEFA was approved, HVO capacity could be quickly converted to HEFA
provided market drivers were sufficiently strong. However some interviewees considered that given
that modification is required, HFP-HEFA may not give much cost or supply capacity benefit compared
with HEFA.

69 CAAFI, Fuel qualification – Current status, accessed on Oct 2019, http://www.caafi.org/focus_areas/fuel_qualification.html
70

D7566 specification, Annex1, article A1.4.1.1

49

Renewable energy obligation for aviation in the Netherlands

Co-processed oils and fats
SAF can also be produced through co-processing oils and fats at oil refineries with the advantage of
exploiting already existing facilities and fuel distribution networks. The integration of lipid coprocessing into the refining process is commonly done in a hydrotreater. Typical percentages of cofeed are between 5% and 10% of the total feedstock, although up to 30% co-processing has been
achieved in special circumstances. Co-processing of renewable lipids (free fatty acids and fatty acid
esters found in oils derived from plants and animal fats) to produce jet fuel is limited to 5% by the
ASTM conventional jet fuel standard (D1655). Co-processing vegetable oils may require some
equipment and plant set-up modifications, which are minimal below 5% but can become significant
above this threshold71.

Alcohol to Jet (AtJ)
The Alcohol to Jet (AtJ) process turns alcohols into jet fuel. The alcohol used can be produced through
conventional processes involving fermentation of sugar or starch crops, such as sugarcane, corn and
wheat, or through advanced routes from lignocellulosic feedstocks, such as woody and grassy
feedstocks, and wastes. ATJ-SPK bioblends up to 50%v/v have been certified by ASTM since 2016 and
the technology is currently at TRL 6-7. The AtJ route offers logistical flexibility because the alcohol
catalysis plant does not need to be co-located with alcohol production, and alcohols can be
conveniently transported and stored. An issue to consider in relation to this route is the opportunity
cost of using the alcohols directly in transport applications (e.g. road and marine) as opposed to
converting them to jet fuel, at the cost of additional capital expenditure, efficiency loss and potentially
loss of revenue from policy support.

Gasification with Fischer-Tropsch synthesis
The gasification with Fischer-Tropsch synthesis (Gasification+FT) process transforms lignocellulosic
biomass or solid waste into road and aviation fuels, such as naphtha, gasoline, diesel and jet fuel, as
well as other valuable co-products. The jet fuel produced through the Gasification+FT route was the
first to be certified in 2009 under the name of FT-SPK. This type of SAF can be blended with fossil
kerosene up to 50%. While a commercially mature route for coal and natural gas-to-liquid routes, the
bio-based route is only now approaching TRL 7-8. Challenges faced by this route are the economic
viability of scaling down processes to scales suitable for biomass and waste-based systems, the design
of processes and catalysts well suited to relatively small-scale systems and the overall efficiency of
integrated systems. An option for this route could be co-process the waxes that are produced as a
process intermediate at oil refineries, rather than upgrading them in a dedicated plant, to reduce
capital requirements. This route is currently being certified by ASTM.

Direct sugars to hydrocarbons (DSHC)
Genetically modified microorganisms can be used to convert sugars into hydrocarbons or lipids. These
routes are known as Direct Sugars to Hydrocarbons (DSHC) routes. There are three main routes under
development whose products can be further processed into jet fuel: heterotrophic algae or yeast
converting sugars into lipids within their cells; genetically modified yeasts which consume sugars and
excrete long-chain liquid alkenes (e.g. farnesene); genetically modified bacteria consuming sugars and
71

Concawe, 2019, “Refinery 2050: Conceptual Assessment”, PDF page 32, https://www.concawe.eu/wp-content/uploads/Rpt_19-9.pdf

50

Renewable energy obligation for aviation in the Netherlands
excreting short-chain gaseous alkenes (e.g. isobutene). Currently biological routes almost exclusively
use conventional sugar feedstocks, although pilot projects are testing cellulosic sugars. DSHC routes
using conventional sugar feedstocks are at TRL 7-8, while the same processes based on cellulosic
feedstocks are at TRL 5. A specific route based on the production of farnesane from sugar is certified
as Hydroprocessing of Fermented Sugars - Synthetic Iso-Paraffinic fuels (HFS-SIP) and can be blended
with fossil kerosene up to a maximum of 10%. The complexity and low efficiency of converting
lignocellulosic sugars into fuels through DSHC translates into high feedstock cost and high energy
consumption, which makes DSHC an expensive SAF route.

Pyrolysis and upgrading
Pyrolysis transforms lignocellulosic biomass or solid waste into an intermediate bio-crude oil, which
can then be upgraded to road and aviation fuels. The fast pyrolysis to bio-crude oil process is at TRL 8,
with several first commercial facilities selling the pyrolysis oil for heating applications. However,
refinery upgrading of pyrolysis oils to a finished fuel product is only at the early demonstration stage
(TRL 6), with batch production in limited trial runs. Therefore, the overall route from pyrolysis to jet
fuel is at maximum TRL 6. KiOR had embarked on the ASTM certification process for bio-kerosene from
fast pyrolysis but the company filed for bankruptcy. Now, Shell’s catalytic pyrolysis process (IH2) is in
Testing Phase 1 of the ASTM’s D4054 qualification procedure. At date there is no commercial process
for upgrading pyrolysis oil to finished fuel in dedicated plants. However, research into materials and
catalysts for such systems is ongoing.

Hydrothermal Liquefaction (HTL)
Hydrothermal liquefaction (HTL) is a process where biomass and water are heated at very high
pressures to produce a bio-crude. The near/super-critical water acts as a reactant and catalyst to
depolymerise the biomass. The bio-crude produced can then be upgraded similarly to the pyrolysis
route. The higher molecular weight distribution makes HTL oil more suitable for diesel production, but
gasoline and jet are possible adding hydrocracking steps. HTL is well suited to process very wet biomass
(sewage sludge, manure, micro and macro algae), as well as some lignocellulosic feedstocks. Bio-crude
production of HTL oils is currently at TRL 5-6 with small scale demonstration activities ongoing.
Dedicated upgrading to jet fuel is at lab-scale (TRL 3-4). This route has not entered the ASTM
certification procedure and is still in pre-certification stage.

Aqueous Phase Reforming (APR)
The Aqueous Phase Reforming (APR) process catalytically converts biomass-derived oxygenates (such
as sugars, sugar alcohols and polyols) into a hydrocarbon mixture that can be separated into a slate of
various fuels, including kerosene. APR using conventional sugars is at TRL 5-6 as a result of pilot scale
plants operated by Virent. APR derived bio-crude using lignocellulosic sugars has been produced and
upgraded to bio-kerosene at lab scale (TRL 3-4). Aviation kerosene produced via APR is in Phase 2 of
the ASTM certification procedure and referred as Hydro-deoxygenated Synthetic Kerosene (HDO-SK).
Unlike other reforming processes, APR operates in wet conditions which reduces the costs of
dewatering certain feedstocks like sugars. However, this process has low selectivity to liquid
hydrocarbons (high gaseous yields) and short catalyst lifetime. These two characteristics makes APR
expensive from a capital and operational cost standpoint.

51

Renewable energy obligation for aviation in the Netherlands

Power-to-Liquids with Fischer-Tropsch synthesis
The Power-to-Liquid with Fischer-Tropsch (PtL FT) route produces liquid fuels by catalytically
combining a carbon source with hydrogen produced via electrolysis using renewable electricity. This
pathway requires three “feedstocks”: electricity, water and a concentrated source of CO2. The maturity
of the PtL FT route depends on the maturity of single components and the design configuration chosen,
with some systems being demonstrated at small scale (TRL 5-6). CO2 from concentrated sources like
biogas upgrading, ethanol production or beer brewing, or CO2 waste streams from industrial processes
are commercially available, but other sources, such as direct air capture, are at an earlier stage of
development and commercialisation (TRL 6-7). A reverse water gas shift is then needed to convert the
CO2 to CO for reaction with hydrogen in the FT synthesis process. Hydrogen production via electrolysis
is a mature technology, though with high costs due to input electricity prices, and high capital costs
especially if utilisation is low. Nevertheless, electrolysis has significant further cost reduction
potential 72 . FT synthesis is a well-established process at large scale (for gas and coal), but at the
demonstration stage for small scale applications (TRL 6-7). FT-SPK produced through PtL is certified
under ASTM as long as the FT synthesis is based on iron or cobalt catalysts73. Operating costs for this
route can be very high depending on the cost of electricity. Specific capital costs are currently high as
the technology is at the early demonstration stage, and the potential to reduce these through scale
remains to be demonstrated. Despite being at very early stage with just a handful of active developers,
PtL is a pathway attracting widespread interest as a result of its potential to produce fuels with very
low GHG emissions, which could be subject to fewer feedstock constraints and sustainability issues
than bio-based fuels.

6.1.2 Supplying NL demand to 2030
The projected jet fuel demand in the Netherlands in 2030 ranges from 4,100 to 5,400 kt/yr depending
on assumptions on traffic volumes, oil prices and macro-economic drivers74. Therefore, an obligation
requiring 14% of jet fuel to be SAF would correspond to a SAF demand of 580 to 760 kt/yr, if the
obligation caused no impact on overall aviation fuel demand as a result of higher prices. For the
purposes of this analysis, we have assumed a demand based on PBL’s National Climate and Energy
Outlook for 2030 (KEV2019), published November 2019 central scenario of 5,000 kt/yr, which gives a
SAF demand of 700 kt/yr. This includes no impact of demand response to price, given that this will vary
depending on how the costs of SAF are covered by the industry and government.
The 580 - 760 kt/y range for SAF is aligned with publicly available studies such as the “Smart and
Sustainable” action plan (2018)75 and CE Delft (2018)76. Smart and Sustainable’s SAF demand estimate
is based on lower total aviation fuel consumption (4.1 Mt/y in 2030) due to expected energy efficiency
improvements. Thus, the 14% SAF demand in this case equals to 574 kt/y, which matches the lower
72 E4tech at al 2018 Industrialisation of water electrolysis in

Germany: Opportunities and challenges for sustainable hydrogen for
transport, electricity and heat http://www.e4tech.com/the-electrolyser-industry-is-ready-to-scale-to-gigawatts/
73 Dutch aviation stakeholders, 2018, “Smart and Sustainable – Action Plan for Air Transport in the Netherlands”,
https://www.klmtakescare.com/sites/default/files/Smart%20and%20Sustainable_final.pdf
74 Planbureau voor de Leefomgeving (PBL), 2019, “Klimaat- en Energieverkenning (KEV) 2019”, https://www.pbl.nl/publicaties/klimaat-enenergieverkenning-2019
75 Dutch aviation stakeholders, 2018, “Smart and Sustainable – Action Plan for Air Transport in the Netherlands”,
https://www.klmtakescare.com/sites/default/files/Smart%20and%20Sustainable_final.pdf
76 CE Delft, 2018, “Beoordeling Slim én Duurzaam”,
https://d1rkab7tlqy5f1.cloudfront.net/LR/Actueel/News/2018/Q4/CE_Delft_7S95_Beoordeling_Slim_en_Duurzaam_DEF.PDF

52

Renewable energy obligation for aviation in the Netherlands
bound figure of the latest KEV2019 projections. For comparison, the Dutch consumption of road
biodiesel (FAME and HVO) in 2017 was 427 kt/yr77.

Figure 1 Historical and projected jet fuel consumption in the Netherlands and correspo nding SAF
volumes in 2030 at 14% of this figure (Source: KEV, 2019)

Considering the current status of the SAF industry, the technological advancement of the routes and
the given time horizon, HEFA will most likely be the predominant production route to 2030. However,
this demand for SAF could be supplied through a wide range of possible mixes of fuels, as the demand
is relatively small compared to the potential global plant capacity from these routes by 2030. The mix
will depend on the success of each route, and the level of policy support for each route in the
Netherlands compared with other markets. As a result, rather than making an assumption about the
future supply mix in the Netherlands, this section considers the supply-chain implications if each of
these pathways met the total SAF demand alone, in terms of the feedstock volume and number of
plants required.
The fuel product slate of the conversion routes in scope can vary significantly depending on the plant
configuration. To address this uncertainty, two scenarios are used for each route:
•
•

an “aviation optimised” scenario, where plants are set up to maximise their jet fuel output, i.e.
are built specifically to meet SAF demand
a “road optimised” scenario in which road transport fuel (i.e. gasoline and diesel) output is
maximised. Here producers are primarily aiming to supply the growing road transport market,
but building plants with capacity to supply a small proportion of HEFA to give them an option
for an alternative market. This is likely where the level of SAF demand and price achievable
remains uncertain. Importantly, in both scenarios, the number of plants is sized to meet the
aviation fuel demand in the Netherlands. The road fuel produced at the same time could
supply NL and other markets – and markets would be required for these products. In a road
optimised scenario, the total amount of feedstock required for the plants in which SAF is

77 CBS, 2019, online statistics on liquid biofuels for transport – sum of FAME and HVO

https://opendata.cbs.nl/statline/#/CBS/en/dataset/71456eng/table?ts=1571415839627

53

Renewable energy obligation for aviation in the Netherlands
produced is higher than in the aviation optimised case. However, the feedstock allocated to
SAF is the same in the two cases.
The full list of product slates assumed for each pathway in the two scenarios is provided in Appendix
A.
The feedstock and number of plants requirement for each route to supply the whole 14% demand
alone are summarised in Table 9 (aviation optimised scenario) and Table 10 (road optimised scenario)
and are discussed in more detail in the following paragraphs.
Table 9 Feedstock and plant requirements for each route alone to supply 14% SAF in the Netherlands,
in an aviation fuel optimised scenario

Route/scenario

Feedstock example

Total feedstock
required

Feedstock allocated
to jet fuel

Plants
required

Hydropro. oils
Gasification+FT
Pyrolysis
ATJ
DSHC
PtL FT

Vegetable oils
Forestry residues
Forestry residues
Agricultural residues
Agricultural residues
Electricity

1262 kt/y
91 PJ/y
85 PJ/y
82 PJ/y
89 PJ/y
44 TWhe/y

883 kt/y
46 PJ/y
51 PJ/y
74 PJ/y
89 PJ/y
22 TWhe/y

3
16
18
5
16
16

Table 10 Feedstock and plant requirements for each route alone to supply 14% SAF in the
Netherlands, in a road fuel optimised scenario

Route/scenario

Feedstock example

Total feedstock
required

Feedstock allocated
to jet fuel

Plants
required

Hydropro. oils
Gasification+FT
Pyrolysis
ATJ
DSHC
PtL FT

Vegetable oils
Forestry residues
Forestry residues
Agricultural residues
Agricultural residues
Electricity

6310 kt/y
760 PJ/y
256 PJ/y
295 PJ/y
109 TWhe/y

883 kt/y
46 PJ/y
51 PJ/y
74 PJ/y
22 TWhe/y

14
133
54
20
41

HEFA
If the 14% SAF volume was entirely supplied by HEFA, then 883 kt/yr of feedstock would be required
to produce the HEFA alone. However, the jet output fraction of a plant hydroprocessing oils and fats
is estimated to be 70% of the total fuel output in an aviation optimised scenario, but only 14% in a
road optimised scenario. This means that the total feedstock required for the plants producing HEFA
and HVO would be 1.3 to 6.3 Mt/y depending on the product slate (Appendix A).
The feedstock for these plants could come from a mixture of vegetable oils and waste oils and fats,
such as used cooking oil and tallow. The feedstock which would be considered to have been used to
produce HEFA would depend on the demands of the aviation market, which would be set by a
combination of the NL SAF policy sustainability criteria, and the requirements of airlines. However, as

