Five noteworthy aviation sustainability developments in the past seven days curated by the Ishka Airfinance SAVi team.
Here are the new developments to keep in mind:
1. Court rejects challenge to EU aviation Taxonomy criteria
EU Taxonomy: The General Court of the European Union on 30th September published its judgment in the legal challenge against the EU Taxonomy’s aviation and shipping criteria, rejecting all aviation-related arguments brought by environmental NGOs against the inclusion of aircraft as sustainable “transitional” investments – though granting the NGOs a partial victory on shipping. This comes as the Commission works on reviewing and simplifying the Taxonomy’s technical screening criteria (TSC), including those for aviation and shipping. The case was brought by NGOs Dryade, Fossielvrij NL and Protect Our Winters Austria, and supported by Opportunity Green and CLAW, after the European Commission rejected their 2024 request to review the aviation and shipping TSC (see further details here). The environmental groups are considering an appeal.
Overall, the ruling suggests that future challenges of the Taxonomy’s TSC will need to show that the Commission has exceeded the considerable “broad discretion” it was afforded to draft the criteria – which were enacted through delegated acts outside of the EU’s standard legislative trilogue negotiations. The Court also repeatedly made the point that the plaintiffs needed to establish a “manifest error of assessment” in the Commission’s choices (paras. 30-38), - the NGOs often showed that the Commission could have chosen stricter criteria, but did not provide the contrary evidence, methodological flaw, inconsistency, or other defects to render the Commission’s assessment legally implausible.
On aircraft efficiency, the plaintiffs argued that the thresholds could not represent the sector’s “best performance” when newer aircraft already outperform the ICAO CO2 standard on which they are based. The Court rejected this interpretation of “best performance”, accepting the Commission’s interpretation that transitional activities need not be limited to the absolute best-performing aircraft available and may instead encompass activities with emissions “substantially lower than the sector or industry average”. The Commission could therefore assess qualifying aircraft against the wider in-service fleet rather than only the newest aircraft types (paras. 202-231).
On 1.5°C alignment, the Court rejected the premise that each individual TSC must be demonstrated to follow a 1.5°C-compatible pathway. The Taxonomy Regulation instead requires an economic activity to “support the transition to a climate-neutral economy consistent with a pathway to limit the temperature increase to 1.5°C above pre-industrial levels”. For its assessment of the SAF criteria, see paras. 262-264.
The aircraft replacement ratio was also upheld following the same logic, as the Court accepted that aircraft removed from one operator’s fleet could continue flying elsewhere, but found that this possibility did not, by itself, establish a manifest error. It accepted the Commission’s view that mandatory one-for-one scrappage could discourage the replacement of older, less-efficient aircraft and slow fleet renewal (paras. 246-253).
The Court also rejected arguments on carbon lock-in (the aviation criteria expire at the end of 2032, paras. 211-230), non-CO2 impacts and rail substitution (plaintiffs failed to establish feasible low-carbon alternatives to aviation activity, paras. 268-274).
The NGOs did, however, secure a partial victory on shipping. The Court annulled part of the Commission’s decision over its treatment of methane slippage from LNG-powered vessels (paras.300-315), finding that it "erred in law". Opportunity Green described the win as “remarkable”, given that “historically, internal review applications of this kind have generally not been successful”, and that the ruling showed that the Commission’s discretion is “not a blank cheque”, though it criticised the Court for leaving the aviation criteria untouched.
2. EU Commission reaffirms e-SAF sub-target by 2030, calls on the Parliament to follow suit
EU SAF policy: Filip Cornelis, Director for Aviation and the Commission’s DG MOVE, presented an update on the implementation of ReFuelEU Aviation (the EU’s SAF mandate) during a European Parliament Committee on Transport and Tourism (TRAN) meeting on 28th September. Cornelis answered questions from several MEPs, including one by a Spanish conservative MEP on whether the 2030 e-SAF sub-mandate could be delayed amid a shortage of supply. Cornelis reaffirmed that the EU would “not remove or reduce” mandates as the policy’s credibility remains “critical.” “In every occasion we can, we will repeat that, we stand by the ambition […] we will not reduce our ambition, and that will not be in our proposal next year. Of course, afterwards it [the ReFuelEU Aviation revision proposal] goes to the legislature, so I would say that your [the Parliament’s] opinion and the way you communicate your commitment to the ambition level is just as important as the Commission’s […] I think that will be a very important signal to the market.”
During the same meeting, Jan-Christoph Oetjen – the German centre-right MEP working as the TRAN’s rapporteur for the ReFuelEU Aviation revision – introduced a draft report putting forward a plan for a two-stage system to adopting SAF Book & Claim as part of the upcoming 2027 revision of ReFuelEU Aviation. Although the draft is not a legislative file, it hints to what the Parliament may like to see in the upcoming revision. Its core idea is that a system of “SAF tickets” should be the “basis for airlines to claim SAF ETS allowances under the ETS directive” rather than, as present, proof of physical uplift of SAF. In a second stage, the draft calls on the Commission to establish a “dedicated platform within the UDB [the Union Database] enabling aircraft operators to trade SAF tickets linked to SAF supplied at EU airports, while pursuing the extension of the mechanism to EEA-EFTA countries.”
