Portugal to start tenders for production of sustainable aircraft fuel

Portugal’s government has received indications of interest from many producers and is proceeding with bids for the manufacturing of sustainable aviation fuel (SAF).

Part of this funding will come from the new rules adopted by the government in October 2024, which allow the transfer of part of the carbon tax to a maximum of €40 million for “decarbonization measures or activities in the civil aviation sector,” Euractiv wrote.

Maria da Graça Carvalho, Portuguese minister of energy, said Portugal meets all the requirements to be a major player in this industry. Encouragement of these fuels calls for reasonably priced renewable energy, which Portugal already boasts.

The minister also mentioned that numerous businesses eager to engage in SAF manufacturing projects in Portugal have been approached and discussed launching certain tenders by the Portuguese government.

This support specifically seeks to boost national production of sustainable aviation fuels (SAF) and sustainable aviation electricity fuels (ISAF), so allocating them under the National Roadmap for Aviation Decarbonisation (RONDA) in 2026.

The money will be distributed from the Carbon Tax and the Aviation Emissions Trading Scheme (ETS) revenue acquired by the Environmental Fund. It is meant to help the sector to become decarbonized.

Regarding the schedules for starting the SAF manufacturing tenders, Graça Carvalho clarified that the newly formed Climate Agency will handle them.

“The Climate Agency should already be running in January or early February; one of the first priorities will be to launch this tender,” she remarked.

Portugal aims to rank among the global producers of sustainable aviation fuel (SAF) at a time when aircraft are required to use 2% of this fuel. Up to 2025, this target will rise progressively.

Insufficient manufacturing, as the airlines have warned, is a barrier to reaching this goal, as shown by the higher price of fuel made from waste cooking oil.

Companies in the sector have responded to this circumstance by adding surcharges, which, like in the case of TAP, drive increased air travel costs.