The Loophole and Its Commercial Stakes

The contested proposal would permit biofuel refiners running HEFA or HVO processes to declare electrolytic hydrogen consumed in those pathways as a contribution toward the ReFuelEU e-SAF sub-mandate — the regulation’s ring-fenced obligation for genuine Power-to-Liquid fuel. Critics argue this reclassification is category fraud: HEFA and HVO are biogenic conversion routes, not PtL. Crediting them under the e-SAF sub-mandate would allow incumbents to discharge the obligation using existing refinery assets, removing the revenue certainty that underpins multi-hundred-million-euro PtL project finance structures.

For compliance and finance directors, the practical consequence is direct: offtake contracts anchored to the e-SAF sub-mandate carry a regulatory-basis risk if the accounting perimeter is redrawn. Any airline or fuel supplier structuring a long-dated PtL offtake deal today must insert explicit mandate-definition clauses to protect against a retroactive reclassification that could strand contracted volumes outside the relevant compliance bucket.

Market Context: Mandate Compliance Ahead of Schedule, PtL Still Lagging

The broader SAF picture offers a mixed signal. EASA’s Annual Technical Report confirmed that EU airports reached a 2.8% SAF share — equivalent to 1.1 Mt — in 2025, comfortably above the 2% ReFuelEU floor. That headline outperformance, however, is almost entirely attributable to biogenic SAF pathways. PtL e-SAF remains a negligible fraction of supply, meaning the sub-mandate exists precisely to force dedicated electrolyser-to-fuel investment that the market has not yet delivered voluntarily.

The e-SAF sub-mandates escalate steeply through 2030 and 2032 under ReFuelEU, creating the demand signal that project developers and infrastructure funds have cited in prospectuses. Diluting the definition of what qualifies undermines that signal at exactly the moment when final investment decisions on first-of-kind PtL facilities require bankable revenue certainty.

Regulatory and Compliance Risk Outlook

The coalition’s intervention signals that the ReFuelEU implementation phase is entering contested territory. Compliance officers at airlines, fuel suppliers, and PtL developers should track the European Commission’s response closely: if the accounting proposal advances through a delegated act or implementing regulation, it could reshape the competitive landscape between biofuel incumbents and PtL entrants before 2028. The interaction with RED III RFNBO additionality and temporal-correlation requirements adds a further layer of definitional complexity that legal teams must monitor.

It is worth noting the efficiency context: PtL e-fuels consume substantially more renewable electricity per kilometre than battery-electric alternatives — roughly five times more on a well-to-wheel basis — making them commercially viable primarily where electrification is not feasible, chiefly long-haul aviation. That is precisely why aviation regulators designed the e-SAF sub-mandate in the first place, and why preserving its integrity matters for the credibility of the entire ReFuelEU architecture.

Sources

• Safeguarding the Integrity of EU Synthetic Fuels Targets under ReFuelEU Aviation & FuelEU Maritime – CleanTechnica
• EU sustainable aviation fuel supply exceeds 2025 ReFuelEU Aviation target | EASA
• ReFuelEU Aviation · blend trajectory & scope | e-fuels.com

Featured image via Unsplash.