54

Renewable energy obligation for aviation in the Netherlands
most interviewees supported use of waste oils as the main feedstocks for HEFA production, a
comparison with the potential for these feedstocks is important.
The Netherlands potential for waste cooking oils is about 60 kt/yr78, while the EU has an estimated
potential of 1.9 Mt/y of UCO and 2.8 Mt/y of tallow79. If the 883 kt/yr feedstock for HEFA alone was
entirely sourced in the EU, it would absorb about 18% of the EU estimated potential for UCO and
tallow, or the entirety of the UCO volume traded on the market at the moment. If all of the feedstock
for hydrotreating plants were sourced from the EU in an aviation optimised scenario, it would absorb
about 28% of the EU estimated UCO and tallow potential80. Sourcing this level of UCO and tallow to
supply the whole feedstock demand for these plants, as well as supplying road biodiesel (FAME) plants
and HVO-only plants, would be extremely challenging, given the competition with other countries and
other sectors. This would mean that imports from outside Europe would be needed, and that there
would be a strong driver for sourcing of other types of oils and fats, if they can be shown to be
sustainable. Also note that the projected amount of biofuel corresponding to the RED II Annex IX B cap
at EU level is equal to 5.2 Mt/yr HVO in 203081. Given the scale of HVO/HEFA demand, this is likely to
result in a competition between FAME and HVO/HEFA plants in supplying fuels under this cap. As a
result of the many competing demands for waste oils, from the road transport sector and the growing
SAF sector, many interviewees considered that supplying 14% NL demand in 2030 by waste oil derived
HEFA alone would be very challenging, meaning that either crop-based biofuels would need to be
allowed, or advanced routes supported, or both.
In an aviation optimised case, the 700 kt/y of HEFA would be associated with 1 Mt/y total fuel
production, which corresponds to the current HVO capacity in the Netherlands77 (Figure 3). At EU level
there is currently 3 Mt/y operational HVO capacity and another 2 Mt/y is planned to be commissioned
by 2023 82 . Thus, the required HEFA in the Netherlands corresponds to 20% of the total 2023 EU
HVO/HEFA capacity. Although this level of capacity deployment appears ambitious it could still be
achieved by 2030 in an aviation optimised scenario. This scenario would require 3 oil/fats
hydroprocessing plants if each plant had a total fuel production capacity of 350 kt/yr.
In a road optimised scenario, the 700 kt/y of HEFA would be associated with 5 Mt/y total fuel
production because jet fuel makes up only 14% of the total fuel output (Figure 3). This fuel volume is
equivalent to the total operational and planned HVO capacity in Europe. This would imply that the
majority of HVO plants planned in the EU would need to include capability to produce HEFA, plus
additional non-EU supply or EU aviation-optimised plants, just to provide sufficient SAF for the
Netherlands obligation.

78 Greenea, 2016, “Analysis of the current development of household UCO collection systems in the EU”, PDF page 17,

https://theicct.org/sites/default/files/publications/Greenea%20Report%20Household%20UCO%20Collection%20in%20the%20EU_ICCT_20
160629.pdf
79 Ecofys, 2018, “Technical assistance in realisation of the 2018 report on biofuels sustainability”, table 8, PDF page 59,
https://ec.europa.eu/energy/sites/ener/files/documents/technical_assistance_in_realisation_of_the_2018_report_on_biomass_sustainabi
lity-final_report.pdf
80 Ecofys, 2018, “Technical assistance in realisation of the 2018 report on biofuels sustainability”, table 8, PDF page 59,
https://ec.europa.eu/energy/sites/ener/files/documents/technical_assistance_in_realisation_of_the_2018_report_on_biomass_sustainabi
lity-final_report.pdf
81
Annex IX B cap: 1.7% (energy). Total transport energy demand in the EU in 2030: 320 Mtoe. Assumes all of this is HVO for the purposes of
the energy content used in this calculation: in reality it will be a split between HVO and FAME. Source: European Commission, 2019, Results
of the EUCO3232.5 scenario on Member States, PDF page 6,
https://ec.europa.eu/energy/sites/ener/files/technical_note_on_the_euco3232_final_14062019.pdf
82
E4tech advanced biofuel producer database updated to Oct 2019

55

Renewable energy obligation for aviation in the Netherlands

Figure 2 Feedstock requirements to supply 14% SAF in the Netherlands entirely through HEFA.
(Feedstock data sources: Ecofys (2018), Greenea (2016), OECD FAO (2019))

Figure 3 Comparison between HEFA/HVO supply volumes in a 14% SAF scenario in the Netherlands
and HEFA/HVO capacity in the Netherlands and Europe. (Known planned capacity as of October 2019)

Lignocellulosic routes
The SAF volume could also be supplied by routes based on lignocellulosic/waste feedstocks such as
Gasification+FT and Pyrolysis. In this case a broad range of biomass feedstocks can be used. These
feedstocks can be broadly categorised into four groups: forestry residues, agricultural residues (e.g.

56

Renewable energy obligation for aviation in the Netherlands
straws), energy crops (e.g. miscanthus, willow, poplar) and municipal solid wastes 83 . Due to the
heterogeneity of these types of biomass an analysis based on the feedstock energy content is more
suitable than a mass-based one.
In aviation optimised scenarios, both Gasification+FT and Pyrolysis would require about 90 PJ/y
equivalent of lignocellulosic feedstock of which 50% and 60% are allocated to SAF, respectively (Figure
4). This can be compared with an estimated 140 PJ/y of domestic biomass resources projected to be
available in 2030 84 . These resources represent the amount of lignocellulosic biomass potentially
available for energy use considering agreed sustainability standards for agricultural forestry and land
management85. The feedstock demand associated with a 14% SAF obligation supplied by lignocellulosic
routes would absorb the equivalent of 65% of these domestic resources. However, this demand is very
small in the context of EU lignocellulosic feedstock potential, which is estimated to be over 20,000 PJ
in 2030. In terms of plants, supplying 14% SAF by Gasification+FT would require 16 plants with a
nameplate capacity of 90 kt/y, while Pyrolysis would need 18 plants with a nameplate capacity of 65
kt/y.
In road optimised scenarios, the total feedstock demand would be 760 PJ/y for Gasification+FT and
256 PJ/y for Pyrolysis. Both demands are higher than the Netherlands biomass feedstock potential but
only about 4% and 1% of the European potential, respectively. However, of the total feedstock demand
only around 50 PJ/y are allocated to jet fuel in both cases.

Figure 4 Feedstock requirements to supply 14% SAF in the Netherlands through Gasification with FT
or Pyrolysis and upgrading. Feedstock demand volumes refer to supplying the fuel through each route
individually. EU feedstock resources are plotted on a different scale. (Feedstock data source: S2BIOM
database (2019))

AtJ and DSHC are two other routes that could supply SAF from lignocellulosic feedstocks. Although
currently most AtJ and DSHC plants are based on conventional sugars, these routes could be based on
83 Municipal solid wastes are grouped with lignocellulosic feedstocks because they share similar conversion technology. However,

municipal solid wastes generally have different chemical composition and properties compared to woody biomass.
84 E4tech analysis based on data from S2BIOM database, https://s2biom.wenr.wur.nl/web/guest/data-downloads
85
Referred as “base potential” in the source.

57

Renewable energy obligation for aviation in the Netherlands
sugars obtained from lignocellulosic residues. MSW is not considered as potential feedstock for these
two routes because it would require unfeasible pre-treatment before being processed.
In aviation optimised scenarios, 100 PJ/yr would be needed for SAF production, through AtJ and DSHC
routes as shown in Figure 5. These two routes can produce very high fractions of jet fuel (90-100%),
therefore almost the entire feedstock required is allocated to SAF. Supplying 14% SAF through AtJ
would require 5 plants with a nameplate capacity of 140 kt/y. DSHC plants are assumed to have
typically smaller size (on average 40 kt/y) therefore about 16 plants would need to be built in the
Netherlands by 2030.
A road optimised production of SAF through AtJ would require nearly 300PJ feedstock, much higher
than the Netherlands resource but very small in the context of EU biomass potential. For this route, it
could be possible to produce ethanol elsewhere, and import it to the Netherlands for conversion to
SAF. Whereas if DSHC was designed for non-aviation purposes such as road transport fuels or even
pharmaceuticals production then no kerosene would be produced by this process86. Thus, no feedstock
requirement is associated with the road optimised scenario for the DSHC route.

Figure 5 Feedstock requirements to supply 14% SAF in the Netherlands through Alcohol-to-Jet or
Direct Sugars to Hydrocarbons. Feedstock demand volumes refer to supplying the fuel through each
route individually. EU feedstock resources are plotted on a different scale. (Feedstock data source:
S2BIOM database (2019))

Power-to-Liquids
Supplying 14% SAF in the Netherlands through PtL FT would require about 44 TWh/y of electricity in
an aviation optimised scenario. Half of this electricity is allocated to SAF production and the rest to
other FT co-products. As a comparison, the gross electricity consumption in the Netherlands was 122
TWh/y in 2018, of which 18 TWh was generated from renewable sources87. Therefore, meeting the
14% SAF obligation would imply adding an additional 36% of generation by 2030, assuming that this
electricity needed to be additional and not displace other uses. If the production of this additional
electricity came from wind energy, the aviation optimised scenario would be equivalent to installing
86 IRENA, 2017, Biofuels for Aviation, https://www.irena.org/documentdownloads/publications/irena_biofuels_for_aviation_2017.pdf
87 Netherland Statistics, 2019, Hernieuwbare energie in Nederland 2018, https://www.cbs.nl/nl-nl/publicatie/2019/40/hernieuwbare-

energie-in-nederland-2018

58

Renewable energy obligation for aviation in the Netherlands
about 1,430 off-shore turbines with a rated capacity of 10 MW, operating with 35% average capacity
factor. A road optimised scenario would require 109 TWh/y of electricity to supply 700 kt/y SAF by PtL
FT, but this would at the same time generate 2,830 kt of PtL fuels for road.

Figure 6 Electricity requirements to supply 14% SAF in the Netherlands entirely through Power-toLiquids FT. EU feedstock resources are plotted on a different scale. (Sources: IEA (2019), Shell Global
Energy Resource database (2018))

6.1.3 Supplying EU demand to 2030
As aviation is an international sector, international approaches to emissions reduction are preferable,
to avoid emissions leakage, and ensure a level playing field between different countries and airlines.
For this reason, there are ongoing discussions at European level about introducing a SAF obligation
across the whole EU. This section explores the feasibility of supplying a 14% SAF if an EU-level
obligation were put in place, if the level were set to match the level agreed upon in the Netherlands.
By 2030, the overall projected jet fuel consumption in Europe ranges from 29 Mt/y to 76 Mt/y
depending on the level of policy commitment, degree of technology improvement and expected air
transport demand (Figure 7). In this analysis two different sets of aviation demand scenarios were
compared: EASA 201988 and IEA ETP 201789 scenarios.
•

IEA ETP scenarios simulate the evolution of the energy industry under different policy
scenarios. The Reference Technology Scenario (RTS) takes into account today’s commitments
by countries to limit emissions and improve energy efficiency, including the NDCs pledged
under the Paris Agreement. The 2-Degree Scenario (2DS) lays out an energy system pathway
consistent with limiting the average global temperature increase to 2°C by 2100. In the Below
2-Degree Scenario (B2DS) technology improvements and deployment are pushed to their
maximum practicable limits across the energy system in order to achieve net-zero emissions
by 2060 at global level. The B2DS depicts a radical transformation of the aviation sector. In this
scenario, by 2060, air transport energy efficiency improves by 68% compared to 2017 levels;

88 EASA, 2019, “European Aviation Environmental Report 2019”,

https://www.easa.europa.eu/eaer/system/files/usr_uploaded/219473_EASA_EAER_2019_WEB_HI-RES_190311.pdf
89
IEA, 2017, “Energy Technology Perspectives”, https://webstore.iea.org/energy-technology-perspectives-2017

59

Renewable energy obligation for aviation in the Netherlands

•

70% of the total aviation fuel consumption is supplied by advanced biofuels; a substantial
transport demand shifts from aviation to high speed rail.
EASA scenarios are built based on an aviation industry perspective. EASA’s projections
consist of 6 scenarios created combining 3 different levels of air transport traffic and 2 possible
technology improvement pathways. “Frozen Technology” scenarios assume that no
improvements will be applied to new aircraft after 2017. In “Advanced Technology” scenarios
the aircraft energy efficiency is assumed to improve by 1.6% per year until 2040.

The two sets of scenarios clearly reflect two different perspectives on the evolution of the aviation
sector. IEA foresees considerable energy demand reduction in Europe, whereas EASA’s projections are
representative of a business-as-usual development. Nonetheless, the two sets of scenarios show one
overlapping trajectory. The EASA Advanced Technology Low Traffic trajectory closely matches the IEA
RTS trajectory from 2030 to 2040. This pathway shows a declining jet fuel consumption in the next two
decades which would reach 47 Mt/y in 2030. Since this pathway represents the intersection between
EASA and IEA projections it was taken as reference in this analysis. If a 14% EU-level mandate was set
in place by 2030, with no demand reduction due to SAF price, this would correspond to a SAF demand
of 6.6 Mt/y.

Figure 7 Historical and projected jet fuel consumption in Europe according to multiple scenarios
(Sources: EASA, 2019 and IEA, ETP, 2017)

60

Renewable energy obligation for aviation in the Netherlands
As for the Netherlands case, this volume of SAF could be supplied through multiple conversion routes,
based on different feedstocks. Whilst many interviewees considered that the current status and lowest
production costs of HEFA meant that the market would be largely supplied by HEFA, others considered
that alternative routes could have potential by 2030, if they were supported by policy and successful
in commercialisation. Additionally, HEFA price might increase in the future due to limited resources of
UCO and tallow. This short market could drive more investments in development of the other SAF
routes.
Anticipating the exact mix of these routes is challenging considering that many of these routes are at
an early stage of development and the SAF market is still at an early stage. Nonetheless, some insights
can be drawn by estimating the potential SAF capacity ramp-up in the case of a supportive policy
environment for all routes, based on the current players and typical project development timelines.
E4tech has developed and maintains a ramp-up model of advanced biofuel producers that is used to
estimate the potential SAF industry capacity to 2030 at global level. This shows the number of plants
that could be built using different routes – although in practice the mix used to supply the SAF market
will depend on the relative success and cost of different routes, and the prices available for their
products in competing markets. Using this model, the global mix of SAF capacity by 2030 is dominated
by HEFA (Figure 8). The second largest potential supply route is AtJ which - by definition - has a higher
jet fuel slate and is a more advanced technology compared to other non-HEFA routes.

Figure 8 Global mix of SAF production pathways by 2030

Here we assume that the EU market would be supplied by the same mix of pathways as the potential
global capacity mix shown above, on the basis that SAF is likely to be a traded product similar to road
transport biofuels. From this we estimate the amount of feedstock required by each route applying
the same approach as in the Netherlands case. An important distinction must be highlighted here. At
Netherlands level, feedstock requirements are illustrative of extreme cases where each route supplies
the entirety of SAF volume individually. On the other hand, a supply mix was assumed for the EU
analysis. The different approach is justified by the fact that on a single country level a small number of
large plants (especially in case of HEFA and AtJ) is more likely to cover the entire national SAF demand.

