Last 16 May, the EU Renewable and Low-Carbon Fuels Alliance Conference was held in collaboration with RLCF Alliance (Renewable and Low-carbon Fuels Value Chain Industrial Alliance), and promoted by the European Commission DG MOVE, to encourage the transition to fuels with a lower environmental impact in the aviation and maritime transport sector.

• The focus of the discussion was on European and national initiatives and policies for energy transition and decarbonisation in these sectors, currently available technologies in the field of green fuels, and financial solutions to support the renewal processes.
• Speakers emphasized the necessity of active collaboration between the public and private sectors to finance the significant investments required to achieve net-zero emissions by 2050.

This initiative confirms Intesa Sanpaolo’s commitment to supporting the energy transition, as detailed in the 2022-2025 Business Plan presented by CEO Carlo Messina. From 2021 to 2024, disbursements exceeded €47 billion, with 90% of the Group’s purchases coming from renewable sources.

Eddy Liegeois, Acting Director for Investment, Innovative & Sustainable Transport at European Commission, mentioned that the Commission has seven ongoing projects focused on technology development in the aviation and maritime sectors. He highlighted the importance of support schemes such as State Aid, the General Block Exemption Regulations and the Guidelines for Climate and Environmental Protection and Energy, enabling a framework for Member States to facilitate faster projects, approvals and foster a supportive environment for technology and sustainability.

Eric Dalbies, EVP, Strategy and CEO technology Officer of Safran, argued for the necessity of preparing the next generation of aircraft by 2035, emphasizing that technology will play a crucial role in reducing fuel burn and increasing efficiency. Dalbies explained that innovative engine concepts, such as ‘open funds’, and hydro-electric systems in engines, can significantly enhance fuel efficiency. Additionally, lighter equipment through innovative materials and processes can further contribute to sustainability. He emphasized that reliance on SAF is also critical, as it involves collaboration of other sectors, particularly fuel suppliers.

Antoine Laborde, Director Fuel Procurement Air France KLM, pointed that Refuel EU mandates require fuel suppliers to produce Sustainable Aviation Fuels (SAF) to meet legal requirements. He expressed concerns about whether ongoing SAF projects within the EU will reach completion, as SAF is needed to meet the mandates, and not all projects have passed EIB evaluation.

Juan Antonio Magaña Campos, Deputy Head of the Innovation Finance Advisory Division, European Investment Bank (EIB), stated the while EIB is looking to collaborate further with associations. Current funds are primarily directed to the maritime sector or to boost hydrogen or e-fuels production. However, these efforts in the aviation sector, are mostly focused on airports and fuel suppliers rather than aircraft operators.

Nicola Sandri, Senior Partner, Head of Infrastructure McKinsey, presented the book-and-claim mechanism as the key proposal to allow market to become more liquid and reduce physical transportation. By reducing physical movement and just exchanging certificates, overall costs can be reduced by 30%. Operating at a global level with a robust certification system, the book-and-claim proposal provides a framework for sustainability in different markets. According to Sandri, the issue of importing from other countries and regions will be addressed by the Carbon Border Adjustment Mechanism (CBAM), which will be in force by 2026, imposing a carbon price on high-energy industries like steel, chemicals, and aluminium. However, it is not yet clear how certification will be guaranteed.

In conclusion, there is a need for clearer guidance from the Commission on how to proceed with aviation incentives, highlighting the importance of providing incentives for aircraft operators when implementing EU mandates to reduce airlines costs and prevent SAF shortages. One of the instruments mentioned by the Commission was the EU Hydrogen Bank, which funds seven projects through the EU ETS system aimed at producing 1.6 million tonnes of renewable hydrogen to promote sustainability in aviation and maritime sectors. Despite these efforts, SAF remains the current priority in the short to medium term due to its maturity and accessibility compared to hydrogen, which poses significant transportation challenges. Furthermore, it is crucial to advocate for technology incentives, as green and digital solutions must go together to ensure sustainable aviation and it remains uncertain whether these projects will adequately address the issue of reducing airlines costs.