Meanwhile, and ahead of the expected adoption this quarter of an updated EU Aviation Strategy, European Commission senior representatives shared this week key themes of what the document will contain. At a Commission-convened Connecting Europe by Air event at Brussels Airport, Commissioner for Sustainable Transport and Tourism, Apostolos Tzitzikostas expressed that the EU “must continue pushing the frontiers of innovation” including “electric aircraft, hydrogen, propulsion systems, and smarter operations.” Research “must translate into market-ready programmes […] quickly.”
3. Analysis: SAF’s Hormuz price impact, and what can be done about it
SAF prices: A new whitepaper by the London Stock Exchange Group (LSEG), a provider of financial markets data and infrastructure, and General Index (GX), an energy price reporting agency, finds that a combination of SAF’s relative illiquidity as a traded commodity and the sector’s coupling with fossil jet fuel were largely responsible for HEFA SAF prices trailing increases in jet fuel (fossil crude-based conventional aviation fuel) following the Strait of Hormuz energy crisis. The price evolution of SAF (worth noting – based on a limited data involving 23 bids, 22 offers, and six trades over the course of two months) took place despite SAF’s lack of supply shock during the Hormuz crisis, and with underlying feedstock commodities showing “a far less reactive increase” after the closure of the strait. LSEG and GX propose two directions for HEFA SAF pricing to go in the future: 1) feedstock-anchored pricing of the bio-molecule (i.e., applying a differential over HEFA SAF traded feedstocks like used cooking oil or tallow); or 2) unbundling the molecule from its environmental attribute ($ per tonne CO2e abated). However, the paper does acknowledge that neither is “a finished answer” and both would need liquidity to work.
Beyond price, the paper highlights, the Hormuz shock has “already triggered a wave of energy security
policy responses that favoured domestic biofuels for energy security.” The paper notes Indonesia bringing forward its B50 biodiesel mandate, Malaysia lifting its mandate to B15, India increasing ethanol blends and provision of flex-fuel market support, or Brazil increasing its ethanol blending requirements. “Therefore, regardless of price signal, the same chokepoint that spiked fossil prices strengthened the strategic case for domestic renewables.”
4. India’s SAF readiness at ‘52%’ as policy announcement nears
India SAF policy: A new report by Boeing and the Roundtable on Sustainable Biomaterials (RSB) assessing India’s readiness to scale SAF has given the country a ‘52%’ readiness level across multiple indicators, with market demand and financing support among the least advanced. The 41-page report was released on 29th September and reportedly two weeks ahead of an expected SAF policy announcement by the Indian government. According to Ishka Airfinance SAVi’s latest SAF Policy Map, the Indian government in the process of formulating a definitive SAF policy with a 1% mandate expected to apply from 2027. The RSB and Boeing report, however, describe the incoming policy as an “aspirational SAF blending target” with 2% targeted by 2028 and 5% by 2030. The report estimates that a 5%-by-2030 blending target scenario would translate into 0.6 Mt of SAF, or markedly below the country’s 14-33 Mt of SAF production potential. However, it notes, “India’s SAF readiness is not driven by a lack of resource availability,” with other factors hindering its scale-up. Using a Multi-Criteria Decision Analysis (MCDA) framework, the assessment attributes readiness scores to multiple key dimensions (see page 18). The two key dimensions with the lowest average scores are market demand and investment & financing. On the latter, it found “no evidence of an established debt financing market, nor loans or concessional instruments supporting SAF project development,” while equity investment beyond “strategic corporate activity” also remains “limited and largely unstructured.” While subsidies for first-of-a-kind alternative fuel projects do exist, they are shared with other non-aviation fuels, limiting effectiveness.
5. UKEF backs British SAF technology developer in financing first
UK SAF: UK Export Finance (UKEF) on 1st October announced that Belfast-based clean technology developer CATAGEN has secured commercial funding backed by a UKEF guarantee to support the commercialisation and export of its SAF technology. To Ishka Airfinance’s knowledge, the transaction is the first backed by UKEF related to SAF since the export credit agency broadened its eligibility criteria for UK SAF projects in July.
The financing will support CATAGEN subsidiary ClimaHtech Green Flight, which is developing modular systems capable of producing both e-SAF and bio-SAF using renewable electricity and sustainable biomass. CATAGEN said the UKEF backing would help bridge the gap between “late-stage product development and commercialisation”, accelerate the technology towards market and support international growth. The company is currently developing a first-of-a-kind SAF production project and in May of this year signed a 15-year intended SAF offtake agreement with regional airline Loganair, covering SAF produced through its bio-SAF and e-SAF pathways.
Ishka Airfinance is proud to be a partner of Aviation Carbon 2026. Registrations for Aviation Carbon 2026 are now open. Ishka Airfinance subscribers can use the code EMERAA15 for a 15% discount.
A heartfelt thank you to Christopher Surgenor, Editor & Publisher of GreenAir News, for his pioneering reporting and the lasting contribution of GreenAir News, which closed at the end of September. Surgenor is one of the founders of the Aviation Carbon conference, now part of the SAE Media Group.
