Questions and answers on the Sustainable Transport Investment Plan

1. What are the main barriers for investment and production of EU-based renewable and low-carbon fuels for aviation and maritime?

The EU has a robust regulatory framework to boost the uptake of renewable and low-carbon fuels for aviation and waterborne transport under the ReFuelEU Aviation and FuelEU Maritime Regulations. Projections show that current EU production capacity is on track to meet the targets for the period from 2025 to 2029 using sustainable biofuels and biomethane. However, investment planning is not yet sufficient to meet the targets after 2030. In particular, the production of e-fuels for aviation and waterborne has not scaled up: no major e-fuel project in the EU has yet reached a final investment decision. As a result, there is a risk of not meeting the 2030 sub-target for synthetic fuels under ReFuelEU Aviation.

The main barriers for investment are 1) high upfront capital costs and high level of technology risk linked to early-stage projects; and 2) a mismatch between buyers and producers on the length of offtake contracts. Fuel producers need long-term commitments to secure financing, while airlines, shipping companies and other fuel users are reluctant to sign long-term offtake agreements because they fear being at a competitive disadvantage as early adopters (“first-mover risk”). The inability of the market to sign offtake agreements creates a significant barrier for final investment decisions in the EU.

2. What are the main challenges in accessing biological feedstock for renewable and low-carbon fuels? What about non-biological feedstock?

Advanced and waste-based biofuels are essential to decarbonising aviation and waterborne transport, but their production is still limited. Today, most sustainable aviation fuel (SAF) comes from waste oils and fats via the HEFA process. While also other production pathways for advanced and waste-based biofuels look promising, only a few are being deployed at commercial scale. The main barriers are 1) limited feedstock supply, with strong competition from other sectors; 2) technological and market risks that prevent new production; and 3) uncertainty for investors due to uncertain long-term access to feedstock.

Similarly, the production of synthetic fuels (e-fuels) is still limited due to the key enabling technologies - such as green hydrogen, and carbon capture – not yet being available at the scale or maturity needed. Ensuring additional renewable electricity production capacity dedicated to hydrogen and reducing its cost is critical to making e-fuels more cost-competitive. Access to reliable and affordable industrial carbon dioxide or biogenic carbon dioxide (from biomass or directly captured from the air) is also crucial for e-fuels production and not yet guaranteed at scale. 

To unlock future potential, Europe needs more investment in new technologies, better collection systems, and new supply chains for underused or currently untapped feedstocks. It is important to identify and address challenges and risks faced throughout the fuels supply chain and to explore integrated approached from sustainable biomass sourcing to advanced biofuels production in the EU.

3. How does the Sustainable Transport Investment Plan help overcome these challenges?

The Sustainable Transport Investment Plan (STIP) reaffirms the Commission's commitment to supporting the transport sector's transition to a climate neutral economy. It gives investors a clear signal that the EU targets are stable, and that the Commission will support the sector throughout this transition. STIP brings together targeted measures to boost investment in renewable and low-carbon fuels across Europe, both in the short and long term. The EU measures under this plan are expected to mobilise at least €2.9 billion by the end of the current MFF period in 2027.

• Innovation Fund: The Commission will support synthetic aviation fuel projects with €153 million and maritime fuel projects with €293 million under the 2024 general call.
• Hydrogen Bank under Innovation Fund: The Commission will open a specific call with a dedicated budget of €300 million to support the production of sustainable aviation and waterborne fuels in December 2025.
• InvestEU: The Commission expects to mobilise investment of around €2 billion for sustainable alternative fuels until 2027 under the InvestEU.
• Horizon Europe: Around €133 million will be mobilised under a new SET Plan flagship and the next Horizon Europe call for 2026 to support R&I projects. These projects will look at de-risking renewable fuel technologies and value chains at EU, national, regional and local level.

In addition, the Commission will work with the interested Member States to launch an eSAF Early Movers Coalition in 2026, mobilising at least €500 million to finance several large-scale projects. This will be done through the organisation of the first pooled double auction pilot for eSAF.

The Commission will also work on establishing an intermediary mechanism for double auctions at EU level, with a view to have a comprehensive understanding of needs and options by the start of the next MFF.

4. How will the Commission improve coordination of market support among Member States?

Tackling the investment challenge demands bold, united action across EU and national levels. The Commission will launch the eSAF Early Movers Coalition by end of this year, to establish a political dialogue with Member States interested in supporting sustainable fuel projects. As of 2026, the Commissions intends to help the committed Member States to launch a first pooled double auction pilot for eSAF, seeking to mobilise at least €500 million. Additional support will be provided through the Competitiveness Coordination Tool.