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Renewable energy obligation for aviation in the Netherlands
Scaling up to the regional level, this scenario is less probable due to larger demand, higher number of
players increasing competition and a larger pool of heterogenous feedstocks.
The feedstock and number of plants requirement for an EU-level 14% SAF obligation are summarised
in Table 11 (aviation optimised scenario) and Table 12 (road optimised scenario) and will be discussed
in more detail in the following paragraphs. Note as before that the scenarios are sized to meet aviation
fuel demand – the associated road transport fuel production varies considerably.
Table 11 Summary of feedstock and plant requirements to supply 14% SAF in the EU through a mix of
routes, in an aviation fuel optimised scenario

Route

SAF
(Mt/y)

Feedstock example

Total
feedstock
required

Feedstock
allocated to jet
fuel

Plants
required

Hydropro. oils
Gasification+FT
Pyrolysis
AtJ
DSHC
PtL FT

4.7
0.3
0.3
1
0.1
0.1

Vegetable oils
Forestry residues
Forestry residues
Agricultural residues
Agricultural residues
Electricity

8.4 Mt/y
44 PJ/y
38 PJ/y
112 PJ/y
13 PJ/y
6 TWhe/y

5.9 Mt/y
22 PJ/y
23 PJ/y
100 PJ/y
13 PJ/y
3 TWhe/y

19
8
8
7
2
2

Total

6.5

Mix

542 PJ/y

389 PJ/y

46

Table 12 Summary of feedstock and plant requirements to supply 14% SAF in the EU through a mix of
routes, in a road fuel optimised scenario

Route

SAF
(Mt/y)

Feedstock example

Total
feedstock
required

Feedstock
allocated to jet
fuel

Plants
required

Hydropro. oils
Gasification+FT
Pyrolysis
AtJ
DSHC
PtL FT

4.1
0.6
0.5
1.2
0.0
0.2

Vegetable oils
Forestry residues
Forestry residues
Agricultural residues
Agricultural residues
Electricity

36.6 Mt/y
636 PJ/y
167 PJ/y
486 PJ/y
28 TWhe/y

5.1 Mt/y
38 PJ/y
33 PJ/y
122 PJ/y
6 TWhe/y

84
111
35
33
10

Total

6.5

Mix

2748 PJ/y

403 PJ/y

273

HEFA
In an aviation optimised case, HEFA covers 71% of total SAF required, which equals 4.7 Mt/y. Supplying
4.7 Mt/y of HEFA to European airports would be associated with 6.7 Mt/y total fuel production from
oils/fats hydroprocessing. This fuel volume is higher than the sum of the operational and planned HVO
capacity in Europe and corresponds to 67% of the operational and planned global capacity82 (Figure 9).
This shows that the level of HEFA supply required to meet a 14% EU-level obligation is high, considering
that the operational HVO capacity is currently producing very small quantities of HEFA. Nevertheless,

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Renewable energy obligation for aviation in the Netherlands
introducing an EU-level obligation would create in incentive for new plants and for HEFA production
(to the extent possible) from existing plants.
If plants were designed to maximise road transport fuel, then 4.1 Mt/y of HEFA would be produced by
2030 and this would be associated with 29 Mt/y total fuel production. Reaching this level of HEFA/HVO
production by 2030 appears extremely unrealistic considering the current operational and planned
capacity of around 10 Mt/yr and typical project development timelines. However, importantly it also
achieves a significant production of road transport fuel, which would make a significant contribution
to EU and non-EU biofuels targets.
Under the aviation optimised scenario, 4.7 Mt/y out of the total 6.6 Mt/y would be supplied by HEFA.
Producing this amount of HEFA requires 8.4 Mt/y of oils and fats of which 70% are allocated to jet fuel
and the rest to HVO and other by-products. The total feedstock required by this route is roughly equal
to the current biodiesel production from oil crops in Europe, as illustrated in Figure 10. UCO and animal
fat resources potentially available across Europe are estimated to be around 4.6 Mt/y, which would
cover only 56% of the feedstock required. Globally 34 Mt UCO and 10 Mt of animal fats are potentially
available annually. However, Europe competes with other countries and regions for the exploitation
of these resources, across sectors including road transport and oleochemicals. As a result, producers
are active seeking new feedstock options, including oils from crops with lower land impacts, and other
sources of waste oils and fats. The availability and sustainability of these feedstocks will need to be
assessed to determine their inclusion in RED II Annex IXb (see section 7.3).

Figure 9 Comparison between HEFA/HVO supply volumes in an EU-level 14% SAF scenario and
HEFA/HVO capacity in Europe and globally. (Known planned capacity as of October 2019)

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Renewable energy obligation for aviation in the Netherlands

Figure 10 Comparison between feedstock requirements and resource potentials for HEFA in an EUlevel 14% SAF scenario. (Feedstock data sources: Ecofys (2018), OECD FAO (2019))

Lignocellulosic routes
If successfully commercialised, the conversion routes based on lignocellulosic feedstock combined
altogether could supply between 27% and 35% of the 6.6 Mt/y SAF required to meet a 14% SAF
obligation. Among these routes, the main contribution is from AtJ, which would provide 1 - 1.2 Mt/y
SAF by 2030 depending on the scenario. In an aviation optimised scenario this level of production
corresponds to 7 AtJ plants with a nameplate capacity of 145 kt/y. The second major contribution
comes from Gasification+FT, which would provide 0.3 Mt/y SAF in an aviation optimised scenario and
0.6 Mt/y SAF in a road optimised scenario (note that these figures are not the same because these
routes has a different contribution to the total under different scenarios). In the first case, producing
0.3 Mt/y SAF would require 8 Gasification+FT plants with a nameplate capacity of 90 kt/y.
Both in an aviation and road optimised scenario the lignocellulosic feedstock required to supply 14%
SAF could be largely sourced within the EU. As shown in Figure 11, lignocellulosic resources in Europe
are 3 to 4 orders of magnitude higher than the amount required to satisfy the SAF demand covered by
lignocellulosic routes. In principle, the EU lignocellulosic resources would be sufficient to supply the
entirety of the 14% SAF demand.

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Renewable energy obligation for aviation in the Netherlands

Figure 11 Comparison between feedstock requirements and resource potentials for lignocellulosic
routes in an EU-level 14% SAF scenario. Lignocellulosic routes (i.e. Gasification+FT, Pyrolysis, AtJ,
DSHC) are grouped together in this chart. EU and global feedstock resources are plotted on a different
scale. (Feedstock data source: S2BIOM database (2019), Ricardo Bioenergy Resource model (2017),
Gregg & Smith (2010))

Power-to-Liquids
By 2030 the penetration of PtL in the SAF supply mix is likely to be low given its current stage of
development. Our modelling estimates a contribution of 1.6%, or 100 kt/y of SAF under this set of
assumptions. The corresponding electricity required to produce this volume of SAF and FT co-products
ranges between 6 and 28 TWh/y, depending on the product slate configuration (Figure 12). These
electricity volumes would have very limited impact on the EU power system representing only 1% - 6%
of the current EU electricity generation from wind and solar PV sources. Furthermore, the total EUwide technical potential from wind and solar PV is two orders of magnitude higher than its current
exploitation, therefore there is a large margin to accommodate additional electricity generation
capacity dedicated to PtL. This PtL penetration estimate may be conservative, as it is based on its
current early stage of development, and limited number of players today. A strong driver for PtL, such
as policy support and lower cost renewable electricity could attract more players to the sector faster,
bringing a faster ramp up in capacity.

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Renewable energy obligation for aviation in the Netherlands

Figure 12 Comparison between feedstock requirements and resource potentials for Power -to-Liquids
in an EU-wide 14% SAF scenario. EU and global feedstock resources are plotted on a different scale.
(Sources: IEA (2019), Shell Global Energy Resource database (2018))

In conclusion, an EU-wide 14% SAF obligation would be challenging. Assuming successful
commercialisation of advanced SAF routes, 14% of EU aviation fuel demand could be supplied by 2030
through a mix of SAF routes: 60-70% from HEFA, 15-18% from AtJ, 5-10% from gasification and FT, and
5-7% from pyrolysis, with small contributions from other routes. This would require huge growth in
capacity of all routes, a significant share of global waste oils and fats supply, and a global market willing
to pay for the associated road transport fuel produced.

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Renewable energy obligation for aviation in the Netherlands

7 Sustainability requirements
Summary
Ensuring the sustainability of SAF used in the Netherlands is very important to all stakeholders, both
in terms of preventing use of unsustainable fuels in the near term, and encouraging greater levels
of supply of sustainable fuels in the future.
•

•

•

•

•

The extent to which biofuels based on food and feed crops could contribute towards SAF
supply is a key option for policy, with widely differing views amongst stakeholders. This will
need to be agreed in conjunction with Netherlands policymaking on biofuels in other sectors
Waste oils are considered as the main near-term route to SAF, but have limited resources.
Again, whether or not to limit their use should be agreed alongside policymaking in other
sectors
Incentivising advanced biofuels and renewable electricity (through a sub-target, additional
support, or both) is widely supported to increase the sustainable feedstock base and so the
potential for SAF supply
All biofuels will need to meet RED II sustainability criteria from Article 29, which include GHG
savings, land use, biodiversity, forest carbon stocks etc. These may not match the
requirements of the CORSIA scheme. Clarification of detailed rules for factors such as coprocessing, Annex IX feedstocks and additionality of renewable electricity is needed as soon
as possible to enable investment.
No inherent risks of fraud related to SAF use in aviation were identified, however increased
demand and prices and new supply chain players could increase fraud risks.

7.1 Introduction
All statements made to date about the supply of SAF in the Netherlands have emphasised the
importance of sustainability. In addition, ensuring the sustainability of renewable fuels in road
transport has been an important ongoing theme in Dutch and EU level policy for the past 15 years.
•

•
•

In the “Smart and sustainable plan” of 2018, the Dutch aviation sector set an ambition of 14%
SAF, produced in the Netherlands, with a requirement for use of feedstock that is not produced
at the expense of food supply for humans and animals and / or causes environmental damage,
such as deforestation. The group was in favour of sustainability certification based on what
they consider to be the strictest criteria, namely those of the Roundtable on Sustainable
Biomaterials (RSB)75.
The Draft Agreement on Sustainable Aviation mentions “sustainable raw materials”
The Dutch Climate agreement states “In relation to the use of renewable fuels, sustainability
is a precondition both in quantitative and qualitative terms”. More detail on specific conditions
within this policy is given below.

All interviewees for this project stated that the sustainability of SAF used in the Netherlands was very
important to them. However, definitions of what types of SAF were sustainable varied between

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Renewable energy obligation for aviation in the Netherlands
interviewees. Some also noted that other players in the industry may have fewer concerns in this area,
and prioritise compliance with policy at the lowest possible cost.

7.2 Crop-based fuels
The extent to which biofuels based on food and feed crops could contribute towards SAF supply is a
key option for policy, with widely differing views amongst stakeholders. This decision affects the
sustainability and costs of biofuels supplied throughout the lifetime of the policy.
The Dutch Climate Agreement states:
“Many biofuels are already produced from waste and residues. The increase in biofuels must
be brought about largely from sustainable residual substances (including cascading). This is in
line with the government’s objective regarding the highest quality use of biomass as well as
with the development of the circular economy. For that reason, the parties have agreed that,
in relation to achieving this renewable energy target for transport (including the 27 PJ), no
additional biofuels from food and feed crops in excess of the 2020 levels should be used in the
Netherlands. This will be embedded in national regulations with the implementation of RED II.
This will go toward advancing the realisation of growth through sustainable advanced biofuels,
produced from waste and residues.
At this time, no biofuels produced from agricultural crops (other than food and feed crops) with
a low ILUC risk that meet the requirements of the regulatory framework of RED I and RED II are
being used in the Netherlands. In 2020, the parties will make agreements on the future
commitments and the sustainability framework in force and will not commit to the additional
use of the foregoing crops during this period.”
This decision shows that there is no support for use of food and feed based biofuels at levels above
those used in road transport in 2020 in order to meet the Climate Agreement targets. This implies that
there may not be support for increased use of these fuels to meet other targets, such as a SAF
obligation. This would mean that the 2020 level could be considered a limit on Netherlands food and
feed crop biofuel use across all sectors including aviation and shipping.
Aviation industry views on the use of food and feed crop-based biofuels in aviation vary, as shown by
interviews: many airlines do not support the use of biofuels derived from palm oil or palm oil products,
as a result of environmental concerns and reputation risk. These airlines would prefer to use waste
and residue-derived fuels, though have not entirely ruled out use of non-palm food and feed crops.
Other airlines have lower concerns on use of food and feed crops, being more sensitive to fuel price,
whilst some airlines from countries with high levels of food and feed crop production may actively
support use of these crops, for example palm oil in Malaysia90. Fuel suppliers’ views also vary: several
stated that they would prefer a long term framework with performance-based criteria, such as a need
to prove avoidance of impacts on land and food, to a list-based approach to acceptable feedstocks, on
the grounds that this would enable innovation in feedstock sourcing.

90 Malay Mail Jan 2019 Three major airlines join ‘Love MY Palm Oil’ campaign

https://www.malaymail.com/news/malaysia/2019/01/22/three-major-airlines-join-love-my-palm-oil-campaign/1715306

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Renewable energy obligation for aviation in the Netherlands
Note that when discussing food and feed crop-based biofuels, interviewees focused on discussing oil
crops, in particular those such as palm with high ILUC impacts, and so views on use of crop-derived
ethanol for AtJ routes may differ. For example, using CORSIA LCA values, AtJ from sugarcane ethanol
has lifecycle emissions, including ILUC impacts, at a similar level to AtJ from agricultural residues or
grassy energy crops91, and therefore exclusion or restriction based on the feedstock being edible may
not be justifiable on the basis of relative GHG savings.
In addition, some interviewees considered that there could be promising options for biofuels based on
crops which could demonstrate their lack of impact on land and food, for example cover and rotation
crops. Crops under consideration are both edible and non-edible, and so these need to be defined
based on their impacts rather than edibility. These crops are defined in RED II Art 2 (40) as not counting
as food and feed crops (“excluding […] intermediate crops, such as catch crops and cover crops,
provided that the use of such intermediate crops does not trigger demand for additional land”).
However, this does not mean that all of these crop types are in Annex IX. In some situations cover
crops are also defined as counting as ‘non-food cellulosic material’ in RED II Art 2 (42), and are
therefore included in Annex IX Part A. However, RED II gives no further detail on the process for
assessing the impact of these crops on demand for land, and so further clarification is needed. When
the RED II Annex IX is reviewed every two years, new feedstocks may be added. Feedstocks that can
be processed only with advanced technologies shall be added to Part A, while those that can be
processed into biofuels, or biogas for transport, with mature technologies shall be added to Part B.
Overall, the treatment of these crops would need to be made clear within any NL SAF policy.
In Norway, only SAF produced from feedstocks in Annex IX, Part A and B of RED II are acceptable, ie.
excluding food crops92. In Sweden, the proposed policy does not appear to restrict food and feed crop
biofuels although notes the restrictions in RED II on high ILUC biofuels93. For other proposed mandates,
treatment of food and feed crops is not yet known.
The table below compares options for an obligation in the Netherlands, based on several criteria. Note
that the CORSIA approach of assessing fuels based on their GHG emissions including ILUC factors,
which has the impact of not incentivising some food crop based biofuels, has not been considered
here, as Article 29 of RED II requires that RED GHG methodology is used, i.e. that ILUC factors are not
included.

