A new report by global consultancy firm Deloitte has raised concerns that the European Union’s ambitious sustainable aviation fuel (SAF) mandate, designed to accelerate aviation decarbonisation, may inadvertently weaken the competitiveness of European airlines.
The study, conducted for Airlines for Europe (A4E) and published on Green Air News, warns that the ReFuelEU Aviation regulation, which requires airlines operating in the EU to gradually increase their use of SAF, could drive passengers and business to non-EU carriers and destinations that are not bound by similar environmental regulations.
Higher Ticket Prices May Push Passengers to Non-EU Hubs
According to the report, ReFuelEU could increase operational costs on certain long-haul routes by up to 15% by 2030, particularly on EU–Asia connections. Deloitte warns this cost disparity might lead passengers to choose alternative hubs such as Istanbul, Dubai, or Doha, where airlines are not required to meet the same SAF obligations.
The study highlighted several types of “leakage” that could arise under the current policy framework:
Hub Bypassing: Travelers opting for non-EU transit hubs to avoid higher SAF-related ticket prices, bypassing major EU hubs such as Paris Charles de Gaulle or Frankfurt Airport.
Route Diversion: Passengers choosing indirect routes via non-EU countries because ReFuelEU only applies to the first flight segment departing from the EU.
Destination Shifts: EU travelers preferring non-EU holiday destinations to avoid additional EU Emission Trading System (ETS) costs, while non-EU travelers avoid EU destinations entirely.
This, Deloitte argues, not only risks revenue loss for EU airlines but also undermines the EU’s climate targets, as global aviation emissions could shift to jurisdictions with less stringent environmental standards.
To address these concerns, Deloitte proposed the introduction of a SAF Book and Claim Accounting Mechanism (SAF-BAM), which it says would maintain a level playing field without significantly raising prices for consumers.
Under this system, airlines could purchase SAF certificates to offset emissions, regardless of where the SAF is physically supplied. Passenger and flight operations data would be integrated to calculate SAF usage per passenger and per flight segment, ensuring transparency.
Revenue generated from the sale of SAF-BAM certificates could be reinvested into aviation green transition projects, including research and development of advanced SAF and zero-emission aircraft technologies.
The report also addressed ongoing discussions about extending the EU’s Carbon Border Adjustment Mechanism (CBAM) to aviation. CBAM currently applies to carbon-intensive imports such as cement and steel to ensure fair competition between EU producers and foreign companies.
However, Deloitte argued that extending CBAM to aviation would be “neither legally nor practically feasible” due to international aviation treaties and the upcoming 2026 review of ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which is expected to reassess alignment with the Paris Agreement.
While European policymakers remain committed to cutting aviation emissions, Deloitte’s warning highlights the delicate balance between climate ambition and airline competitiveness. Without policy adjustments, EU carriers may face reduced market share on international routes, potentially leading to job losses and slower investment in fleet renewal.
The consultancy stressed that adopting SAF-BAM, alongside coordinated international efforts, would ensure that climate goals are met without disproportionately burdening EU airlines or pushing travelers to less regulated markets.