To promote fuel availability in EU ports and prevent market distortions, the Commission will work with Member States to align incentives under the RED and FuelEU Maritime, ensuring strong and coordinated support for renewable and low-carbon fuels for waterborne transport, such as e-fuels, advanced biofuels, and biomethane. The Commission will also work with Member States to explore options to establish an Important Project of Common European Interest (IPCEI) on sustainable alternative transport fuels for aviation and waterborne transport. The Commission is ready to support the Member States in its early design through the new Design Support Hub.

5. How will the Commission strengthen the enabling conditions for market investments?

The STIP includes measures to streamline implementation and simplify information, reporting, certification, and traceability. The Commission will work to resolve difficulties airlines face in accessing information on SAF supply, including data on prices, volumes, and location.

The forthcoming EU Ports Strategy and Industrial Maritime Strategy will promote investment by strengthening the role of ports in the energy transition and reinforcing Europe's maritime industrial base. The Commission will also assess design options for possible tradable fuel certificate systems, including book-and-claim both for aviation and waterborne sectors

To reduce administrative burden, the Commission will assess options to develop a single monitoring, reporting and verification (MRV) system covering both the ETS Maritime and FuelEU Maritime.

In addition, the Commission will explore using power purchase agreements (PPAs) to reduce financial risk, as successfully done in some other sectors. It will also explore the potential of tripartite agreements to facilitate investments and enhance EU-wide trade of biomethane for the use in waterborne sector.

6. How does the plan support other sectors (road, rail) in addition to aviation and waterborne transport?

STIP focuses on sectors with the fewest current alternatives to decarbonisation – aviation and waterborne transport. The Commission has already put in place comprehensive strategies and frameworks to address the energy transition in road and rail sectors.

In road transport, an industrial policy approach has been introduced under the Industrial Action Plan for the European automotive sector. By the end of the year, the Commission will review CO₂ standards for cars and vans and propose legislation on Clean Corporate Fleets. The Alternative Fuels Infrastructure Regulation (AFIR) sets binding targets for alternative fuel infrastructure across the EU, while the CEF Transport Alternative Fuel Infrastructure Facility (AFIF) has supported over 300 hydrogen stations and 47 000 recharging points since 2021.

For rail, support is already provided through the revised TEN-T Regulation, the Connecting Europe Facility, and the High-Speed Rail Action Plan adopted today, which will boost infrastructure investment and help increase passenger uptake.

7. What are the benefits for Europe's transport and fuel producer industry?

STIP is designed to accelerate Europe's shift to clean transport by de-risking investments. This brings major strategic, economic, and technological benefits for the transport and fuel producer industry. The plan will incentivise the use of fuel mostly produced in the EU. The substantial injection of public money will strengthen investor trust and drive market liquidity.

The tools presented in STIP, such as earmarked calls and further mobilisation of EU programmes, will help first-of-a-kind production plants reach the construction stage. This will give EU producers a global competitive lead and help to scale up the more than 50 demonstration projects already active in Europe.

8. How will the EU shape global rules for renewable and low-carbon fuels?

The production and use of renewable and low-carbon fuels require international cooperation on standards. The Commission will continue to work towards dual conformance of SAF under European and global frameworks. In the maritime sector, the Commission will continue working withing IMO to develop specific certification rules.

The Commission engages with key international partners to facilitate EU investments abroad and secure access to feedstocks. All fuels entering the EU must comply with the Renewable Energy Directive, and they are tracked in the Union Database for Biofuels to ensure high sustainability standards and to prevent fraud.

Imports to the EU market should be subject to fair conditions to ensure a level playing field for EU operators. The Commission stands ready to use the trade defence instruments at its disposal, to deter unfair practices and to take remedial measures against potential injurious imports.

9. What role does the STIP play in fostering innovation?

The EU is currently a global leader in terms of R&I, holding more than 60% of patents in the renewable and low-carbon fuels industry. For eSAF, more than 75% of current projects are in Europe.

STIP will support R&I through its main funding programmes, Horizon Europe and the European Innovation Council. Under the Horizon Europe 2026-2027 work programme, the Commission will launch SET Plan flagship, allocating around €70 million to R&I projects that help de-risk renewable fuel technologies and renewable fuel value chains at EU, national, regional, and local levels. In addition, the ongoing Horizon Europe call for 2025 will provide a total of €63.5 million to support renewable and low-carbon fuels.

For More Information 

Press release - Commission boosts Europe's competitiveness with new plans for high-speed rail and sustainable fuels for aviation and waterborne sectors