Germany Launches €2Bn Support Package for Hydrogen-Based Sustainable Aviation Fuel

Germany’s Federal Ministry of Transport (BMV) has initiated a public market consultation on a new support scheme for electricity-based renewable aviation fuel (eSAF). The program is designed to accelerate the development of sustainable aviation fuels and lower investment risks for producers, with up to €2 billion in funding allocated to the initiative.

Produced from green hydrogen and sustainable carbon sources, eSAF is considered a key component in aviation’s transition toward climate neutrality. Expanding domestic production capacity is also expected to strengthen Europe’s long-term energy security by reducing reliance on external fuel supplies. The BMV’s funding initiative is the first project launched under the European eSAF Early Movers Coalition and is intended to provide a model for similar programs in other member states.

Scaling up eSAF production to commercial levels requires substantial capital investment. However, market growth has been hindered by demand-side uncertainty, including the limited availability of long-term purchase agreements. The ministry’s funding framework is specifically designed to address these obstacles.

The scheme is centered on a double-auction model adapted from the H2Global mechanism. Under this approach, long-term offtake agreements are signed with eSAF producers, while short-term sales contracts are concluded with fuel distributors. A dedicated intermediary covers the gap between the market-based purchase and sales prices established through competitive bidding.

Through this initiative, Germany is taking a leading role within the eSAF Early Movers Coalition established under the Sustainable Transport Investment Plan (STIP). The possibility of additional countries joining the funding program is currently being explored.