91

ICAO 2018 “CORSIA Default Life Cycle Emissions Values For CORSIA Eligible Fuels” https://www.icao.int/environmentalprotection/CORSIA/Pages/CORSIA-Eligible-Fuels.aspx
92 Norwegian amendment, May 2019, https://lovdata.no/dokument/LTI/forskrift/2019-04-30-555
93 SOU 2019 Biojet för flyget https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flygetsou-201911

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Renewable energy obligation for aviation in the Netherlands
Table 13 Comparison of potential approaches to crop-based biofuels

Approach

RED II

RED II plus palm ban

Exclude all food and
feed based crops

Follow RED II approach:
capped contribution
from food and feed
crops, and high ILUC
rules

Follow RED II approach,
but exclude palm and
palm products

Define SAF policy to
exclude food and feed
crops

Increased risk of impacts
from food and feed
crops as a result of
increased overall
demand, unless cap is
split with road
Baseline – no impact

Increased risk of impacts
from non-palm food and
feed crops as a result of
increased overall
demand, unless cap is
split with road
Reduced supply in the
near term as palm is
commonly used in HVO
plants

Impacts on:
Sustainability

Supply

Acceptability to
industry

Road transport
policy

Zero risk from food and
feed crops. Increases
pressure on UCO and
tallow sourcing until
other routes
commercialised
Could be impacts on NL
SAF supply if global UCO
and tallow demand
increases rapidly. Limits
mid term potential for
AtJ route
Perceived unfairness
Unacceptable for some
Unacceptable for some
between airlines with
airlines in producing
airlines in producing
internal commitments to countries. More
countries. Less
avoid palm and those
acceptable for airlines
acceptable for airlines
with none.
with internal
and fuel suppliers
commitments to avoid
prioritising cost, though
palm. Perceived
considered essential by
unfairness versus road
others. Perceived
transport sector.
unfairness versus road
transport sector.
Would require the crop biofuel volume in the road No impact
transport sector to be split with the aviation (and
potentially marine) sector (revising HBE targets), or
the total acceptable volume increased (with
sustainability impacts above)

Note that it would also be important to determine the treatment of co-products and residues from
food and feed crop production. Whilst some of these are listed as advanced feedstocks in RED II Annex
IX Part A, others are considered to be valuable co-products of food/feed production, which may to lead
to increased demand for the primary food/feed product. As a result, under current policy in several

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Renewable energy obligation for aviation in the Netherlands
countries including the Netherlands some of these have been considered not to be wastes, and so have
been excluded from double counting towards policy targets94.

7.3 Waste oils-based fuels
HEFA derived from used cooking oil and tallow is widely expected to be a major contributor to SAF
targets, as a result of the commercial status of the route today, and lower sustainability concerns than
virgin vegetable oils. Nevertheless, limited long term feedstock availability for this route has led to a
cap on contribution to RED II targets by biofuels produced from feedstock listed in Part B of Annex IX
(waste cooking oils and animal fats) of 1.7 %. Member States may modify this limit, taking into account
the availability of feedstock, providing this is justified and subject to approval by the Commission.
When a cap for the Netherlands is agreed as part of RED II implementation, it will be important to
define whether the cap represents the maximum amount of these feedstocks the Netherlands
considers acceptable to use in all fuels together (including road, aviation and shipping), or whether this
is a road cap alone, and further feedstock could be used in aviation and/or shipping. In that case, it will
need to be agreed what volume would be acceptable in these sectors. It is also important to agree
whether this cap will only apply for 2030, or be included in interim years’ targets.
Increased use of waste oils in the Netherlands in response to SAF policy is likely to lead to:
•

•

•

increased demand for waste oil feedstocks, which will increase the incentive to collect/recover
them. Some interviewees considered that there was considerable further potential for
sustainable recovery of waste oil feedstocks, and that the scope of sustainable waste oil based
feedstocks extended to many types of material aside from used cooking oil and tallow. Each
of these would need to be assessed against sustainability criteria.
Shifting of waste oil feedstock to NL SAF supply from the road transport sector. Use of Annex
IX, Part B feedstock is incentivised in many EU MSs by double counting towards RED targets,
rather than by any more binding supply obligation. As a result, if the price available to waste
oil suppliers from HEFA plants is higher than for FAME/HVO plants for road, then supply will
shift partly. The replacement for this supply could vary depending on the market: potentially
through more food and feed crop based biofuels (up to capped values in the EU, but potentially
higher elsewhere), or other compliance options (advanced biofuels, RFNBOs, renewable
electricity in transport).
Increased interest in sourcing oil feedstocks from other sources, such as oils from catch crops
and cover crops, to supply demands in all fuels sectors.

7.4 Advanced fuels
The 14% target in the Draft Agreement on Sustainable Aviation is not intended to be an end point, but
instead part of a trajectory towards decarbonised aviation in 2050, which could include higher levels
of SAF supply. Given the limited availability of waste and residue feedstocks for HEFA, and the much
larger availability of feedstocks for advanced biofuels and renewable electricity for PtL, successful
commercialisation of these routes will be very important to enable continued scale up for SAF use in
the NL and globally. However, these pathways to SAF are estimated to have higher production costs
94 NEa Grondstoffen in het REV - april 2019 https://www.emissieautoriteit.nl/documenten/publicatie/2019/04/29/grondstoffen-in-het-rev-

--april-2019

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Renewable energy obligation for aviation in the Netherlands
than HEFA, and are at an earlier stage of commercialisation today. As a result, plans in the aviation
and road sectors recognise the need for additional effort and/or support for these fuels in order to
make sure that they become available:
•

•

The Draft Agreement on Sustainable Aviation advocates cross sectoral effort to scale up
production of SAF from biomass and wastes through a Sustainable Aviation Knowledge
Initiative. This would include an integrated analysis and feasibility study for AtJ, pyrolysis and
HTL, and the start of a demonstration plant for preferred routes in 2020-2025.
The HBE system includes a sub target for advanced biofuels (RED Annex IX, Part A). The Dutch
Climate Agreement includes, other measures, such as the Stimulation of Sustainable Energy
Production scheme (SDE++) which it intends to increase the production and innovation of
sustainable advanced biofuels and renewable synthetic fuels.

Several options have been suggested to provide support to advanced biofuels and/or PtL compared
with HEFA from crops or waste and residues:
•

Sub target – this approach is used for advanced biofuels in RED II, and in the HBE system in NL.
o The advantage of a sub target is that it provides a clear market demand for advanced
biofuels, which can be used to underpin an investment case for advanced SAF projects.
Some interviewees considered that a sub-target, rather than other support types
alone, is essential to provide this investment case, and attract new players and
investment to the sector. The example was cited of the advanced biofuels sub target
under RED II, which are reported to be stimulating interest from new players – though
there havs not yet been enough time to see the imapacts of this interest in practice.
A sub-target is also economically efficient, in that the market will decide how best to
invest to meet the target.
o However, some interviewees were opposed to sub-targets, given that advanced SAF
routes are not proven today at scale. They felt that this would expose the industry to
unacceptable levels of risk, to risk of a high cost if a buy-out or penalty were in place,
and risk of the overall target not being met. This has been a common criticism of
targets for cellulosic biofuels for road in the US, but could be mitigated by a later
introduction date for the advanced sub-target, giving the sector time to scale-up
production.
o A sub target imposes additional costs on the sector, and so would increase the
economic impacts compared with those shown here, if advanced SAF routes have
higher prices, unless additional measures are used to reduce costs (see below).
o Setting a sub-target that is challenging, yet achievable can be complex as it relies on
an assessment of the likely available volumes of the desired fuels. If the sub-target has
a buy out price it would need to be set at a higher level than any buy out price for the
main obligation (as seen with the development fuels sub target under the UK RTFO),
to reflect the higher costs of advanced SAF routes. This can also be challenging, as
advanced routes themselves have a wide range of costs - a sub target set at a level to
encourage FT and AtJ may incentivise very little PtL - meaning that earlier stage routes
would require additional demand or supply side support, as set out below, or a
separate sub-target specifically for PtL which could have a different buy-out price and
date of introduction.

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Renewable energy obligation for aviation in the Netherlands
•

•

•

•

Additional supply or demand side support – additional supply or demand side support as
described in Chapter 4, such as capital grants, operating grants (similar to the SDE++ scheme)
or usage payment (similar to a feed-in tariff). These would be financed by government,
industry, or a combination of both.
o The advantage of this approach is that players with plans for advanced fuels
production are supported, without the industry having the risk of being obligated to
supply fuels that are not yet available
o A disadvantage of this approach is that funding is required for this support, either from
government (general taxation) or from the industry (e.g. via flight or passenger taxes),
or a combination of both. Support from general taxation would limit the economic
impacts on NL airlines, as would levying taxes on certain flights only (such as excluding
transfer passengers) to mitigate impacts on NL hub carriers.
o Another disadvantage is that in most of these options the additional support is limited
to a small number of successful bidders, and so does not provide a wider signal to the
market that advanced fuels will be required. In addition, SAF production companies
cannot build a business case based on support for one plant; they need to show a path
to scale up which relies on being competitive in a future, larger market. This could rely
on future rounds of support in NL or elsewhere.
Sub target with additional supply or demand side support - this option combines the market
certainty for investors of a sub target with mitigation of cost impacts for airlines, for example
a contract for difference payment for the additional cost of advanced biofuels compared to
HEFA, alongside an advanced fuel sub-target. This type of approach is used/under
consideration in the road transport sector in the Netherlands and several other MSs, such as
the UK. Several interviewees considered that this option was essential to ensure
commercialisation of advanced routes.
Higher buy out price – setting a higher buy out price could in theory allow sale of fuels with
higher production costs. However lower production costs for HEFA could allow HEFA to
undercut advanced fuel suppliers, meaning less certainty for investors.
Higher targets – setting high SAF targets increases the demand for all SAF routes. However,
the maturity and cost of the HEFA route make it likely that HEFA could grow faster to meet this
demand. This also does not provide certainty to investors.

Selection of which fuels to include in the additional support could be done in several ways:
•

•

List based – for example as in Annex IX, Part A, based on feedstock impacts and conversion
technology readiness. Some interviewees suggested additional support should be for PtL only,
as a result of sustainability risks for all biofuels – albeit without specifying how the
sustainability of PtL should be ensured.
Performance based – based on a list of criteria which could include technology readiness of
the feedstock or conversion technology, sustainability performance, production cost
differential versus fossil jet or versus HEFA. Some interviewees felt that this approach would
be more likely to stimulate innovation than a list-based approach. Some also consider that this
approach could be more stable over time than a list-based – although this is not necessarily
the case as sustainability impacts, in particular indirect ones, can change over time in ways
that are not predictable.This approach would entail additional costs for the government, as

73

Renewable energy obligation for aviation in the Netherlands

•

the administrator of the scheme would need to assess applications for support against these
criteria. This would be relatively straightforward if only a small number of plants were being
assessed, but difficult for fuels on a batch basis (as has been seen for approval of double
counting waste and residue feedstocks).
Based on GHG savings – some interviewees supported additional support based on the fuel’s
GHG savings alone. This approach would not be a viable way to support advanced fuels, many
of which may not have higher per tonne GHG savings than HEFA from wastes and residues.
The advantage of advanced fuels is their ability to lead to greater total GHG savings through
much higher sustainable supply volumes in the long term. This approach also does not take
into account non GHG sustainability risks or technology development status, many of which
cannot be quantified.

7.5 Sustainability criteria and certification
Several frameworks exist to evaluate risks to sustainability and compliance with sustainability criteria
and indicators, primarily from public policies and voluntary standards.
The level of required sustainability performance varies significantly between different frameworks. In
theory, sustainability should entail all three fundamental pillars in the Brundtland definition, namely
economic, social and environmental. Concretely, this means that SAF production should not only
preserve highly biodiverse areas, but also water resources, soil health, air quality, human rights,
economic conditions in local communities, etc.
It is therefore important to distinguish between voluntary standards aiming to comprehensively
address sustainability issues of SAF (e.g. RSB and ISCC) from policy frameworks focusing on the most
pressing environmental or social issues only. As an example of the latter, the Renewable Energy
Directive, both in its current (2009/28/EC) text and upcoming recast (2018/2001/EU) only addresses
environmental impacts of biofuels, RFNBOs and recycled carbon fuels in relation to land-use and lifecycle greenhouse gas emissions.

7.5.1 EU Renewable Energy Directive (2018/2001/EU)
Article 29 of EU RED II includes land-use criteria, which prohibit the use of feedstocks produced through
the conversion or degradation of protected areas, areas of high biodiversity value or lands with high
carbon value (e.g. wetlands, peatlands, forests). In the specific case of forest biomass, additional
criteria apply to ensure the legality of harvesting operations, the regeneration of harvested areas and
the maintenance of soil and long-term forest productivity.
Depending on the date of beginning of operations in production plants, the life-cycle greenhouse gas
savings to be achieved by biofuels used in transport are 50%, 60% and 65% for installations starting
operations on or before 5 October 2015, 31 December 2020 and after 1 January 2021 respectively. The
GHG calculation approach in RED II is based on a classic LCA approach using a “Well-to-Tank” scope,
i.e. the engine efficiency and combustion emissions are not taken into account (release of biogenic CO2
is assumed to have zero contribution to global warming potential). Direct land-use change of biomass
production is included in the calculation, but not indirect land-use change (ILUC). ILUC is however taken
into account through a phase-out process, which should progressively reduce the share of feedstock
considered as carrying “high ILUC risk”.

74

Renewable energy obligation for aviation in the Netherlands
Other impact categories such as soil health, water depletion, land rights or food security are not
included as compulsory requirements in EU RED II.
Note that Article 25 states that the GHG savings from RFNBOs shall be at least 70 % from 1 January
2021. As this is in Article 25 rather than Article 29, this would apply to fuels used to contribute towards
RED II targets, but need not necessarily be applied to policies that were not used to comply towards
this target. By 31 December 2021, the Commission will adopt a delegated act to specify the
methodology for assessing GHG savings from RFNBOs (which will ensure that the credit for avoided
emissions is not given for CO2 the capture of which has already received an emission credit under other
provisions of law) and a methodology for operators can use to prove that the electricity used in RFNBO
production is fully renewable (Art. 27) .
Two countries with SAF obligations planned appear to be adopting RED sustainability criteria. In its
document entitled “Biojet for Aviation” (SOU 2019:11)95, Sweden describes the sustainability criteria
for biofuels, in line with the EU RED, which are currently implemented in the Sustainability Act
(2010:598). Similarly, Norway is implementing sustainability criteria and default GHG values from EU
RED96 in its Regulation on restrictions on the use of hazardous chemicals and other products (product
regulations) - Chapter 3. Requirements for biofuels and sustainability criteria for biofuels and liquid
biofuels.

7.5.2 CORSIA
The recently approved sustainability requirements in CORSIA have a comparable scope to those in EU
RED II, since they also focus exclusively on land-use impacts and GHG savings. Sustainability criteria in
CORSIA include:
•
•

An obligation to emit at least 10% less greenhouse gas compared to a baseline for aviation
fuels on a life-cycle basis;
The exclusion of use of biomass from converted or degraded primary forest, wetlands or
peatlands. Note: as in RED II, the cut-off date for land conversion is set as January 1, 2008.

