Germany
Germany is the largest aviation market in Europe, a central hub for European aviation research (e.g., DLR), and a key location for aircraft manufacturing. These position Germany perfectly to offer technological support for the development of the sustainable aviation fuel (SAF) industry.
The market opportunity for SAF in Germany is strengthened by robust public-private collaborations and significant investments in SAF production technologies. Companies like Neste, Sunfire, and UPM are leading initiatives, including the establishment of commercial-scale PtL facilities and biorefineries. These efforts make the outlook very positive, with projections of 1.5 million tons of SAF production by 2030, despite challenges such as increased flying taxes and potential funding cuts that may hinder growth and competitiveness in the sector.
GDP (Current Prices) USD (2023) | 4,457 Bn |
Real GDP Growth Forecast (2024-2028) | 0.97% |
10-year Govt Bond Yield (12-month rolling average) | 2.43 |
Country Credit Rating | AAA |
Average Daily Flights | 4,532 |
Existing Fuel Consumption | 10.66 million metric tons |
Usage Mandate | 0.5% SAF by 2026, rising to 1% in 2028 and 2% in 2030 |
Projected SAF Capacity Under Development (MT/Year) | 498,508 by 2030 |
Policy Support |
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Source: IMF, Fred Economic Data, S&P Global, Knoema, EurocontrolI
Aviation Industry Backdrop
Germany’s aviation industry has experienced significant growth since the mid-1990s, with revenues surpassing €40 billion in 2023, making it one of the country’s most innovative and best-performing sectors (Statista, 2023). In 2023, total aircraft movements across major German airports exceeded 2 million, a 5% increase from the previous year, while passenger numbers reached 194 million, a 19% growth compared to 2022 (Munich Airport, 2023).
Despite the steady post-pandemic recovery in air traffic, Germany’s jet fuel consumption has not yet returned to its 2019 pre-pandemic level of 221,100 barrels per day (bpd). However, anticipating a gradual increase in jet fuel consumption, the German government agreed with the aviation industry and regional authorities on a roadmap for the development and use of “green” aviation fuel (Reuters, 2021) to be on track with its overall decarbonization goals. The country aims to reduce CO2 emissions by 42% across the entire transport sector by 2030 and decrease in-flight emissions of soot particles from aircraft engines using PtL kerosene by 50-70% (Evalueserve, n.d.).
|
Year |
U SAF Blending Quotas |
Aireg SAF Utilization Targets (Germany) |
EU PtL Blending Quotas |
Aireg PtL Utilization Targets (Germany) |
|---|---|---|---|---|
| 2025 | 2% | 2% | 0.5% (Only Germany 2026) | 0.5% |
| 2030 | 6% | 10% | 1.2% | 3% |
| 2035 | 20% | 30% | 5% | 20% |
| 2050 | 70% | 100% | 35% | 50% |
Source: (aireg – Aviation Initiative for Renewable Energy in Germany e.V., 2024)
In this regard, a notable private sector initiative is the aireg – “Aviation Initiative for Renewable Energy in Germany e.V.” ,established in Berlin in 2011 by air carriers, airports, research institutions, and other partners. This non-profit organization promotes the availability and use of renewable energies in aviation to help the industry achieve its ambitious CO₂ reduction targets (The Emirates Group, 2024). Aireg has set specific 2030 goals, including operating at least one commercial SAF production plant in Germany and constructing and operating a PtL research and demonstration platform. (LinkedIn, 2024)
Source: OECD.Stat, 2024
Source: OECD.Stat, 2024
Note: Thousand tonnes of CO2-equivalent
Policy Regulation
Germany’s advanced SAF policies and regulations are closely aligned with broader EU initiatives like ReFuelEU, demonstrating the country’s commitment to sustainable aviation.
The German National Strategy, part of the country’s target to achieve GHG neutrality by 2045, includes a 2% PtL quota for aviation fuel suppliers by 2030. In May 2021, the German government and industry representatives agreed on a “PtL roadmap” involving a €1 billion investment to establish PtL production in Germany, optimize technology, define sustainability criteria, and establish binding targets for renewable kerosene purchase and sale. The German Aerospace Centre (DLR) would lead concept development with industry and scientific partners, aiming to produce at least 200,000 metric tons of sustainable kerosene annually for German air traffic by 2030, potentially reducing emissions from one-third of all domestic flights.
In addition to government support, financial assistance is also available from the EU in terms of funding support for SAF projects through Horizon Europe and the European Green Deal. These funds are aimed at research, development, and scaling up production capacities.
These proactive policies and strategic investments highlight Germany’s role as a key player in the global transition to sustainable aviation, reinforcing its leadership in the shift towards greener skies.
