LUSA 01/15/2025

Lusa - Business News - Portugal: Government to launch sustainable aviation fuel tenders

Lisbon, Jan. 14, 2025 (Lusa) - Portugal's government is going ahead with tenders for the production of sustainable aviation fuel (SAF) and has already received expressions of interest from "several companies", the minister for the environment and energy, Maria da Graça Carvalho, announced on Tuesday.

"What we want is for Portugal to be a European and even global producer of sustainable aviation fuels (SAF)," she said on the sidelines of the ceremony to set up the Aviation Sustainability Alliance (ASA), which will precisely define the national strategy for sustainability in the sector.

The minister explained that the country has all the conditions to play a leading role in this area, since "promoting these fuels requires renewable energy at an affordable price, which is the case in Portugal".

"We have great renewable energy potential," emphasised Maria da Graça Carvalho.

She also revealed that there have already been contacts from several companies interested in going ahead with SAF production projects in Portugal, and the government is studying the launch of specific tenders.

"Fortunately, we have many interested companies that have presented studies and projects to be implemented in Portugal. There is a lot of national and international interest," she said.

Part of this support will come from the new rules the cabinet approved in October 2024, which provide for the transfer of part of the carbon tax to a maximum of €40 million for "decarbonisation actions or activities in the civil aviation sector".

More specifically, this support will aim to stimulate the national production of sustainable aviation fuels (SAF) and sustainable aviation electro fuels (ISAF) - to be allocated under the National Roadmap for Aviation Decarbonisation (RONDA) in 2026. The amount will be allocated through the revenues obtained by the Environmental Fund via the Aviation Emissions Trading Scheme (ETS) and the carbon tax. It should contribute to the sector's decarbonisation.

Asked about the timetable for launching the tenders for SAF production, Maria da Graça Carvalho explained that they will be run by the Climate Agency, which is in the process of being set up.

"In January or early February, the Climate Agency should already be up and running, and one of the first priorities will be to launch this tender," she said, no doubt that it would attract several consortia.

The aim is to put Portugal on the list of sustainable aviation fuel (SAF) producers worldwide at a time when airlines have been obliged, since 1 January, to incorporate 2% SAF. This target will increase progressively until 2050.

As airlines have warned, one of the obstacles to meeting this target is the lack of production, which is also reflected in the higher prices of this type of fuel, which can be produced, for example, from used cooking oil.

This situation has led companies in the sector to implement surcharges, which are reflected in higher prices for air travel, as was the case with TAP.

Last week, TAP announced that "to compensate for the additional costs partially", it will introduce a SAF surcharge, "which will apply on departure from European airports (except domestic flights)". This charge will vary between two euros in economy class in Europe and €24 in business for intercontinental flights.

The minister for the environment and energy, along with the minister for infrastructure and housing, Miguel Pinto Luz, today presided over the ceremony to set up the Alliance for Sustainability in Aviation (ASA), which will include around 50 organisations. It took place in Sintra, at the Air Museum, at Air Base No. 1.

The ASA, which was set up as part of the National Roadmap for the Decarbonisation of Aviation (RONDA) and on the principle of cooperation between the different stakeholders in the civil aviation system in Portugal, brings together the aviation sector, industry associations, interest groups, representatives of institutions and academia and companies operating in different capacities in the supply chain and in the transport and logistics sector in general, with a view to a debate that integrates the different dimensions of sustainability (social, economic and environmental).

SCR/ADB // ADB.

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