The GHG calculation methodology also follows a classic attributional LCA approach, in line with EU RED
II. However, notable differences exist between EU RED II and CORSIA97:
•
•

•
•

The scope of GHG calculations in CORSIA includes engine efficiency and combustion emissions,
which makes the scope “Well-to-Wheel” (vs “Well-to-Tank” in RED II).
CORSIA allows attribution of zero emissions from cultivation and no ILUC emissions to waste,
residues and by-products, which cover a wide range of feedstocks, including crude tall oil
(CTO), Palm Fatty Acid Distillates (PFAD) and technical corn oil (TCO), which is not the case in
RED II;.
Indirect (or “induced” as per CORSIA’s terminology) Land-Use Change is included in the GHG
calculations, following a consequential LCA approach.
Required minimum GHG savings are much lower in CORSIA than in RED II (10% vs 50-65%).

95

SOU (2019) Biojet för flyget, Available from :
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911
96 Lovdata, Available from: https://lovdata.no/dokument/SF/forskrift/2004-06-01-922/KAPITTEL_4#KAPITTEL_4
97 ICAO (https://www.icao.int/environmental-protection/CORSIA/Documents/ICAO%20document%2005%20%20Sustainability%20Criteria.pdf)

75

Renewable energy obligation for aviation in the Netherlands
Therefore, complying with EU RED II would theoretically ensure compliance with CORSIA’s land-use
restrictions, but CORSIA requires different GHG accounting, which may result in different policy
treatment of the fuel.
Under CORSIA, the required level of assurance is defined as “reasonable” (as per ISAE 300098), which
is a stronger level than “limited”99. While the framework for assessing voluntary schemes against RED
II is not known, the previous framework (used under RED I) only required a “limited” level of assurance.
If voluntary schemes undergoing EC recognition against RED II are only required to ensure a “limited”
level of assurance CORSIA would therefore ensure a stronger level of assurance. Consequently,
certificates and claims of compliance under CORSIA could be considered more robust than under RED
II.

7.5.3 Voluntary standards and certification schemes
A large number of EU-approved voluntary standards and certification schemes are currently available
to fuel producers and retailers in order to demonstrate compliance with EU RED II. A significant share
of these schemes were developed and implemented only for legal compliance with EU RED and
therefore are limited to the same land-use and GHG criteria as in EU RED. This is for example the case
for 2BSvs, Red Tractor or Red Cert. There are, however, standards which address sustainability issues
of biofuels more comprehensively at environmental, social and economic levels. Several of these
schemes are “roundtables”, with a higher degree of inclusiveness and transparency. Examples include
the Roundtable on Sustainable Biomaterials (RSB), Bonsucro, and the Roundtable for Responsible Soy
(RTRS).
In addition, it is important to note that important variations exist between certification schemes
regarding the compliance evaluation process, also known as “assurance”. Relevant aspects include the
procedure for training, accrediting and monitoring auditors and certification bodies, the audit process
itself (e.g. the number of sites to be included in a sample for physical visit in the case of a multi-site
scope), the compliance/non-compliance decision process, the issuance, renewal or suspension of
certificates, and rules about the use of compliance claims. Following numerous criticisms, the
European Commission issued several communications and improved EU RED II to ensure that a
minimum level of assurance could be guaranteed among all EU-approved schemes. However, the
protocol used by the European Commission for recognition of voluntary schemes only requires a
“limited” level of assurance (as per ISAE 3000), which is lower than a “reasonable” level, as required
by most roundtables and CORSIA (see previous section).
In 2013, the WWF issued an important publication100, which compared a selection of EU-approved
schemes against a set of benchmark criteria, with the aim to evaluate their comprehensiveness in
addressing biofuel sustainability issues, ensuring a robust assurance system and implementing a
transparent and inclusive governance process. The following tables show that large discrepancies exist
between schemes focusing on EU RED compliance and schemes with a broader scope. While several
schemes further improved on content and implementation after the publication of the WWF report,

98 ISAE, Available from: https://www.ifac.org/system/files/downloads/b012-2010-iaasb-handbook-isae-3000.pdf
99 ICAO document “CORSIA Eligibility Framework and Requirements for Sustainability Certification Schemes” 2019
100 WWF (2013), Searching for Sustainability, Available from:

http://awsassets.panda.org/downloads/wwf_searching_for_sustainability_2013_2.pdf

76

Renewable energy obligation for aviation in the Netherlands
the clear contrast between schemes aiming to implement a comprehensive set of criteria and those
limited to EU RED compliance remain relevant.

Figure 13 Comparison of environmental criteria in EU-approved schemes (Source: WWF)

77

Renewable energy obligation for aviation in the Netherlands

Figure 14 Comparison of socio-economic criteria in EU-approved schemes (Source: WWF)

Similar results were observed in following publications by FAO 101 , the International Union for
Conservation of Nature (IUCN) 102 and the Natural Resource Defense Council (NRDC 103). In its 2017
aviation scorecard104, NRDC confirmed its recommendations for airlines to commit to source RSBcertified aviation biofuels only.
The recognition of RSB by several influential social and environmental organisations as one of the most
credible biofuel certification schemes is seen by the aviation industry as a solid safety net to ensure
alternative fuels deliver on sustainability promises and are traceable across the supply chain, as
illustrated by the pledge taken by the members of the Sustainable Aviation Fuel Users Group
(SAFUG)105. Some interviewees were concerned that adoption of the REDII sustainability criteria by an
NL obligation would result in the bulk of fuel supplied in NL meeting a lower standard of sustainability
than they themselves would require, such as RSB or ISCC+ certification, meaning that they would need
to pay more than other airlines if they required their fuel suppliers to supply fuel meeting their more
stringent standards.

101

FAO, Available from: http://www.fao.org/bioenergy/31594-044649dd008dd73d7fa09345453123875.pdf

102 IUCN, Available from: https://cmsdata.iucn.org/downloads/betting_on_best_quality.pdf
103 NRDC (2014), Available from: https://www.nrdc.org/sites/default/files/biofuels-sustainability-certification-FS.pdf
104 NRDC (2017) Available from: https://www.nrdc.org/sites/default/files/aviation-biofuels-sustainability-scorecard-2017.pdf
105

SAFUG, Available from: http://www.safug.org/safug-pledge/

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Renewable energy obligation for aviation in the Netherlands

7.5.4 Conclusions
The previous sections demonstrate that the level of sustainability of aviation fuels may vary greatly
depending on which framework is used to evaluate compliance. An obligation or any other form of
financial support in NL would need to follow the RED II requirements, but could not go beyond them
as explained in section 4.2. However, as set out in the table below, this would not be sufficient for
some airlines (who could voluntarily go beyond the RED II standards), and would not necessarily mean
that fuels incentivised by these policies would meet CORSIA requirements, which are still in
development.
Table 14 Overview of main differences in requirements for aviation fuels between EU RED, CORSIA
and comprehensive voluntary schemes

EU RED II (incl.
voluntary schemes
limited to RED
compliance)

CORSIA (incl.
recognised
certification
schemes106)

Comprehensive voluntary
schemes (e.g. RSB, ISCC,
Bonsucro)

Feedstock
restrictions

Cap on crop-based
feedstocks.
Phase-out high-iLUC
feedstocks.

Some schemes are
feedstock-specific, e.g. RSPO
(palm only), RTRS (soy +
corn), Bonsucro (sugar).
RSB, ISCC and Better
Biomass can be used with
any feedstock.

Biodiversity

No-go areas include
grasslands and forests
with high biodiversity,
primary forests, and
protected areas.
Forests, wetlands and
peatlands

No feedstock
restriction. CORSIA’s
definitions of waste
residues and byproducts include a
much wider range of
feedstocks (e.g. CTO,
PFADs)
No-go areas limited
to primary forests.

High Carbon
Land

Wetlands and
peatlands

Any area with high
biodiversity or conservation
values. Protection of
ecosystem services and
functions.
Any area with high carbon
stock.

Minimum GHG
Threshold

50-65%

10%

Variable (at min. aligned
with EU RED)

ILUC

Not included in GHG
calculations.
Risk-based approach.

Not included in GHG
calculations.
Low iLUC certification (RSB).

Other
environmental
criteria

Soil quality taken into
account for
agricultural residues
and forest biomass.
None

Included in GHG
calculations (not for
waste, residues and
by-products).
None. Ongoing work
from CAEP on other
criteria.

Socio-economic
criteria

106

None

Water depletion and
contamination, soil health,
air quality, use of GMOs,
waste management.
Working conditions
Food security

No certification schemes are currently recognised under the CORSIA mechanism. Therefore, several elements in the table are unknown.

79

Renewable energy obligation for aviation in the Netherlands

Chain-of-Custody

Mass Balance only

Mass Balance only

Assurance level
(As per ISAE
3000)

Limited

Reasonable

Governance

Limited number of
stakeholders and
inclusiveness. EC
requires transparency
over constituencies to
avoid conflicts of
interest.

CORSIA requires
certification schemes
to have a process in
place for stakeholder
engagement and a
complaint
procedure.

Land/Water rights
Local communities
Smallholders
Segregation
Mass Balance
Book & Claim
Reasonable

Generally multi-stakeholder
and consensus-based.
Actively seeking inputs from
NGOs, civil society and
academics to balance inputs
from private sector.

7.6 Reducing the risk of fraud
Because feedstocks included in EU RED II Annex IX generally benefit from specific policy incentives (e.g.
sub-target, double-counting), a risk exists that false claims be made regarding the origin or nature of
feedstocks. Under the existing RED, several cases of fraud in biofuel used for road transport have been
reported. An ongoing investigation in the Netherlands aims to determine whether conventional
feedstock (e.g. palm oil) was traded as waste/residue (e.g. UCO 107 ), thus unduly benefiting from
economic incentives in the country of retail. While the European Commission has implemented
additional measures regarding the origin of waste and residue in the context of biofuel certification
schemes108, fraud risks remain important, especially for waste and residues derived from complex
supply chains.
Fraud risks can be described according to 1) the elements incentivising fraud (e.g. policy support, price
premiums, etc) and 2) the elements enhancing the opportunity for fraud (e.g. operators’ size, local
regulation, group certification, etc.).
•

•

Elements incentivising fraud relate to the profit to be gained from fraud. They stem from a
combination of policy incentives (e.g. sub-targets) and market patterns (e.g. feedstock market
prices, available supply, etc.) leading to significant profits to be gained from intentional fraud,
e.g. by substituting feedstocks. Specific national mandates on aviation fuels may add to the
elements incentivising fraud if implemented through economic incentives further increasing
potential profits for fraudulent operators.
Elements enhancing fraud relate to the ease of fraud. They are mostly related to the type and
complexity of supply chains, the size of economic operators, the type of chain-of-custody
system used, etc. Aviation fuel supply chains are particularly complex given the large number

107

DutchNews (24 May 2019) Available from: https://www.dutchnews.nl/news/2019/05/dutch-company-embroiled-in-biodiesel-scandalearning-millions-vk/
108 European Commission (2014) Note To The Voluntary Schemes That Have Been Recognised By The
Commission For Demonstrating Compliance With The Sustainability Criteria
For Biofuels, Available from: https://ec.europa.eu/energy/sites/ener/files/documents/2014_letter_wastes_residues.pdf

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Renewable energy obligation for aviation in the Netherlands
of economic operators involved (fuel producers, fuel retailers, airports, airlines), which may
also aggravate the risk of fraud.
Concretely, the different types of fraud can be defined as follows:
•

•

•

•

•

Fraud over feedstock types and sustainability characteristics. A risk exists that different
feedstocks get fraudulently mixed in a given batch of certified raw material used for jet fuel
production. Due to their inconsistent composition in fatty acids, used cooking oil and other
waste oil are particularly vulnerable as detecting the presence of other virgin vegetable oil (e.g.
palm oil) would require advanced chemical analysis. Whenever feedstocks from different
origins are fraudulently mixed in a batch of certified raw material, their origin, production
processes and potential social/environmental impacts cannot be known, thus leading to
uncertainty over sustainability characteristics as well.
Fraud over biofuel contents in blend. The exact amount of biofuels mixed with jet fuels in a
blend may be difficult to track, especially in the case of drop-in aviation fuels produced through
co-processing. To overcome this, clear rules on mass balance through the supply chain are
required, including in pipelines (across different countries) and in co-processing.
Fraud over final country of consumption. The business model of fuel trading and related
transactions being extremely complex and dynamic, a risk exists that a batch of SAF expected
to be consumed in the Netherlands is eventually traded again to a different country. This can
be overcome by using the point at which fuel is uplifted into the aircraft as the point of control.
Fraud over claims. Biofuel producers sourcing both compliant and non-compliant feedstocks
use a mass balance system, which allows compliance claims over a limited volume of outgoing
fuels. Eligible volumes of compliant fuels correspond to the volumes of compliant feedstock
entering the process. Whenever some volumes of compliant biofuels remain unsold at the end
of the mass balance accounting period (generally 3 months), the corresponding claims can be
carried over onto the following accounting period. Operations involving continuous
production (as opposed to batch processing) are at risk of incorrect accounting of eligible
volumes and associated claims, thus leading to the risk of operators claiming higher volumes
of compliant fuels than actually allowed.
Fraud over false certificates. Reports of false certificates are frequent among the most widely
used certification schemes, such as ISCC109. Thus, a risk exists that the certificate attached to
a batch of feedstock/fuel is false or expired.

Fraud risks in SAF can be efficiently reduced by implementing strict rules on traceability by imposing,
for example, the possibility for auditors to trace waste oil and fats up to the generators (e.g. industrial
fryers) or requiring chemical analysis over a sample of raw material/biofuel batches from countries
considered sensitive. Robust and consistent assurance schemes are another meaningful safeguard to
reduce the risk of fraud, including the proper training, accreditation and monitoring of assurance
providers (auditors, certification bodies and accreditation bodies).

109

ISCC (2019) Fake certificates, Available from: https://www.iscc-system.org/certificates/fake-certificates/

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Renewable energy obligation for aviation in the Netherlands

8 Promoting SAF production in the Netherlands
Summary
•

•

There are planned SAF plants in the Netherlands today, and interest in further production
in the 2020s. Planned and potential production volumes could be used to inform the levels
of interim targets to ensure that it is at least possible to supply a high proportion of demand
from production in the Netherlands.
Supplying 14% SAF in the Netherlands in 2030 via new HEFA plants would require additional
investment of €230 and €730 million, with the potential for around 300 additional
permanent jobs.

Whilst it is not possible for an obligation to favour fuels produced from one country over those from
another, it is important to consider when designing a policy whether players in the Netherlands will be
in a position to respond to the new demand, and whether there are options for the obligation design,
or for supporting supply side policies, that could promote production in the Netherlands.

