In this article we shed light on the impact of the mandate on SAF producers, fuel suppliers, airlines and airports and provide an outlook on the expected revision of the Regulation to introduce a so-called ‘book and claim’ system.

Key take aways:

• The physical supply-side mandate poses logistical and commercial challenges for fuel suppliers. Whilst the flexibility mechanism under the Regulation intends to mitigate potential concerns, it is yet unclear how this mechanism can and will be used.
• Airlines are often confronted with fuel suppliers having strong , if not dominant, local market positions. The mandate further increases the leverage for fuel suppliers given the mandatory physical offtake of a scarce product and the anti-tankering requirements. A book and claim system would allow airlines to counterbalance this leverage but has its own challenges.
• Airports were given a rather neutral role in the scaling-up of the SAF update, focusing on logistical facilitation. This ignores the fact that airports are already pursuing their own strategies in incentivizing or even mandating SAF uptake.