Europe Raises SAF Mandate to Fight Against Climate Issues

Investment Insights

With the introduction of the sustainable aviation fuel (SAF) mandate, the European Union (EU) has once again demonstrated its leadership capabilities in climate change issues. The new regulation under the ‘ReFuelEU’ strategy will help reduce carbon pollution by the end of the decade. The primary objective of the ReFuelEU aviation mandate is to reduce carbon emissions and begin using alternative fuels that are sustainable in aviation. However, the European Union aviation's sustainable fuel mandate is only the beginning of the government’s plan to back SAF and ultimately sustainable aviation.

Key Takeaways:

  • Investing in the right type of biofuels is important otherwise, companies would lose their credibility with the customers.
  • With ESG parameters becoming a major driver of business valuation, any misconduct by a company might risk its brand image and impact valuation.
  • Fulfilling the sustainability targets will help companies to improve their brand value and ESG rating.
  • As per the study from PwC and Strategy, it is anticipated that the addition of SAF will increase the fuel cost for airlines by up to 16% by 2038.

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