€2.1 billion for eSAF next door: three ways Switzerland could join the auction

On 28 September 2026, Germany, Austria and Luxembourg announced a joint funding programme for eSAF – synthetic aviation fuel made from renewable hydrogen and recycled CO₂. Germany will contribute up to €2 billion, Austria and Luxembourg up to €60 million each. The money will flow through a double-sided auction, with the first round expected in 2027 once the European Commission has approved the state aid. Switzerland, which shares a border, an airspace and a SAF blending mandate with all three, is not part of it.

That is worth a closer look – not because €2.1 billion is a large number, but because the instrument addresses the one problem that every eSAF project in Europe currently shares.

Fifty projects, zero investment decisions

The EASA ReFuelEU Aviation Annual Technical Report 2026, presented to the European Parliament’s Transport Committee at the end of September, puts the state of play in two figures. Sustainable aviation fuel reached almost 2.8 per cent of fuel supplied at EU airports in 2025, comfortably above the 2 per cent mandate. And around 50 eSAF projects are in the pipeline – none of which has reached a final investment decision.

The two figures belong together. Today’s SAF is almost entirely biogenic: roughly 80 per cent of volumes came from used cooking oil, and 85 per cent of the feedstock was imported, much of it from China. The eSAF that ReFuelEU Aviation requires from 2030 – 1.2 per cent of supply, rising to 35 per cent by 2050 – does not exist yet, and the plants that would make it cannot be financed on the strength of a mandate alone. Banks lend against contracts, not against regulations. What is missing is a creditworthy buyer willing to commit to a price and a volume for ten years or more.

How a double-sided auction works

The model is borrowed from H2Global, the German mechanism for importing renewable hydrogen derivatives. A publicly funded intermediary runs two auctions. On the supply side, it signs long-term purchase contracts with the eSAF producers who offer the lowest price. On the demand side, it sells the fuel in short-term auctions to the airlines who bid the most. The gap between the long-term purchase price and the short-term sale price is covered by the public budget.

For a producer, the long-term contract with a state-backed buyer is precisely the bankable offtake that turns a project into a plant. For airlines, the short-term sales mean they can buy eSAF as their mandate grows without locking in a price a decade ahead. For the taxpayer, competition on both sides keeps the subsidy per tonne as low as the market allows. It is, in other words, the demand instrument that mandates alone cannot provide.

Switzerland has the mandate, not the instrument

Switzerland adopted the same SAF blending quotas as the EU and has a funding channel for innovative aviation fuels through its aviation special financing. What it does not have is a mechanism that gives an eSAF producer a bankable contract. The Federal Council’s report on synthetic energy carriers of 2 September 2026 names aviation as one of the sectors where Power-to-X is indispensable, acknowledges that a large share of demand will be imported, and then declines to propose any instrument. The auction next door shows what one could look like.

Three options for Switzerland

• Join the auction. Austria is taking part with €60 million. A Swiss contribution of a similar order, financed from the aviation special financing, would give Swiss producers access to the supply-side contracts and Swiss airlines access to the demand-side sales. It would require an agreement with the German intermediary and a state-aid-compatible structure, but the template exists. Politically, it would make Switzerland a member of the eSAF early movers rather than a bystander.
• Build a Swiss instrument. A smaller double-sided auction run from Switzerland could be tailored to domestic production. The drawback is scale: a market the size of Switzerland on its own may struggle to generate volumes large enough to make a plant bankable. This option works best in combination with the first, as a national top-up rather than a stand-alone scheme.
• Recognise the auction’s fuel. The minimum step costs the Confederation nothing: allow eSAF procured through the German auction to count towards the Swiss blending mandate, and let Swiss airlines bid on the demand side. That removes a barrier without adding a budget line.

A condition and a reminder

One condition remains non-negotiable from a Power-to-X perspective: eSAF only makes climate sense when the carbon it contains is recycled CO₂ from biogenic, atmospheric or industrial sources, and when that recycling displaces fossil carbon instead of providing a reason to burn more of it. An auction that specifies eligible carbon sources in line with the EU’s RFNBO rules meets that test.

The reminder is about timing. The Commission has signalled that the ReFuelEU Aviation review, expected in the second half of 2027, will not lower the mandates. The 2030 eSAF sub-target stands. Plants take four to five years to build. An auction that awards contracts in 2027 is already late for 2030; a country that has not yet decided whether to take part is later still. SPIN will put the question to its political advisory board and to the Federal Office of Civil Aviation. The answer should not take long.

Sources: German Federal Ministry of Transport, press release on the eSAF funding scheme; EASA, ReFuelEU Aviation Annual Technical Report 2026; European Parliament TRAN Committee, exchange of views with the Commission, 28 September 2026; Swiss Federal Council, report on synthetic energy carriers and seasonal energy storage, 2 September 2026.

🤖 AI transparency: This text and its visual were created using AI, reviewed and approved by a human.