Sustainable Transport Investment Plan (STIP)
Recommendations for investments in the ramp-up of renewable and carbon-neutral fuels to the European Commission
4 September 2025
Key Recommendations
The ramp-up of renewable and CO2-neutral fuels1 is, alongside the switch to alternative drive systems and a maximum ramp-up of electromobility, the second key lever for the defossilisation of transport in Europe. However, the existing European regulatory framework does not set sufficient incentives for investments in renewable and CO2-neutral fuels. The European Commission should therefore use the Sustainable Transport Investment Plan (STIP) to put forward a strategy for unlocking the climate protection potential of renewable and increasingly CO2-neutral fuels across all transport modes by triggering and securing investments. It must be taken into account that in aviation and maritime transport, renewable and CO2-neutral fuels will represent the only long-term option for far-reaching defossilisation.
1. The STIP’s focus on measures to accelerate investments in renewable fuels is appropriate, given the urgent need for action. The current European regulatory framework does not provide sufficient investment incentives.
2. A strong emphasis on the specific needs for renewable fuels in aviation and maritime transport is also welcome. In these sectors, renewable fuels are the only viable option for achieving farreaching defossilisation in the long term. The STIP must particularly take this into account and help to offset the still enormous additional costs of renewable fuels while ensuring a level playing field.
3. For a comprehensive approach to scaling up renewable fuels, the STIP must address all modes of transport. An accelerated and large-scale ramp-up can only be achieved through a
1 Renewable fuels refer to all fuels produced from biogenic raw materials and/or based on green hydrogen produced with renewable electricity. Electricity-based fuels or renewable fuels of non-biogenic origin (RFNBO) such as e-methanol, PtL kerosene or e-diesel require not only green hydrogen but also CO2, which can be obtained from industrial sources, biogenic sources or directly from the atmosphere (direct air capture). Renewable fuels have a GHG reduction obligation of up to 65% compared to the fossil comparator, while RFNBO-compliant and low-CO2 fuels have a GHG reduction obligation of 70%. If renewable fuels achieve a greenhouse gas reduction of nearly 100 per cent over their life cycle compared to fossil fuels, they are also referred to as CO2-neutral fuels. Renewable fuels that do not achieve this nearly 100 per cent greenhouse gas reduction over their life cycle are also referred to as low-carbon fuels.
package of appropriate measures. Renewable fuels make an indispensable contribution to climate protection in the existing fleet of passenger cars and trucks, in the operation of hydrogen vehicles, as well as in non-electrified rail transport and inland waterway transport.
4. Overall, with its current approach to the STIP, the European Commission falls short of its own ambition to present a strategic investment framework for climate protection across all modes of transport. This requires either an expansion of the STIP or an analogous package of instruments covering additional investment fields for all modes of transport. These include efficiency improvements in existing transport technologies and solutions, the use of digitalisation potential, the development of charging and refuelling infrastructures, as well as investments in innovative technologies.
5. The STIP should provide a coherent and holistic framework for investments in the defossilisation of transport. Proposed measures should create and strengthen coherence with and between existing EU regulations, funds, the EU’s Multiannual Financial Framework and policies adopted by international organisations. This also requires that ETS revenues are channelled back into contributing sectors, in particular aviation and maritime transport.
6. The STIP measures to ramp up renewable fuels must meet the following requirements:
▪ Secure investments through a reliable roadmap for scale-up, guarantees for existing assets, and support schemes for first movers
▪ Develop the international market for RFNBOs through pragmatic regulatory requirements, and functional certification systems
▪ Enable climate protection in aviation and maritime transport by means of greater flexibility (Book & Claim), SAF financing instruments and efforts to ensure a global level playing field
▪ Set clear CO2 price signals in road transport
▪ Incentivise investments in the transformation of the mineral oil industry to strengthen Europe’s industrial base and supply security
1. State of play: The existing regulatory framework does not provide sufficient incentives for investments in carbon-neutral fuels.
The mission letter from the President of the European Commission to the Commissioner for Sustainable Transport and Tourism sets out a clear mandate: to develop a Sustainable Transport Investment Plan (STIP) that stimulates investment in climate protection within the transport sector. The STIP is designed to cover all modes of transport. In its Call for Evidence, the Commission rightly highlights the need for stronger action to address the slow uptake of renewable fuels, particularly in aviation and shipping. To this end, the STIP should prioritise measures that de-risk private investment and foster the development of production capacities for renewable and low-carbon fuels.
