The entry into force of Regulation (EU) 2023/2405 (ReFuelEU Aviation)¹ in January 2025 represents one of the most ambitious steps taken by the European Union to decarbonise air transport. This regulation, which imposes progressive obligations to incorporate sustainable aviation fuels (SAF) on all flights departing from European airports, provides for targets that increase gradually to 70% by 2050.
But, as it is often the case in complex transitions, the regulatory will clashes with the industrial, commercial and operational realities of the industry. Despite the consensus on the need for urgent action on climate change, European airlines are already a high number of structural problems in implementing the regulation. Exorbitant pricing, ill-prepared and uncompetitive markets, contractual uncertainty and regulatory misalignments are hampering the effective adoption of the SAF, making the transition more expensive and jeopardising the industry’s ability to meet climate objectives without losing competitiveness².
In this newsletter, we will briefly explore the key elements of this Regulation, the new obligations for aircraft operators and fuel suppliers, and, above all, the practical challenges faced by the industry in its implementation, highlighting, in particular, the industry’s growing concern about the need to revise the mandatory timelines if the minimum production of SAF is not met, thus preventing the regulatory objectives from collapsing due to lack of industrial viability.
WHAT ARE THE REQUIREMENTS OF THE REFUELEU AVIATION REGULATION?
The ReFuelEU Aviation Regulation has a clear objective: to boost the use of sustainable fuels and reduce the carbon footprint of air transport in the European Union. To this end, it establishes a mandatory framework that affects airlines, airport operators and fuel suppliers alike.
To begin with, its scope covers EU airports with more than 800,000 passengers or 100,000 tonnes of cargo per year and imposes obligations on all aircraft operators operating at least 500 commercial flights departing from EU airports in one year, or 52 cargo flights during the same period³.
Within this framework, fuel suppliers will have to ensure the supply of a minimum amount of SAF within the total offered at EU airports. This has been set as a mandatory quota to be guaranteed and used, increasing progressively: 2% in 2025, 6% in 2030, 20% in 2035 and reaching 70% in 2050 and, in addition, from 2030 onwards, 1.2% of these fuels must also be synthetic (e-SAF), increasing to 35% in 2050.
At the same time, airlines must comply with the so-called anti-tankering clause, under which they have to refuel at least 90% of the fuel needed for their flights from the European airport of departure, thus limiting practices that reduce the cost of fuel used by refuelling in non-EU countries or cheaper hubs⁴.
In addition, airlines are required to submit annual reports, verified by certified external bodies, detailing refuelling on a flight-by-flight basis and justifying any non-compliance, which greatly complicates the administrative work of the airlines⁵.
The Regulation also allows competent authorities to grant individual route exemptions in case of unavailability of SAF or for safety reasons, such as fuel shortages, adverse weather conditions, air traffic control delays or high probability of diversions.
SANCTIONING REGIME IMPOSED BY THE REGULATION
Moreover, we must remember that, according to Article 12 of the Regulation, Member States are obliged to establish and implement an effective, proportionate and deterrent system of penalties to ensure its provisions are complied with. However, the adoption of this sanctioning regime has been uneven in the different countries of the Union. This is the case in Spain, where it has not yet been adopted, which causes significant legal and operational uncertainty for airlines.
Currently, Draft Bill 121/020⁶ amending the Air Navigation Act and the Aviation Safety Act⁷, provides for the introduction of fines ranging from EUR 500 to EUR 50,000 for minor breaches, such as late or unverified submission of the reports required by the regulation, and more severe financial penalties, calculated on the basis of the price of unjustified fuel and volume, for cases such as failure to comply with the anti-tankering obligation or the submission of defective reports following a request from AESA.
Moreover, it seems that Spanish regulations will also require external audits to verify compliance with these obligations, evidencing a trend towards more rigourous supervision and traceability.
The Spanish legislator’s failure to meet the deadline set in the Regulation for incorporating this sanctioning regime which, it should be remembered, required its incorporation by 31 December 2024 creates a concerning regulatory void. This delay is in contrast with the expedition with which other regulations have been approved, reinforcing the perception that airlines are being subjected to disproportionate pressure without receiving the necessary support to adapt to the changes, as will be discussed below.
THE REGULATION AND THE INDUSTRY’S STRUCTURAL PROBLEMS
Beyond the legal uncertainty described above, the European regulation has fundamental weaknesses that seriously hamper its effective application. Despite its climate ambition, its current design introduces distortions in the market, limits airlines’ operational flexibility and poses considerable economic risks for a sector that is still reeling from the aftermath of the pandemic.
One of the main obstacles is the limited supply of SAF in Europe, highly concentrated in just a few players with very limited production capacity, which clashes head-on with the growth in mandatory demand and creates strong tensions between what is required by regulation and what the market actually offers.
In addition, as reported by industry participants, current accounting and certification frameworks prevent airlines from being able to directly apply the volumes of SAF they purchase independently to the fulfilment of suppliers’ obligations. To do so, they must resort to complex and costly resale operations. This rigidity limits the industry’s ability to develop efficient bilateral agreements and reduces competition.
In this context, it should be noted that, despite the mandates imposed, insufficient mechanisms have been activated to incentivise producers to invest in new SAF plants. Uncertain profitability, unclear contractual frameworks and market volatility, coupled with an insufficient fiscal policy, make investors hesitant to commit capital, slowing down the development of critical infrastructure for the transition.
Again, the obligation to refuel at least 90% of the required fuel at each EU airport is a critical measure since, although its purpose is legitimate anti-tankering, in practice, it hampers logistical optimisation, especially on routes connecting to regions outside the EU or when faced with local operational constraints.