8.1 Planned SAF production in the Netherlands
There are several SAF projects planned or under consideration in the Netherlands:
•

•

•

SkyNRG in collaboration with KLM, SHV Energy and Schiphol Group, announced a project to
build the first SAF plant in Europe in May 2019. This greenfield plant, called DSL-01, is planned
to start commissioning in 2022 with an output capacity of 100 kt/y of SAF and 15 kt/y of bioLPG
as a by-product. The type of SAF produced will be HEFA, and KLM has already committed to a
75 kt/y off-take agreement over 10 years110.
A consortium led by EDL Anlagenbau Gesellschaft mbH is planning the realisation of a PtL FT
pilot plant at Rotterdam The Hague Airport, which aims at producing SAF from electricity,
water and CO2 directly captured from air. The plant will combine electrolysis technology
provided by Sunfire, Direct Air Capture technology by Climeworks and Fischer-Tropsch
synthesis by Ineratec. Once completed the plant will produce 1,000 litres of SAF per day which
could potentially be sold to Transavia. The airline has already committed itself to this project
and intends to reduce its CO2 emissions through SAF use111.
Neste is considering HEFA production in Rotterdam alongside their HVO plant. This would
require investment of more than €100 million, a lower figure than if a plant were built at a
separate location 112 . Neste has also established its global renewable aviation business in
Amsterdam (Hoofddorp).

110 SkyNRG, May 2019, Press Release, https://skynrg.com/press-releases/klm-skynrg-and-shv-energy-announce-project-first-european-

plant-for-sustainable-aviation-fuel/
111 EDL, May 2019, Press Release, http://www.edl.poerner.de/en/news-edl/edl-pressemeldung/news/erneuerbarer-flugtreibstoff-ausluft/?tx_news_pi1%5Bcontroller%5D=News&tx_news_pi1%5Baction%5D=detail&cHash=045386c0c780f08a79fecb233e4c5aec
112 Fd April 2019 ‘Maasvlakte in beeld voor fabriek voor duurzame kerosine’ https://fd.nl/ondernemen/1295586/maasvlakte-in-beeld-voorfabriek-voor-duurzame-kerosine# and October 2019 ‘Finse producent van biokerosine nestelt zich bij Schiphol’
https://fd.nl/ondernemen/1319534/finse-pionier-met-biokerosine-nestelt-zich-nabijschiphol?_ga=2.111083525.1404910842.1573041266-188964628.1573041266#

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Renewable energy obligation for aviation in the Netherlands
In addition, the Netherlands has several advantages as a location for SAF production, which could lead
to interest from more players in the future. However, interviewees considered that this would rely on
supportive policy in the Netherlands, such as an obligation, as there are many other locations with
similar benefits.
•

•

The Netherlands is a key oil product trading hub with 50% of European fossil kerosene traded
in the country75. Future biorefineries built in the Netherlands could benefit from a welldeveloped distribution infrastructure and logistic network to sell their products domestically
or to other countries. Conventional ethanol plants currently operating in the country could
also help supporting the development of a Dutch SAF industry for the AtJ route.
The Netherlands has high density of crude oil refineries. There are 6 operational refineries
located in the country, mainly concentrated around Rotterdam, with a combined throughput
of 60 million tonnes of crude oil per annum113. Most of these refineries produce some fossil
jet fuel, but none of them is co-processing vegetable oil at commercial volumes. In other
countries, oil refineries are already co-processing biomass feedstocks in commercial
quantities. If all Dutch oil refineries dedicated to fuel production started co-processing 5%
vegetable oil, about 2 Mt/y of vegetable oil demand would be created. The exact volume of
SAF produced from this feedstock is not straightforward to determine, because this will
depend on specific plant product slates and on how the renewability is allocated to multiple
products. However, considering the absolute volume of vegetable oil feedstock required it can
be concluded that a significant amount of SAF could potentially be generated in the
Netherlands without building additional capacity.

8.2 Policy choices to support production in the Netherlands
Based on the plants planned or under consideration above, the potential evolution of SAF capacity in
the Netherlands to 2030 is shown below (

113

Concawe, Refineries map, NL 2017, accessed Oct 2019, https://www.concawe.eu/refineries-map/

83

Renewable energy obligation for aviation in the Netherlands
Table 15), with a corresponding percentage of the Dutch aviation fuel demand (no demand response
effects included). Whilst there is no guarantee that fuel produced in the Netherlands will be sold in
the Netherlands, this gives an indication of the maximum potential supply from Netherlands. Post
2026, the potential is considered unlimited by plant capacity, since if a policy were introduced in 2020,
the time taken to plan, construct and commission a HEFA plant is between 4 and 5 years (and faster
for low levels of co-processing), while for thermochemical routes it takes between 5 and 6 years.

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Renewable energy obligation for aviation in the Netherlands
Table 15 Potential evolution of SAF capacity in the Netherlands

Year

SAF supply
(kt/y)

Supply basis

% of Dutch aviation
demand74

Associated road
transport fuel
production (kt/y)

2022

100

SkyNRG

2.4% (of 4.2 Mt)

30 (aviation optim.)

2025

200-250

4.4% - 5.6% (of 4.5 Mt)

60 – 75 (aviation
optimised scenario)

Post
2026

Unlimited

SkyNRG plus additional HEFA
plants (based on industry
estimates in the Smart and
Sustainable plan) plus demos
of advanced routes
Plants that could be planned
from 2020 onwards

-

-

This information could be used to consult on the basis for targets for interim years, as discussed in
section 5.4.7. Whilst demand side policy cannot preferentially support production in the Netherlands,
additional supply side support could be given for plants in the plants in Netherlands where this is
permissible under State Aid rules, i.e. for non-food SAF routes with high production costs (see section
5.2). It is also important to note that the way in which RED II is implemented, which is likely to vary
between MSs as seen from REDI and policy announced to date, will affect the most likely locations for
sustainable fuel production, including SAF.

8.3 Economic opportunities from SAF production
If the 14% SAF obligation were met through domestic fuel production, the economic and employment
opportunities for the Netherlands would largely depend on the mix of SAF routes. However, by 2030,
most interviewees expected that the predominant production route will be most likely HEFA.
Supplying 14% jet fuel in the Netherlands through HEFA is projected to require 700 kt/y by 2030. The
SkyNRG plant is expected to come online in 2022 with 100 kt/y of HEFA production. Assuming the
entirety of this volume was sold on the domestic market, there would be 600 kt/y of HEFA left to
supply. This could be supplied by new HVO plant capacity, and/or by co-processing at Dutch refineries,
or by advanced routes. In a scenario where the fuel output was optimised for jet fuel production,
supplying the remaining 600 kt/y of HEFA would require 2 dedicated plants with a nameplate capacity
of 350 kt/y (of total fuel). This capacity is an average across current and planned HVO plants globally.
According to techno-economic studies, a commercial greenfield HEFA plant with a nameplate capacity
of 350 kt/y has a unit capital cost between €320 and €1040 per tonne of liquid fuel produced 114.
Therefore, the total capital required ranges between €230 and €730 million, which is in line with the
estimate given in the “Smart and Sustainable” plan75. This uncertainty range is given by the fact the
unit capital cost varies depending on the plant size, nth of a kind/first of a kind deployment and level
of integration with pre-existing facilities (i.e. greenfield vs brownfield). For example, building a single
700 kt/y HEFA plant could reduce the total investment by about 25%, at parity of other conditions114.
114 Calculation based on de Jong (2015). Total investment cost of HEFA plant 200 – 644 MEUR(2013) scaled to 350 kt/y capacity using

scaling factor 0.6. Costs adjusted using 2018 CEPCI. Source: de Jong, 2015, “The feasibility of short-term production strategies for
renewable jet fuels…”, http://doi.wiley.com/10.1002/bbb.1613

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Renewable energy obligation for aviation in the Netherlands
Neste Rotterdam plant’s capital expenditure falls within the uncertainty range, with a unit cost of €670
per tonne of fuel115.
Additionally, SAF production has associated volumes of road transport biofuel production. A HEFA
plant designed to produce mainly jet fuel could generate up to 30% road transport fuels. These coproducts would increase the export potential for the Netherlands, to a growing EU market driven by
REDII.
Building 2 extra plants in the Netherlands could provide about 300 new permanent jobs. This is based
on the assumption that the workforce required by this type of plants is to large extent inelastic to plant
capacity and equal to 150 employees per facility116.

115 Total expenditure for Neste’s Rotterdam plant is €670 million and it produces 1 Mt/y of renewable products (800 kt/y of HVO + other

products). Source: https://www.neste.com/neste-oil-builds-europes-largest-renewable-diesel-plant-rotterdam
116
Both Neste’s Rotterdam plant (1,000 kt/y) and World Energy’s Paramount refinery (128 kt/y) have 150 employees.

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Renewable energy obligation for aviation in the Netherlands

9 Economic impacts
Summary
•
•
•
•
•

A kerosene blend containing 14% SAF is anticipated to cost between €178/tonne and
€276/tonne more than fossil kerosene, as a result of high SAF costs and prices.
If all of these costs are passed on to passengers, this represents an increased cost per
passenger per flight of around €7 for short-haul flights and around €33 for long-haul flights.
The costs imposed by an obligation result in lower passenger numbers due to demand
reduction, mode-shifting, and use of alternative routes.
This has an economic impact on all actors in NL aviation sector, in particular airlines with
hubs in the Netherlands.
Detailed economic impact assessment will be needed once policy options are narrowed
down further, to compare the expected costs versus expected benefits in terms of GHG and
the reduction of other air pollutants.

9.1 Direct economic impacts of an obligation
9.1.1 Incremental costs of SAF
The incremental costs per tonne of sustainable aviation fuels compared with fossil jet are the root of
the majority of the economic impacts of a SAF obligation, with other costs arising from the
administration of an obligation. These incremental costs are made up of the incremental price of SAF
compared with fossil jet, plus any additional costs of handling. The incremental costs of handling are
expected to be very low once SAF is handled in co-mingled logistics systems, of the order of €10/t,
compared with hundreds of euros per tonne with a segregated supply chain. As this figure is very low
compared with the variability in SAF production cost, we have not considered this in the costs below.
Production costs of SAF are estimated to be between 2 and 8 times the price of fossil jet, with a wide
variation between SAF routes.

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Renewable energy obligation for aviation in the Netherlands
Table 16 below shows production costs for different routes from two sources for NOAK plants built
today. Interviewees were generally in agreement with these costs, although some were more
optimistic over the costs of some routes, such as FT from municipal solid waste, and pyrolysis oil routes.

88

Renewable energy obligation for aviation in the Netherlands
Table 16 Production cost of SAF from different conversion routes (€/tonne)

Route
HEFA
Gasification+FT

de Jong (2017), as used in CE Delft (2019)
1,200
1,800 – 2,600

DSHC
AtJ

5,000 – 6,500
2,200 – 3,500

Pyrolysis
HTL
PtL FT

1,200 – 1,900
900 – 1,200

ICCT (2019)117
1,100 (UCO) – 1,350 (soy)
1,700 (from MSW feedstock) to
2,300 (energy crops)
4,800
2,050 (from sugar cane) to 3,050
(energy crops)
3,000

However, the price of SAF in the market will not be determined only by the production cost. The price
will as a minimum include necessary margins for SAF producers and fuel suppliers, and in cases where
the market is short, could include large margins for fuel suppliers:
•

•

If there are high levels of supply of SAF compared with demand from other countries with
obligations, the price for each SAF type will be set by the market prices for the fuels in the road
transport sector, as this is a larger market than the aviation sector, plus some additional costs
to cover the higher costs of SAF production compared with road transport biofuels production.
The market price for SAF in NL will depend on the marginal compliance option, but this is most
likely to be HEFA in this case.
If there are low levels of supply of SAF compared with demand from other countries with
obligations, the SAF price could be much higher. Large margins could be made by the players
at the point of constraint. Currently this is the SAF supplier, given the low global production
capacity, but in the future could increasingly be the feedstock supplier for waste oils
feedstocks, as pressure grows on these resources. The price would be limited by either
o the buy out price, or penalty price for non compliance with the obligation,
o If there is no buy out/penalty price, the price could in theory increase indefinitely.
However, given that the HVO capacity globally is likely to be very high compared with
the level of HEFA demand in obligated countries, a very high SAF price will create a
strong driver for production of HEFA or HEFA+ (once certified) from this capacity. This
could be done in the near term through secondary processing at a third party site, or
in the medium term through developers of new plants including steps required to
produce HEFA. This would limit the time period over which much higher prices would
be seen. Note that the period of higher prices would be longer depending on the
shortfall in the market, which could be large if large obligations (such as an EU-wide
obligation are introduced at high levels.

Overall, it seems unlikely that the price would rise high enough to make supply of any routes viable
that were significantly more expensive than the HEFA price. Given the large margin that may be made
in the HEFA supply chain, given its production costs, it may be easy for HEFA suppliers to undercut
suppliers of other fuels even if they can reach these levels. If other routes cannot supply at near this
117 Pavlenko N. et al. (ICCT), 2019, “The cost of supporting alternative jet fuels in the European Union”,

https://theicct.org/sites/default/files/publications/Alternative_jet_fuels_cost_EU_20190320.pdf

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Renewable energy obligation for aviation in the Netherlands
price in the near term, additional support may be needed to help bring their costs down, given the
limited feedstock availability for HEFA (see section 7.4). This would be less important if the price of
HEFA were to rise signifincatly as a result of feedstock competition.
Currently, there is limited information on HEFA prices, given the early stage of development of the
market. Interviewees stated that HEFA prices in Sweden were expected to be close to fossil jet fuel
plus the buy-out price, or a total of around €2500/t118. We have used this as the higher bound case.
The lower bound estimate can be made based on the production cost of SAF, plus margins currently
made by HVO producers119.
Table 17 SAF price assumptions

Assumption

Value

Unit

Reference

Price of fossil kerosene
SAF price (high)

530
2500

€/tonne
€/tonne

SAF price (low)

1800

€/tonne

SAF price (average)

2150

€/tonne

Estimated from maximum value of Swedish buy
out plus kerosene price
Estimated from HEFA production cost + margin for
HVO producers today
Average of high and low figure

The additional cost of SAF compared with fossil kerosene is €1270/tonne under the low SAF price
scenario, and €1970/tonne under the high SAF price scenario.
For increasing blends of SAF in kerosene, the estimated fuel price and incremental additional cost
compared to fossil kerosene are shown in Table 18 below.
Table 18 Estimated additional fuel price under various SAF blend scenarios

%mass SAF in
blend

Estimated blended fuel price
(€/tonne)

Additional cost compared to fossil jet
(€/tonne)

High SAF price

High SAF price

7%
14%

668
806

Low SAF price
619
708

138
276

Low SAF price
89
178

9.1.2 Costs to fuel suppliers
Fuel suppliers would be likely to pass all of the additional cost of SAF onto the airline, plus a small
additional margin to cover their additional costs of sourcing, sustainability assurance etc, plus
administration related to complying with the obligation if they were the obligated party (estimated by
interviewees to be less than the costs of employing one full time equivalent person). Fuel suppliers
estimated that any additional costs related to logistics, such as the need for new or repurposed tanks
for blending, and additional testing against fuel specifications, would be low on a per tonne basis. Fuel
suppliers could make higher margins if they had access to SAF in a short market (for example through
having invested in supply chains themselves or made offtake agreements), but this would be a portion
of the supply margins already estimated above. Competition between the multiple fuel suppliers at
118 Sweden buy-out 6 SEK/kgCO

2eq. Source: SOU, 2019, “Biojet för flyget”, PDF p201,
https://www.regeringen.se/493238/contentassets/6d591e58fd9b4cad8171af2cd7e59f6f/biojet-for-flyget-sou-201911
119 600 USD/t sale margin. Source: Neste, Annual Report 2018, https://www.neste.com/corporate-info/news-inspiration/materialuploads/annual-reports

90

Renewable energy obligation for aviation in the Netherlands
Schiphol, would in theory counteract the suppliers’ ability to gain margins above these market prices.
Given the competitive nature of the aviation fuels market, fuel suppliers interviewed stated that they
would not choose to cross subsidise the additional cost of SAF in the Netherlands from sales of fossil
jet in other markets, or from sales of other fuels.

