Navigating the Shift to Synthetic Sustainable Aviation Fuel: Lessons from Spain's Coalition and the Iran Crisis

Overview

The global aviation industry faces a dual challenge: reducing carbon emissions while securing fuel supplies against geopolitical shocks. Recent events—such as the Iran crisis—have exposed the fragility of relying on fossil fuels, driving a European push for synthetic sustainable aviation fuel (SAF). In Spain, a coalition of 21 companies, trade associations, and industry bodies has urged the government to back political commitments with economic ones ahead of the June EU Transport Council. This guide explains how stakeholders can replicate Spain's approach, understand the cost implications (including a geopolitical oil premium of up to €88 per long-haul flight—29 times the cost of ReFuelEU compliance), and build momentum for SAF adoption.

Prerequisites

Understanding Key Concepts

• Synthetic sustainable aviation fuel (SAF): A drop-in fuel made from renewable sources (e.g., captured CO₂, green hydrogen) using power-to-liquid processes. It reduces lifecycle emissions by up to 80%.
• ReFuelEU: European Union regulation mandating increasing SAF blending mandates (e.g., 2% by 2025, 70% by 2050). Compliance costs are relatively low compared to fossil alternatives.
• Geopolitical oil premium: The extra cost per passenger due to volatile oil markets; in this case, up to €88 per long-haul flight, driven by the Iran crisis and other supply risks.

Who Should Use This Guide

This guide is for policymakers, industry advocates, airline executives, fuel producers, and environmental NGOs seeking actionable steps to accelerate SAF deployment. Familiarity with aviation regulations and energy markets is helpful but not mandatory.

Step-by-Step Instructions

1. Analyze the Fossil Fuel Vulnerability Exposed by Geopolitical Crises

Start by quantifying the risk. During the Iran crisis, global oil prices surged, directly increasing airline operating costs. For a typical long-haul flight (e.g., Madrid–New York), the geopolitical oil premium adds €88 per passenger—29 times more than what ReFuelEU compliance would cost per passenger for a similar flight. Use this data to build a business case:

• Calculate current fuel cost volatility using spot crude prices and airline fuel surcharges.
• Compare the per-passenger impact of fossil fuel reliance vs. SAF blending mandates.
• Present the findings to decision-makers, emphasizing that SAF hedges against geopolitical risk.

Learn more about calculating the premium below.

2. Understand the ReFuelEU Compliance Cost Baseline

ReFuelEU requires airlines to blend increasing percentages of SAF. The compliance cost per passenger is relatively low—around €3 per long-haul flight in 2025, scaling up over time. Use the formula:

Compliance cost per passenger = (Total fuel volume × SAF blend % × (SAF price – Jet A1 price)) / Number of passengers

Assuming a SAF price of €2.50/L vs. Jet A1 at €1.00/L, with a 2% blend and 300 passengers on a 100,000 L flight:
100,000 × 0.02 × (2.50 – 1.00) / 300 = 100,000 × 0.02 × 1.50 / 300 = €10 per passenger. This is far below the €88 geopolitical premium.

3. Form a Broad Coalition of Stakeholders

Spain's success stems from uniting 21 diverse organizations—including airlines, fuel producers, trade associations, and industry bodies. Steps:

• Identify key players: flag carriers (e.g., Iberia), technology providers, renewable energy firms, and NGOs.
• Develop a shared white paper or position statement highlighting the economic and environmental rationale.
• Assign a coordinator (e.g., a trade body like Acierta) to manage communications and lobbying.
• Hold regular meetings to align on asks (e.g., tax incentives, innovation funds, mandates).

4. Engage Government and the EU Transport Council

With a coalition in place, target the June EU Transport Council. Prepare an advocacy toolkit:

• Briefing documents with cost-comparison charts (€88 premium vs. €10 compliance).
• Case studies from other European countries that have committed financial support (e.g., France, Germany).
• Economic impact analysis showing job creation from SAF production.
• Request a meeting with Spain's Ministry of Transport and the Council's working groups.

5. Advocate for Economic Commitment—Not Just Political Rhetoric

The coalition urges Madrid to back political announcements with concrete economic measures. Propose:

• Direct subsidies for SAF production facilities (similar to green hydrogen funding).
• Tax credits for airlines that blend above mandates.
• Innovation grants for synthetic fuel R&D.
• Public-private partnerships to de-risk first-of-a-kind plants.

Common Mistakes

Mistake 1: Ignoring Geopolitical Risk in Financial Models

Many airlines assume stable oil prices; the Iran crisis shows this is flawed. Always include a sensitivity analysis for oil shocks when comparing SAF vs. fossil costs.

Mistake 2: Overestimating SAF Production Scale

Spain's coalition must be realistic: global SAF supply today is under 0.1% of jet fuel demand. Near-term goals should focus on feasible blending mandates (e.g., 2–5%) while scaling production.

Mistake 3: Focusing Only on Airlines

Successful advocacy involves airports, fuel suppliers, and environmental groups. A narrow coalition misses synergies—e.g., airports can provide infrastructure support.

Mistake 4: Underestimating the Cost of Inaction

The €88 per passenger premium is a conservative estimate. During extreme crises, airlines may face ticket price caps or demand collapse. SAF acts as an insurance policy.

Summary

Synthetic sustainable aviation fuel offers a dual benefit: reducing emissions and insulating airlines from geopolitical oil price shocks. Spain's coalition of 21 organizations provides a replicable template—combine data-driven cost comparisons (e.g., €88 vs. €10 per passenger), build broad stakeholder coalitions, and lobby for economic commitments before key EU policy deadlines. By avoiding common pitfalls, European states can accelerate SAF adoption and reduce fossil fuel vulnerability.