Under ReFuelEU Aviation, Europe is legally requiring fuel distributors (and airlines by proxy) to purchase Sustainable Aviation Fuel (SAF) and Synthetic Aviation Fuel (e-SAF) made with renewable energy

** Key SAF Mandates You Need to Know as a SAF Start-Up**

  • 2030: 6% SAF of total aviation market, with at least 1.2% e‑SAF (synthetic fuels)
  • 2035-2050: Going up every 5 years up to 35% e‑SAF.

CHILI recommendation: Forget about the 2050 TAM – you should plan for an exit by 2035 if you have traction.

** Supply Gap Alert: Europe’s e‑SAF Shortfall will lead to $ Billions of penalties**

  • With existing projects (mostly bio‑SAF), capacity could reach 3.5 Mt/year by 2030 — still nearly all HEFA, with no e‑SAF in that mix
  • Europe has announced capacity for ~2.8 Mt/year of large-scale e-SAF projects, but none have reached Final Investment Decision (FID) yet — making actual delivery uncertain, with many of these projects not expected to materialize, leading to an expected 45% shortfall
Here is the Penalty kicker that will drive sales:
  • Even with announced plans, Europe will not meet its 2030 e-SAF target.
  • Penalties are set at 2x the difference between the market prices of e-SAF and Aviation Fuel.
  • In this supply squeeze, any credible contract will be executed, creating an opening for American start-ups that can deliver.
Why the U.S. Can Step In — and Lead
  1. Proven U.S. Momentum
  • U.S. startups like Infinium secured the first FID for a large-scale e‑SAF project (Project Roadrunner in Texas, ~23,000 t/year), set to start in 2027.
  • U.S. firms also hold the largest e‑SAF offtake agreements globally, including deals with European airlines.
  1. Geographic & Infrastructure Advantage
  • U.S. Gulf Coast and Texas have existing fuel logistics and export infrastructure ideally suited for SAF supply chains.
  • U.S. producers can leverage lower-cost renewable energy, midstream access, and export-friendly ports to deliver SAF to Europe efficiently.
  1. World Class Programs like the Carbon & Hydrogen Innovation and Learning Incubator (CHILI)
  • The USA supports some of the best global incubators like the CHILI, providing a structured industry-focused curriculum virtually across the world.
  • The USGC and programs like CHILI bring together an ecosystem of entrepreneurs, technology experts, and corporate partners.
  • For those interested, they can apply here: https://texasinnovates.org/chili-application/
But here’s the catch:
  • 45Z Clean Fuel Production Credits – Lowered to a maximum of $1/gallon and expire for fuel sold after December 31, 2029. To qualify, projects must be operational and producing eligible fuel by then. Developers should expedite plans, as production after this date will not earn credit.
  • 45V Clean Hydrogen Production Credit – Up to $3/kg for clean hydrogen but eligibility now requires project construction to begin before December 31, 2027. The credit runs for ten years after project completion, but with lead times, major investment must commence by 2026–2027 to capture full value.
  • Accelerated Solar Tax Credit Phaseout – Commercial solar projects must start construction by July 4, 2026 to secure full ITC/PTC. Otherwise, only projects placed in service by December 31, 2027, are eligible for any federal incentive.

After that? The economics get shaky, and the U.S. loses a significant cost advantage as costs may rise from a lower estimate of $4.55/gallon with subsidies to close to $12/gallon. As a startup, you will need to find a regional ecosystem and partners to radically reduce your costs and prove your technology.