9.1.3 Costs to airlines
Based on the assumptions on the estimated additional fuel cost per tonne and two illustrative flights120,
an estimation can be made of the additional cost of fuel per flight:
•
•

Short-haul flight from Amsterdam to Rome on Boeing 737- flight distance 1,300 km, 160
passengers, 5 tonnes fuel burnt
Long-haul flight from Amsterdam to New York on Boeing 777- flight distance 5,800 km, 310
passengers, 47 tonnes fuel burnt

Costs presented in Table 19 are additional to fuel costs of €2,663 for a short-haul flight and €25,009
for a long-haul flight under the assumptions noted above.
Table 19 Estimated additional fuel costs per flight, under 2 representative SAF blend scenarios

% SAF blend

7%
14%

Additional fuel cost for a short-haul
flight (€)

Additional fuel cost for a long-haul
flight (€)

High SAF price

High SAF price

667
1,335

Low SAF price
421
842

6,268
12,536

Low SAF price
3,956
7,911

For an airline buying 250 ktonnes/year of fuel in the Netherlands (equivalent to 5% of estimated 2030
kerosene use in the Netherlands) the total additional cost under the 14% SAF blend scenario would be
between €42M and €67M. This corresponds to an additional cost between 27% and 44% compared to
not having a 14% obligation.

9.1.4 Costs to passengers
Airlines could pass on their costs in several ways:
a) Pass on full additional cost to the flights which refuel in the Netherlands
b) Spread additional cost across all customers globally
c) Intermediate situation where a higher portion of the incremental cost is passed on to
passengers on flights refuelling in the Netherlands than elsewhere, but not the full cost.
Interviewees stated that airlines would be likely to do a combination of a) and c), as well as absorbing
some costs from their margins. The choice will depend on the airline’s key competitors on each route,
and whether they are subject to the same obligation.
Based on the fuel cost assumptions above, the additional cost of a flight ticket under a scenario where
the full cost of meeting the obligation is passed onto passengers on that flight can be estimated, for
the two flights described above. Assuming that the total cost of meeting the obligation across the flight

120 Aircraft information from Source: ICCT, 2018, Transatlantic Airline Fuel Efficiency Ranking 2017,

https://theicct.org/sites/default/files/publications/Transatlantic_Fuel_Efficiency_Ranking_20180912.pdf

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Renewable energy obligation for aviation in the Netherlands
is passed on equally to all passengers, the additional cost per passenger per flight is illustrated in Figure
15.

Figure 15 Additional flight price per passenger in case of SAF cost fully passed -on. Bars illustrate use
of average SAF price, uncertainty intervals refer to high and low SAF price

Under the 14% SAF blend scenario this represents an increase on the short-haul ticket price of between
3% and 4% (assuming a return ticket price of €200121) and increase on the long-haul ticket price of
between 6% and 10% (assuming a return ticket price of €400121). The additional cost paid on a return
ticket is the same as on a one-way ticket because the SAF blend is assumed to be uplifted only once.
This provides an approximation only, as the additional cost may not be spread equally between
passengers, for example between those flying business and economy class (low-cost passenger
segments are more price sensitive than those flying business class122). It would also be possible for
airlines to try to pass some of the costs onto particular passengers e.g. through schemes allowing
corporate customers to pay for SAF use to cover the demand from their business flights. However,
these customers may be unlikely to want to pay extra for SAF supply if this was already mandated, and
so would be supplied in any case. This also assumes that no portion of the additional SAF cost is borne
by freight carried on passenger flights.
Scenario (b) represents the other extreme: airlines spread the additional cost across all of their global
operations. If refuelling in NL was 5% of the airline’s fuel use, then in theory only 5% of the cost in
Figure 15 would be passed on to consumers. This equates to a price increase on the short-haul ticket
of €0.26 - €0.42 / person.flight and a price increase on the long-haul ticket of €1.26 - €2.00 /
person.flight (assuming passengers/tonne fuel is constant). Airlines that have a high proportion of
their total fuel uplift in NL will have a much more limited ability to spread costs amongst other
passengers. Note that there may be additional costs from obligations in other countries and from
CORSIA.

121

This is an indicative price for a round-trip Amsterdam-New York in end of January 2020, booked 2 months in advance. Prices have been
taken from https://www.skyscanner.net/. Prices can vary significantly depending on airline, booking date, flight date, flight time, economy
vs business class.
122 CE Delft (2017) Overheidsmaatregelen biokerosene, Available from: https://www.ce.nl/publicaties/1980/overheidsmaatregelenbiokerosine

92

Renewable energy obligation for aviation in the Netherlands
There would also be impacts on the cost of air freight, which would vary for belly freight (in passenger
aircraft, where costs could be shared with passengers) and cargo-only aircraft.

9.1.5 Costs to airports and airport fuel suppliers
Given that SAF blending cannot occur within the boundary of an airport, there are not anticipated to
be any additional direct costs to the airport of complying with a blending obligation. Indirect impacts
from reduced demand are discussed in section 9.2.

9.2 Impact on competitiveness of airlines and airports
The potential responses of passengers or airlines to the costs imposed by a blending obligation were
described in section 5.4.1:
•
•
•
•

Demand reduction
Mode switching
Tankering
Use of alternative routes

In addition to environmental impacts, these responses could have important economic impacts for
stakeholders in the aviation sector.
The extent to which these responses occur depends on the level of the cost impact, with higher costs
leading to greater impact. Moreover, the response of a passenger or freighting company to a fixed
increase in ticket price (demand elasticity) is affected by many factors, including: whether the trip is
for business or leisure; whether the trip is short-haul or long-haul; whether the elasticity is considered
at the level of the airline or the whole market; passenger income.123 Detailed economic modelling of
the industry-wide response to higher fuel costs is outside the scope of this study. In subsequent
sections the impact of these responses on competitiveness of each sector is discussed, and ways in
which these impacts could be mitigated are considered.

123 IATA (2008) Air Travel Demand, AITA Economics Briefing Number 9, Available from:

https://www.iata.org/whatwedo/documents/economics/air_travel_demand.pdf

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Renewable energy obligation for aviation in the Netherlands
Table 20 Possible consequences of a blending mandate for different stakeholders

Alternative
transport modes

Airports

Fuel suppliers

Demand
reduction

No impact

Loss of revenue Loss of revenue

Loss of revenue

Mode-switching

Gain in revenue

Loss of revenue Loss of revenue

Loss of revenue

Tankering

No impact

No impact

By avoiding the
obligation,
tankering
reduces cost for
airline

Use of
alternative
routes

No impact

Loss of revenue for
fuel suppliers
within the
obligated region.
Overall more fuel
has to be
purchased as more
fuel is burned when
tankering
Loss of revenue Loss of revenue for
unless slots can fuel suppliers
be filled by
within the
other flights
obligated region.

Airlines

Impact on
competitiveness
of different
airlines, as
variable ability to
fly alternative
routes.

9.2.1 Modes: competition between modes for passenger and freight transport
The introduction of a blending obligation, financed by the passenger or freighting company, would
increase the cost of flights and therefore cause some passengers/freight to take alternative modes of
transport. This would increase revenues to operators of overland transport in the NL.
CE Delft (2018) modelled the impacts of a flight tax on passenger demand. Their modelled scenario 3A,
with a flight tax which ranges from €7/passenger on a short-haul flight to €40/passenger for a longhaul flight most closely correlates with the cost increases anticipated from a 14% blending obligation
(Figure 15). Under scenario 3A passenger numbers in 2030 are lower than in the reference scenario by
between 1.6 million (under tight restrictions on overall airport capacity) and 1.9 million (where overall
airport capacity is assumed to be higher), which is a decrease of 1%-2% compared to the baseline
scenario. Of this decrease in passenger numbers, between 35% and 37% is due to passengers not
travelling at all, between 17% and 20% is due to passengers instead travelling overland, and between
43% and 47% is due to passengers travelling through foreign airports instead. This results in an increase
in passengers travelling by land of between 280,000 and 370,000 per year. Given that currently the
Dutch railways transports over 1.3M passengers per day, this is not a substantial increase in passenger
numbers.124

124 NL Times (2019) Dutch railway handles 1.3M passengers per day, Available from: https://nltimes.nl/2019/07/04/dutch-railway-handles-

13-million-travelers-per-working-day (Accessed on 5th november 2019)

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Renewable energy obligation for aviation in the Netherlands

9.2.2 Airlines: competition between airlines with a hub in the Netherlands and
those without
Whilst all airlines will suffer revenue loss from demand reduction or mode shifting, airlines with a hub
in the Netherlands have a reduced ability to tanker fuel, to compete with alternative routes, to spread
compliance costs across passengers who do not fly through NL, or to shift more efficienct aircraft to
routes through NL, which may place these airlines at a competitive disadvantage.
Two studies have assessed the decrease in passenger demand if costs were increased by a flight tax in
the Netherlands, which is analogous to an increase in costs from a SAF obligation. This decrease is a
combination of demand reduction, mode shifting and use of alternative routes.
•

•

CE Delft (2017) examine the impact of imposing a cost of 8€/passenger on a flight from
Amsterdam to elsewhere in Europe and 31€/passenger on an intercontinental flight on
passenger numbers compared to a reference scenario with no additional costs. This per person
charge is similar to that anticipated under a 14% blending obligation (Figure 15) and it
therefore provides an indication of the level of demand decrease that might be anticipated
under such a mandate. In the study, the cost is only imposed on O&D passengers, and is
anticipated to cause a decrease of O&D passenger demand of 7% for European destinations
and 4% for intercontinental destinations in 2030, compared with a scenario without this
passenger charge.
SEO (2018)125 considers two scenarios where the flight tax is limited only to O&D passengers,
and a third scenario where it is applied to both O&D and transfer passengers depending on
the maximum take-off weight of the aircraft. Where the tax is applied to both O&D and
transfer passengers, the total number of O&D passengers decreases by 2% whereas the total
number of transfer passengers decreases by 5% compared to a reference scenario without the
cost, showing that transfer passengers are much more sensitive to prices.

A further study (CE Delft, 2018) gives additional information on where demand is being shifted to:
•

•

Under CE Delft (2018) scenario 3A (described in 9.2.1) of the total decrease in passenger
numbers due to higher costs, between 35 % and 37% is due to passengers not travelling at all,
between 17% and 20% is due to passengers instead travelling overland, and between 43% and
47% is due to passengers instead travelling through foreign airports instead. It is anticipated
that the impact of passengers travelling through foreign airports instead of through NL would
disproportionately affect Dutch airlines.
Importantly it should also be noted that in CE Delft’s scenario 3A, freight and transfer
passengers are exempt from the tax. It is easier for transfer passengers to fly by alternative
routes than O&D passengers, as the location of the transfer airport is relatively unimportant.
Therefore a blending obligation which impacts both O&D and transfer passengers will likely
result both in a greater drop in passenger numbers (relative to a scenario with no additional
costs); and of this reduction in total passenger numbers a greater proportion will choose to
travel via alternative routes rather than mode-shifting. Hence the relative impact on airlines
headquartered in NL will be greater than that given by CE Delft (2018).

125 SEO (2018) Effecten van een nationale vliegbelasting, Available from: http://www.seo.nl/uploads/media/2018-

99_Effecten_van_een_nationale_vliegbelasting_in_2025.pdf

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Renewable energy obligation for aviation in the Netherlands
Based on the evidence reviewed, imposing higher costs on passengers as a result of a blending
obligation will result in a reduction of passenger numbers. This will have negative economic impacts
for all airlines operating through the NL. The impact on airlines with a hub in the NL will be
proportionately greater than for other airlines, because some passengers will choose alternative
routes not via the Netherlands, served by other airlines. Once the policy design has been narrowed
further, detailed economic analysis is recommended to assess the likely impact of remaining options
on airlines, and in particular the extent to which airlines with a hub in NL will be disadvantaged
compared to other airlines.

9.2.3 Airports: competition between Schiphol and other hubs
Under a blending obligation, Dutch airports could lose revenue in the case of demand reduction, mode
shifting, or flights being made via other airports.
In 2018 Schiphol airport reached the capacity ceiling of 500,000 flight movements.126 In addition the
opening of Lelystad Airport which was expected in 2019 has been delayed. Given the existing capacity
constraints on Schiphol airport, higher costs are not anticipated to impact the volume of traffic through
Schiphol in the short-term. However, demand growth over the medium term could be slower with a
blending obligation than in a scenario without a blending obligation. Estimates of the decrease in the
total number of passengers in the case of higher flight costs, compared to a reference scenario without
higher flight costs, are reviewed in section 9.2.2. In the case of flights being made via alternative routes,
this loss of revenue would come at the expense of increased revenue for airports outside of the
Netherlands.
In addition, the obligation may also impact Netherlands’ regional airports differently from Schiphol.
Previous modelling on the impacts of a passenger tax on the NL aviation sector127 concludes that across
all scenarios modelled the reduction in passenger demand at regional airports is significantly more
severe than the reduction in passenger demand at Schiphol due to the high percentage of low-cost
and non-business passengers at regional airports, who are more sensitive to price increases. In one
scenario for example, Schiphol experiences a decrease in O&D passengers of 4.8% whilst the number
of passengers at regional airports falls by 9%.128 On the other hand, regional airports do not carry any
transfer passengers, and it is known that transfer passengers are more price sensitive than O&D
passengers. Other previous work129 suggests that with a tax which applies to both O&D and transfer
passengers, Schiphol experiences a 2% drop in O&D passengers and a 5% drop in transfer passengers
(relative to a reference scenario), resulting in overall a 3% drop in passengers. Other Dutch airports
experience only a 2% drop in passengers relative to a reference scenario because they only carry O&D
passengers. Therefore it seems likely that under a blending obligation Schipol would experience a
greater economic impact relative to other airports in NL, but once the policy design has been finalised
full economic analysis would confirm this.

126 KLM (2018) Annual report, Available from: https://annualreports.klm.com/KLM_Annual_Report_2018.pdf
127 CE Delft (2017) Overheidsmaatregelen biokerosene, Available from: https://www.ce.nl/publicaties/1980/overheidsmaatregelen-

biokerosine
128
This fall is relative to a reference scenario without any policy measures so does not represent an absolute decrease in passenger
numbers but a slow-down in growth. Under the reference scenario the passenger numbers are anticipated to increase 2.7% annually, so
that a decrease of 5.4% vs. the reference scenario reflects the loss of 2 years’ growth.
129 SEO (2018) Effecten van een nationale vliegbelasting, Available from: http://www.seo.nl/uploads/media/201899_Effecten_van_een_nationale_vliegbelasting_in_2025.pdf

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9.3 Costs to government
9.3.1 Direct costs to government
The direct cost to government of an obligation scheme is the cost of administering the scheme. In 2018
there were 38 obligated suppliers under the HBE scheme. Under an aviation obligation, if this was
imposed on fuel suppliers there would be a smaller number of obligated parties (up to 10), and if it
was imposed on airlines there would be around 100 obligated parties (depending on the exact rules
and any exemptions allowed). Therefore the administrative burden for government would be lower
for an aviation obligation compared to the HBE system if fuel suppliers were obligated, and may be
slightly higher if airlines are obligated. It has been estimated that the cost of implementing the previous
air passenger tax in the Netherlands from 2008 to 2009 was less than €20090.5M130 (accounting for
inflation corresponds to around €0.6M today). Integration with the existing HBE scheme, and
administration by the same implementing organisation could further reduce costs from administrating
the aviation obligation.