This is compounded by the lack of interoperability between regulatory frameworks, which has been highlighted by IATA: the limited convergence between European (RED II) and international (CORSIA) standards limits the acceptance of SAF outside the EU, which restricts demand and discourages investment by non-European airlines⁸.
Thus, the combination of insufficient supply, inadequate infrastructure and closed markets is creating a significant distortion: airlines have to pay much higher prices without guaranteed access to SAF, without proper certification of their sustainability, and without visibility on the final destination of the fuel. The result is high uncertainty about the future evolution of demand, prices and the necessary infrastructure, jeopardising investment in new production plants and key logistical capacities for the deployment of SAF.
INDUSTRY CONCERNS: IMPLEMENTATION CHALLENGES AND RISKS OF PREMATURE TRANSITION
Given the magnitude of the changes to be implemented, the aviation industry has clearly expressed its concerns about the impossibility of achieving timely implementation of the Regulation. While the incorporation of SAF as a sustainable alternative represents progress from an environmental point of view, its premature implementation, without strong production and infrastructure support, could lead to undesirable adverse effects.
One of the main concerns is the immediate economic impact: airlines are facing significant surcharges imposed by suppliers, which, in many cases, pass on their own compliance fees. Said surcharges are not always accompanied by the sustainability certificates needed to access mechanisms such as the EU ETS. According to an IATA study, the surcharges applied in 2025 could double the actual cost overrun of the ETS, reflecting an oligopolistic market with limited infrastructure and competition⁹.
In this context, the threat of high penalties especially in countries where the sanctioning regimes ystem is not yet clearly defined adds to the economic pressure, creating an uncertain environment for airlines. This pressure could translate into route and frequency cuts, reduced connectivity and, above all, higher air fares for European passengers¹⁰.
A particularly relevant point of criticism is related to to the rigidity of the 90%-refuelling clause mentioned above, which applies even to foreign airlines already using SAF on inbound flights. This obligation generates duplicate costs and questions the fairness of the system, while limiting the possibility of moving towards global decarbonisation based on efficiency criteria rather than geographic barriers.
In this line, a more flexible regulation which recognises the use of SAF regardless of their refuelling point would allow for a more effective energy transition, avoiding distortions in competition and artificial barriers to international trade. A more open and coordinated vision would be key to promote a global deployment of UFTS aligned with market principles and real sustainability.
CONCLUSIONS: A TURBULENT TAKE-OFF
The ReFuelEU Aviation Regulation represents a milestone in Europe’s climate strategy for air transport. Its objective is ambitious and necessary. However, its success will depend on the EU’s ability to complement the regulatory requirement with effective market mechanisms, real economic incentives to reduce the impact of additional costs and a consistent industrial vision.
If the current issues inflated prices, logistical rigidities, lack of industrial investment and regulatory misalignment are not corrected, the result will not be a more sustainable aviation, but a costly, chaotic and uneven transition, which is unlikely to meet the proposed deadlines unless they are extended.
The window of opportunity to activate a competitive, transparent and well-regulated European SAF market is closing. To re-open it, Europe needs to act urgently: harmonise accounting standards, establish robust central registries and ensure that environmental sustainability does not become an unsustainable burden for airlines.
In parallel, at national level, the lack of a clear sanctioning regime in Spain adds uncertainty to the current context. Airlines need a predictable framework to plan investments, adjust operations and comply with their obligations without fear of uncertain or disproportionate penalties. A delay in this area conveys an image of institutional lack of coordination that undermines the industry’s energy transition.
Achieving climate neutrality in aviation is possible, but only if we build a consistent regulatory ecosystem, with the right incentives, a shared vision and a roadmap to ensure that no actor is left behind in this process.
1 Regulation (EU) 2023/2405 of the European Parliament and of the Council of 18 October 2023 on ensuring a level playing field for sustainable air transport («ReFuelEU Aviation»), which is part of the European Union’s «Fit for 55» legislative package.
2 Notwithstanding what will be presented in this newsletter, it is worth noting that the overall CO2 emissions generated by aviation are comparatively lower than other industries, such as land transport or energy production. However, the latter have received a regulatory treatment that could be considered less restrictive taking into account the impact of CO2 emissions from these industries on total emissions.
3 The Commission, in collaboration with Eurocontrol and in coordination with the Member States, will publish annually an updated list of aircraft operators subject to the Regulation, together with theirrespective allocations to the competent Member State. For illustrative purposes, reference is made to the list published by the Commission.
4 It is important to note that the 90%-refuelling requirement must be met for each individual European airport from which the airline operates, not just an overall average across its entire annual network.
5 The first report was due by 31 March 2025, with data from 2024.
6 As of today, the regulatory amendment to incorporate the new penalty system is still undergoing the relevant parliamentary process.
7 For better reference, we refer to the latest version of the Parliamentary Bill, published on 14 May 2025, and the information published in AESA, in the briefing of the State Aviation Safety Agency, on 29 January 2025.
8 Source: Access to SAF in Europe, IATA.
9 Source: Access to SAF in Europe, IATA.
10 While other industries have subsidies and support schemes, aviation seems to face regulatory burdens without adequate offsets. For example, road transport, with a much higher emission impact, has received subsidies for the sustainable refurbishment of heavy-duty vehicles. For supporting purposes, we refer to the information published on the website of the Ministry of Transport.
The information provided on this document does not, and is not intended to, constitute legal advice. All rights reserved. Reproduction in any form, distribution, transfer, and any kind of use of this document, either in its entirety or in part, is prohibited without prior authorization from PionAirLaw.