The European Commission has launched its Sustainable Transport Investment Plan (STIP), which would roll out nearly €3bn ($3.4bn) in subsidies towards cleaner aviation and maritime fuels by 2027, in a bid to meet its ambitious targets for renewable hydrogen-based fuels in these sectors.

The EU has passed a mandate for 1.2% of aviation fuels to be “renewable fuels of non-biological origin” — the bloc’s term for green hydrogen and its derivatives — by 2030 as part of its ReFuelEU Aviation package.

It has also set out a non-binding target of 1% of shipping’s final energy consumption to come from these fuels by 2031 — with a binding 2% target by 2034 if it is not met.

The European Commission expects that as a result, around 20 million tonnes of biogenic and green hydrogen-based sustainable fuels will be needed for both aviation and maritime by 2035.

However, while its projections suggest that the EU is on track to have enough sustainable fuels supply from biogenic sources to meet targets up to 2029, the bloc risks not being able to meet the sub-targets for e-fuels, since no major projects have yet reached a final investment decision.

STIP includes €446m for projects producing synthetic RFNBO e-fuels via the Innovation Fund — split between €153m for aviation and €293m for maritime — and another €300m via the European Hydrogen Bank.

The programme has also pegged €2bn through InvestEU to go towards sustainable fuels more broadly, as well as €133m for research and innovation into these fuels via the European Hydrogen Bank.

Outside of STIP, the EU will also set up an “early movers coalition” double-sided auction pilot project with its member states by the end of this year, which would see the launch of a €500m tender for synthetic aviation fuels next year.

This will feed into the European Commission’s plans to set up an intermediary mechanism for double-sided auctions to supply the aviation and maritime sectors with clean fuels at an EU level by the start of the next long-term budget between 2028 and 2034.

The European Commission notes in a Q&A document that in addition to high upfront capital costs for e-fuel projects, offtakers in aviation and maritime are reluctant to lock into long-term offtake contracts necessary for developers to secure financing, due to the fear that they will be at a competitive disadvantage as early adopters when the first volumes are expensive.

“Our Sustainable Transport Investment Plan is a decisive step towards a sustainable future,” said Apostolos Tzitzikostas, the commissioner for sustainable transport and tourism.

“It’s not just about cutting emissions — it’s about building a stronger, more competitive and resilient Europe that leads in sustainable transport. This ambitious plan shows the Commission’s firm commitment to scaling up renewable and low-carbon fuels in aviation and waterborne transport.
“Success will depend on close cooperation among Member States, industry, financiers and civil society to turn this challenge into a strategic opportunity for Europe.”

Last month, a European Commission official had stressed during a panel at European Hydrogen Week that the targets set out by ReFuelEU Aviation would not be changed in as part of a planned review by 2027, with STIP designed to help the industry meet those targets despite the slow progress on production and offtake to date.