Market Opportunity
Germany’s SAF market presents significant opportunities driven by strong government support, ambitious policy targets, a robust investment and funding ecosystem, and particular strengths in Power-to-Liquid (PtL) technologies. Several initiatives are underway to establish commercial-scale PtL facilities for SAF production. In June 2024, a working group of government and industry leaders urged political and industry commitments to support SAF market expansion. In its pursuit of a fossil-free aviation industry, Germany has also explored the potential of synthetic jet fuel produced from green hydrogen and sustainable CO2, as part of an initiative led by the German Energy Agency (Clean Energy Wire CLEW, 2024).
The aviation sector further benefits from strong collaborations between public and private sectors and partnerships among fuel producers, airlines, and technology providers, with several notable initiatives underway:
Notable Company/Industry Initiatives
- Sunfire’s Strategic Plans: Sunfire, a German cleantech company, is developing a PtL technology that converts renewable electricity and CO2 into synthetic crude oil, which can be refined into SAF. The company is collaborating with Lufthansa and other partners to establish a commercial-scale PtL facility in Germany.
- UPM’s Biofore Platform: UPM, a Finnish company with a strong presence in Germany, is investing in a biorefinery project in Leuna, Germany. The facility will produce a range of renewable fuels, including SAF, utilizing sustainable feedstocks such as wood- based biomass and residues.
- Airline Initiatives: German airlines, such as Lufthansa and Condor, are actively participating in SAF projects, forming alliances with fuel producers to secure SAF supplies and reduce their carbon footprint. These collaborations often include long-term purchase agreements and joint research efforts to optimize SAF use in commercial flights. By integrating SAF into operations, these airlines are helping to create a market demand for sustainable fuels, encouraging further innovation and investment in this area.
- Along these lines, in a separate development, Lufthansa Group and HCS Group signed a Letter of Intent regarding the production and supply of SAF in Germany, compliant with Europe’s Renewable Energy Directive RED II (Lufthansa Group, 2023). Lufthansa aims to halve net carbon emissions by 2030 from 2019 levels through reduction and offsetting measures, striving for carbon neutrality by 2050 (Lufthansa Group, n.d.).
International collaborations: In June 2024, Emirates joined aireg, underscoring its commitment to improving the sustainability of its operations and supporting the development of SAF. This pledge involves the airline contributing to efforts to boost locally produced SAF in Germany, aiding the country’s ambition to become a hub for SAF production (aireg, 2024). Earlier, in November 2023, Boeing also joined aireg, highlighting the company’s commitment to advancing sustainable aviation fuel (aireg, 2023). In September 2023, German logistics giant DHL signed an agreement with energy firm HH2E and South African petrochemicals firm Sasol to build a joint production facility for SAF in Eastern Germany. The facility will use green hydrogen to produce SAF and is expected to produce at least 200,000 tonnes per year, with the potential to scale up to 500,000 tonnes per year (ESG News, 2023).
SAF Supply & Infrastructure: In July 2024, Mönchengladbach Airport (EDLN) in Germany became the country’s pioneer in providing uninterrupted access to SAF. While other German airports have previously offered renewable fuel, EDLN near Düsseldorf has established a partnership with TotalEnergies, ensuring consistent deliveries of blended SAF on a regular basis (AIN Media Group, 2024). as research and demonstration facilities (CENA Hessen, 2023).
Despite a positive outlook, recent tax hikes might hinder SAF growth in Germany. On 1 May 2024, German flying taxes increased by 19% to €15.53-70.83 per passenger, depending on the route, reducing the country’s competitiveness and affecting its air transport recovery (IATA Airlines magazine, 2024). The government may also cut over €2 billion in SAF research and infrastructure funding (Informa Markets, 2024). These recent initiatives could be detrimental to the decarbonization of the German aviation sector and the broader Net-Zero goal.
Outlook
Overall, Germany’s sustainable aviation market is set to expand significantly over the next decade, driven by clear policy directives, substantial investment, and a robust commitment to research and innovation. Germany’s approach not only supports its domestic aviation needs but also strengthens its potential as an exporter of SAF technologies and solutions, solidifying its leadership in the international market.
The CENA SAF Outlook 2024-2030 forecasts nearly 30 million tonnes of global SAF production by 2030, with Germany contributing about 1.5 million tonnes. According to the same projection, Germany’s PtL kerosene demand is projected to reach 50,000 tonnes in 2026, 100,000 tonnes in 2028, and 200,000 tonnes in 2030 (CENA Hessen, 2023). Among the 144 global SAF projects, 20 are located in Germany, with 18 being PtL projects. Most are still in planning or conceptual stages, with six plants under construction or operating