With strict targets looming, European aviation races to make green fuel

Energy giant Repsol has bought into Europe's drive for green jet fuel, but believes the E200m plant it is building in southeast Spain faces a bumpier ride than if it was on the other side of the Atlantic. Repsol says the plant, which transforms used cooking oil into so-called sustainable aviation fuel (SAF), has attracted plenty of customers. But it is concerned Europe's investment environment will complicate the industry's efforts to take off. "(In Europe) there is a legal instability and a regulatory machinery that is very complex and very discouraging towards seeking new solutions," said Oliver Fernandez, Repsol's director for air fuel in Madrid. "We see the U.S. is very in favour of helping companies with financing and focusing on helping them to develop new things." Repsol's worries echo those of Europe's aviation sector, much of which is tasked with boosting SAF use to 10% of all jet fuel by 2030, despite it currently costing up to five times as much. As one of the only ways to decarbonise aviation, investors and regulators are pushing airlines to up SAF usage. Doing so could also determine whether airlines can ever be considered sustainable under the European Union's green finance rules, impacting their cost of raising money. As it stands, SAF makes up less than 1% of jet fuel in use. Airlines, which operate on razor thin margins and are heavily indebted as they recover from the pandemic, say more needs to be done to boost production and lower the cost. While U.S. firms are benefiting from tax incentives to boost production, Europe has focused on mandating change rather than incentivising it, said Laurent Donceel, acting managing director of lobbying group Airlines for Europe.<br/>