9.3.2 Indirect costs to government
There may also be indirect costs from loss of tax income. Costs to government could also be incurred
indirectly through economic impacts on state owned parts of airlines and airports including Schiphol,
KLM and the Air-France KLM holding company131. If a policy is set up to partially cover the costs of a
blending obligation, or support particular routes, which is funded through general taxation (see section
5.4.12) then this would impose further costs on government. However other benefits, including from
SAF production in the NL, may offset these costs.
In a study analysing the impacts of a flight tax, Dutch GDP is found to increase under all 10 variants of
the flight tax which were investigated132. This is partly because part of the tax is paid by non-residents
and non-resident companies (which would also be the case if SAF costs were passed on to passengers),
and because spending in the Netherlands increases as some Dutch people choose not to travel and
instead spend money in NL. The impact on Dutch GDP also depends on how much of the SAF
production occurs in NL, and the impact on prices from freight cost increases.

130 CE Delft (2018) Economische-en Duurzaamheidseffecten Vliegbelasting, Available from:

https://www.ce.nl/publicaties/2132/economische-en-duurzaamheidseffecten-vliegbelasting
131 Council for the Environment and Infrastructure (2019) Aviation policy, a new approach path, Available from:
https://en.rli.nl/publications/2019/advice/aviation-policy
132 CE Delft (2018) Economische-en Duurzaamheidseffecten Vliegbelasting, Available from:
https://www.ce.nl/publicaties/2132/economische-en-duurzaamheidseffecten-vliegbelasting

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Renewable energy obligation for aviation in the Netherlands

10 SAF supply logistics
Summary
•
•

If an obligation were introduced, SAF would be blended with fossil jet fuel, and supplied to
airports through existing infrastructure, with minimal additional costs.
Barriers to this are expected to be overcome in the near term.

10.1 Introduction
A central strategy from the earliest stages of the development and deployment of sustainable aviation
fuels has been that the fuels have to comply completely with the existing quality and safety standards
that are used in the aviation sector. This requirement ensures that following the blending process of
sustainable aviation fuels with conventional Jet A1 fuel, the downstream processes and infrastructure
can in principle process such blends without further modifications in logistics and supply.
This approach was followed because:
•
•

•

Aircraft engines and fuel systems have a very long lifetime, and so combining with existing
specification is needed to enable ramp up in the near and medium term
Safety of operation is a core requirement in the aviation sector. Forcing sustainable aviation
fuels to perform equally to existing Jet A1-fuels and to follow all internally accepted standards
was necessary for them to be accepted by airlines.
The emphasis on the drop-in quality of sustainable aviation fuels means that no additional
infrastructural and logistical costs are added to the use of sustainable aviation fuels. This allows
sustainable aviation fuel producers to focus on the cost competitiveness of the fuels itself
rather than on the total fuel supply system.

10.2 Current and future supply logistics
Most sustainable aviation fuel supply is still based on batch operations. Until 2016, SAF was usually
distributed via trucks or rail to separate storage facilities from which aircraft were supplied. This is
because supply volumes were small and irregular. Since 2016, SAF distribution has been integrated to
a larger extent in existing jet fuel infrastructure and supply of SAF via the airport’s common hydrant
system used for fossil jet has been become standard practice, demonstrated in several airports
globally. No interviewees reported any issues related to safety or reliability of SAF delivery in these
operations.
All interviewees considered that in a future situation with obligatory SAF blending, SAF would be
supplied through existing jet fuel infrastructure, i.e. via pipelines and airport hydrant systems where
available. This would require SAF to be blended with jet at the production location or an intermediate
point such as on import, and from then it would be transported using existing pipelines to airports. At
smaller airports delivery may be by truck. Note that SAF cannot be blended at an airport, as unblended
SAF is not allowed in airport fuel systems.

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Renewable energy obligation for aviation in the Netherlands
Two current barriers to be overcome in achieving this cited by interviewees were:
•

•

The existing Rotterdam-Schiphol pipeline is the Central European Pipeline System (CEPS),
which is a NATO pipeline system, operated by the Defensie Pijpleiding Organisatie (DPO). This
pipeline system runs through 5 countries (NL, BE, LU, FR, DE, with the US also a member of the
system) and currently does not allow synthetic components in the system as it also serves
military airfields. All member countries unanimously need to approve synthetic components
in the system to allow for blended SAF at Jet-A1 specifications in the system. This is currently
not the case with, Germany being against this change. One interviewee estimated that
approval from Germany would be given by the end of 2020.
The fossil jet fuel produced from refineries varies over time in its specification. This variation
means that at some times it is only possible to blend SAF up to a lower percentage (e.g. 2030%) rather than the 50% to which it has been approved. This is a barrier to SAF producers and
blenders in economic terms, as it means they need to buy more fossil jet to blend. Several
interviewees considered that this issue would be overcome if an obligation were introduced
through cooperation between the fossil jet and SAF industries.

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11 Conclusions
Would the introduction of an annual renewable energy obligation for aviation be an effective way
to stimulate the production and consumption of sustainable aviation fuel (SAF), with a view to
achieving the objective of a minimum of 14% sustainable aviation fuel in the Netherlands by 2030?
•

•

•

An obligation for SAF in the Netherlands would be an effective way to stimulate consumption
of sustainable aviation fuels, and would be likely to result in use of 14% sustainable aviation
fuels in 2030. Obligations have been shown to be an effective way to deliver renewable fuel
use in the road transport sector in many European Member States, and interviewees from the
aviation industry confirmed that an obligation would drive uptake in the aviation sector.
Given that 14% of projected Dutch demand for aviation fuel is a relatively small volume in the
context of projected global renewable fuel supply and demand, it would be likely to be met
provided that the obligation resulted in a price comparable to that in other similar markets.
Nevertheless, a rapid increase in demand for SAF in other countries (for example through
mandates in countries with high aviation fuel demand) or for feedstocks and fuels from the
road transport sector (from all Member States as REDII is implemented) could lead to price
increases and shortage of supply.
An obligation would also be likely to support and stimulate production in the Netherlands,
although this would not be guaranteed by this type of policy. There are planned SAF projects
in the Netherlands today, with other players interested in siting plants, and airlines keen to
support local supply chains to supply aviation demand. In addition to an obligation, support
mechanisms could be used to support SAF plants in the Netherlands based on higher costs
routes that could broaden the sustainable feedstock base for SAF.

Would an obligation be an effective way to support future SAF routes?
•

•

Given the limited availability of waste and residue feedstocks for HEFA, and the much larger
global availability of feedstocks for advanced biofuels and renewable electricity for power to
liquids, successful commercialisation of these routes will be very important to enable
continued scale up for SAF use in the NL and globally. However, these pathways are estimated
to have higher production costs than oils-based SAF routes, and are at an earlier stage of
commercialisation today. As such, they are likely to supply very little of a 2030 obligation
unless supported further.
These fuels require either a sub-target within an obligation, or additional support via supply or
demand side policy, or preferably a combination of the two, as is common for road transport
biofuels. These fuels could also be incentivised through an obligation only for these fuels,
rather than as a sub-target within an obligation with a broader scope. A sub-target or
dedicated obligation has a higher risks of a shortage of supply, given that these routes are at
an early stage of commercialisation. As these plants will take several years to be planned and
built, with very few underway today, an obligation could start in the mid 2020s.

Would an obligation be an effective way to support near term SAF routes?
Any type of support for SAF in the near term will have benefits in terms of:
•

near term GHG savings

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•
•

further readying the supply chain for SAF use, such as putting appropriate chain of custody
systems in place across pipelines
sending a signal to the industry that SAF supply is required, which could drive investment in
production capacity, and action in feedstock sourcing

There are also risks related to near term support:
•

•

There have been concerns that supporting use of SAF would merely divert feedstocks and fuels
from use in the road transport sector, with increased processing emissions. However, diversion
from the road sector will lead to increased use of other renewable fuels to meet road sector
policy targets. Provided that sustainability requirements, including caps on food and feed
crops, are maintained in the road sector this should not lead to negative impacts.
There is widespread interest in use of waste oils and fats in aviation, and some concern over
limited resources for these feedstocks, leading to a risk of high prices and/or targets not being
met. This implies a need to design policy such that targets can be realistically met and the
sector does not become over-reliant on these feedstocks in the longer term, for example
through encouraging alternative options such as new sustainable feedstock types and
advanced biofuels

Assuming that the benefits are judged to outweigh the risks, options for supporting SAF in the near
term would be a blending obligation, or direct payment for SAF use.
A blending obligation would:
•

•

•

pass the costs of SAF use on to the airlines, and so on to passengers. This would have economic
impacts on airlines, together with potential for carbon leakage through tankering and
passengers taking alternative routes. However, it would mean that the costs were borne by
those causing the impacts, rather than by tax payers in the Netherlands, or road-fuel users (as
in the case of the opt-in).
encourage continuous competition, which would bring down prices from today’s high levels
as new entrants enter the market, albeit limited by prices available for similar fuels in the road
sector, and potentially counteracted by increasing feedstock costs in the future.
raise awareness in the whole aviation industry (airlines and fuel suppliers) of the need for
action, which could prompt those that have not been active to date to focus on their strategies
for decarbonisation, and potentially to invest in SAF supply chains. Optional support policies
are unlikely to create this level of interest, particularly amongst large players where renewable
feedstock/fuel supply would be a small share of their business.

Providing a direct payment for SAF use, for example through a scheme analogous to SDE++, would
have the benefit of being able to split costs between industry and government, and so reduce
economic impacts, but would not bring the same advantages in terms of competition and wider market
creation. Government would also need to consider carefully the public contribution made: to what
level this could be justified for technologies that are already commercialised, lack of public funding for
production of similar fuels for the road transport sector, and the high margins being made as a result
of low capacity. However if the direct payment were set too low, SAF would not compete with use of
the same feedstocks and conversion plants in the road transport sector.

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What are the preconditions for introduction of a blending obligation for aviation?
•

Successful introduction and operation of an obligation relies on balancing the demand, set by
the level and timing of the obligation, with the supply, set by the scope of the target,
sustainability requirements, and any additional support for the obligated fuels. Some of these
factors interact with other policy areas, such as targets for decarbonisation and renewable
fuels in other sectors. Decisions made on each one of these factors will affect the others,
meaning that their combined impacts will need to be assessed, and re-assessed if decisions
change. Key factors for which decisions are needed are described below.
Some interviewees considered that a potential barrier to the introduction of a blending
obligation is the currently limited SAF production capacity. However, as long as this capacity,
and a realistic pathway for this to increase, is taken into account in the policy design this should
not present a barrier to the success of a blending mandate.
The extent to which biofuels based on food and feed crops could contribute towards SAF
supply is a key consideration for policy, with widely differing views amongst stakeholders. This
will need to be agreed in conjunction with Netherlands policymaking on biofuels in other
sectors. Excluding food and feed crop-based fuels would reduce supply options, lead to risks
related to limited waste oils supply, and may provoke challenge from some airlines. Including
these fuels would increase the risk of impacts on food and feed markets, conflict with
sustainability requirements of some airlines, and require careful alignment with biofuel
policymaking in other sectors. Further assessment is needed of the potential for, and impacts
of crops with low land use impacts.
The economic impacts of obligating SAF blending could lead to competitive distortion between
airlines, in particular on those with a hub in the Netherlands. The only ways to reduce these
distortions are a) to develop a policy with a wider geographic scope, through pushing for
European level policy or a stronger driver for SAF within CORSIA, b) reduce the level of the
obligation, which would also reduce the climate benefits or c) reduce the costs to passengers,
for example through subsidising the additional costs of SAF blending from general taxation
(only possible for non-food and feed crop based SAF). The Dutch government will need to
decide what level of economic impact is acceptable in order to achieve the policy goal of GHG
reduction.

•

•

•

Key areas for agreement if an obligation is to be introduced
•
•
•
•
•
•
•
•

Extent to which biofuels based on food and feed crops should contribute towards SAF supply
and treatment of fuels from low ILUC crops
Extent to which waste oils feedstocks should contribute towards SAF supply
Form and level of support for advanced biofuels and power to liquids
Degree of economic impact on airlines
Level and timing of targets
Compliance mechanism
Chain of custody in pipelines across multiple countries
Approach to encouraging an EU-wide policy in parallel with introduction of an obligation in
the Netherlands

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What are the risks of introducing this type of obligation?
•

•

•

•

Policymaking for SAF is at a relatively early stage globally, with ongoing debate over the
interaction between CORSIA, the EUETS, Member State level policies and the potential for EU
policy. Whilst no barriers to an obligation appear to exist, there is a small remaining risk of
potential challenge to an obligation in the Netherlands depending on the approach taken.
The sustainability risks around an obligation will depend on the feedstocks allowed under the
obligation. Waste oils provide a near term sustainable route to SAF, though their limited
potential leads to concerns about price rises and supply volumes particularly if demand
increase in other markets. Food and feed crop-based biofuels will be used to supply SAF unless
this is specifically excluded in the policy, as whilst some airlines have policies to avoid these
feedstocks, others will use the cheapest fuels available. Advanced biofuels from lignocellulosic
feedstocks and liquid fuel from renewable electricity are widely seen as having lower
sustainability risks and much higher sustainable resource potential.
Expected prices for SAF are high: around 4-5 times the prices of fossil jet. This is a result of
both high production costs of SAF (2-3 times jet at the low end, up to 8 times for routes in
development) and very low levels of global supply today. These prices are not expected to
decrease to 2030: whilst the prices of today’s oil-derived routes may come down with new
players entering the market, pressure on feedstocks is likely to increase. Production costs of
some advanced routes will come down, meaning they can enter the market, but not to the
extent that they would bring prices down. The resulting additional fuel cost will lead to
economic impacts on airlines, which may need to be managed through policy design (as
above). It would also be possible to limit the potential costs through setting a buy-out price for
the policy, which would limit costs at the expense of achieving some GHG savings.
The additional costs of SAF blending could also lead to carbon leakage: increased emissions as
a result of airlines tankering (carrying more fuel than is needed to avoid uplifting fuel in the
Netherlands) or from passengers using alternative (potentially longer) routes on which SAF is
not used. This could be mitigated through the same approaches as for the economic impacts
above, in particular through EU or stronger global policy.

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All of the technology routes considered in this study can produce a number of different fuel types. In
this study two cases are considered: where the percentage of jet output is maximised, and where the
percentage of other fuels is maximised. The percentage of jet fuel (as a percentage of total fuel output
from the plant) in each of these two scenarios is shown in Table 21.
Table 21 High and low jet fuel slate

Route

Jet % when pathway
optimised to produce jet

Jet % when pathway optimised
to produce other fuels

Hydroprocessing of oils/fats

70%

14%

Gasification with Fischer-Tropsch

50%

6%

Pyrolysis with catalytic upgrading

60%

20%

Alcohol catalysis (AtJ)

90%

25%

Aerobic fermentation (DSHC)

100%

0%

APR with catalytic upgrading

60%

20%

HTL with catalytic upgrading

60%

20%

PtL with FT catalysis

50%

20%

104