Europe is heading toward a structural shortage of electro-sustainable aviation fuel just as regulatory demand begins to accelerate, according to a new SAS Aviation Insights report.
The report, titled The Need for e-SAF in Scandinavia, warns that Europe risks a sustainable fuel shock if production capacity fails to keep pace with the EU’s ReFuelEU Aviation regulation.
With no European e-SAF production facility yet reaching final investment decision, SAS says the gap between mandated demand and available supply could drive up airfares, force route reductions and deepen Europe’s exposure to future fuel shocks.
Mads Brandstrup Nielsen, Senior Vice President Communication, Public Affairs and Sustainability at SAS, said the current global fuel environment is a reminder of how exposed Europe remains to external shocks. He warned that without domestic e-SAF production, Europe risks creating a new vulnerability inside a regulated system where demand is mandated but supply is not.
According to the report, Scandinavian aviation alone will require 36,000 tonnes of e-SAF in 2030. Demand is expected to rise to more than 160,000 tonnes by 2035 and 330,000 tonnes by 2040.
This would require the output of one dedicated production plant by 2032, two to three plants by 2035 and around five plants by 2040. Today, none exist in Europe.
In a structurally short market, e-SAF prices are expected to move toward the cost of non-compliance under EU rules, a level several times higher than today’s fossil-based jet fuel. This could significantly increase airline operating costs and put pressure on European connectivity.
The report outlines two possible paths. Europe can either scale back ambition under ReFuelEU, slowing aviation’s net-zero transition, or accelerate production through targeted policy support, investment incentives and infrastructure development.
Brandstrup Nielsen said Europe has a narrow window to decide whether it wants to lead or follow in the next phase of clean aviation. He added that building e-SAF capacity is not only about meeting regulatory requirements, but also about protecting connectivity, securing energy stability and keeping European industry competitive.
Without urgent action, SAS concludes, Europe risks locking itself into a long-term imbalance in sustainable aviation fuel production, leaving aviation exposed to regulatory, market and energy shocks.