So far, the EU has sought to accelerate the uptake of renewable fuels primarily by imposing obligations on Member States and companies. Under the Green Deal, the EU set binding targets for the use of renewable energy in transport with the revision of the Renewable Energy Directive (RED III). By 2030, at least 29% of final energy consumption in the transport sector must come from renewable sources, or alternatively, a minimum reduction of 14.5% in greenhouse gas intensity compared to fossil fuels must be achieved. RED III also introduces a common sub-quota for advanced biofuels and renewable fuels of non-biological origin (RFNBO) of 5.5% by 2030, with an interim target of 1% in 2025. Within this, a dedicated RFNBO sub-quota of at least 1% mustbe met by 2030. Complementing these targets, the ReFuelEU Aviation and FuelEU Maritime regulations applicable from 2025 establish specific, uniform EU-wide requirements for the uptake of sustainable fuels in aviation and shipping. ReFuelEU Aviation obliges fuel suppliers to blend sustainable aviation fuels (SAF), with a mandatory RFNBO share from 2030 onwards. FuelEU Maritime requires shipping companies to progressively reduce the greenhouse gas intensity of onboard energy consumption and sets explicit RFNBO targets.
Despite these targets and quota commitments, the European regulatory framework still fails to provide adequate incentives for investment in RFNBOs and advanced biofuels from innovative technologies and untapped biomass potential. Investors face significant barriers: a short regulatory horizon, legal uncertainty, high complexity, limited incentives, and the absence of comparable frameworks in other world regions. These factors translate into substantial risks for projects with investment cycles of 15–20 years. Moreover, the current design of the EU Emissions Trading System and sectoral quota obligations in aviation and maritime transport are slowing down the scale-up of urgently needed CO₂neutral fuels. To comply with EU targets, European companies must bear disproportionately high additional costs. At the same time, the regulation unilaterally raises transport costs at European airports and seaports, thereby creating incentives to bypass costly European climate measures. These distortions of competition risk a shift in traffic to non-European hubs with lower climate ambitions and weaker social standards (carbon leakage).
2. Ramp-up of CO2-neutral fuels requires a package of measures
An accelerated and comprehensive ramp-up of CO₂-neutral fuels can only be achieved through a coherent package of targeted measures. The STIP should therefore set out a clear strategy to unlock the climate protection potential of CO₂-neutral fuels across all modes of transport. Together with the transition to alternative drive systems and the large-scale deployment of electromobility, the rapid rampup of CO₂-neutral fuels represents the second key leverfor the defossilisation of transport. CO₂-neutral fuels play an indispensable role: in the existing fleet of cars and trucks, in aviation and maritime transport, in non-electrified rail, and in inland waterway transport. In aviation and shipping, they are the only long-term option to achieve extensive defossilisation – even if battery-electric and hydrogen-powered drives become increasingly available. The STIP must therefore give special priority to these modes of transport. The measures under the STIP to accelerate renewable fuels must fulfil the following requirements:
Investments in RFNBOs and advanced biofuels from innovative production methods and untapped biomass potential must be safeguarded through a long-term roadmap for the ramp-up of carbon-neutral fuels, complemented by grandfathering provisions. Instruments with a CO₂ steering effect – including a reform of energy taxation forroad, rail and inland waterways, as well as an effective emissions trading system for road transport – are essential to create market incentives, expand demand, and establish a resilient market for CO₂-neutral fuels. To unlock investment, barriers must be removed, reliable financing mechanisms introduced, and an international market for CO₂-neutral fuels developed. Practical and workable regulatory requirements for products, combined with more flexible marketing and crediting rules, will be crucial in this regard. For international modes of transport, additional measures are needed to prevent distortions of competition and carbon leakage, while user incentives must be strengthened to reduce the cost gap between renewable and fossil fuels. Secure investment requires a robust roadmap, grandfathering guarantees, and targeted support schemes for first movers.
The transition to renewable fuels in transport can only succeed if backed by a long-term strategy that provides planning and investment certainty. Considering the long lead times for planning, permitting, and construction, as well as typical investment cycles of 15–20 years for production facilities, a stable and predictable regulatory framework is indispensable to trigger large-scale investment in and for Europe.
Continue RED III in a long-term, consistent and harmonised manner
The RED III targets are currently defined only until 2030. However, new plants for the production of CO₂-neutral fuels require a regulatory framework that extends well beyond 2030 in order to provide investment security. The scheduled review of RED III in 2027 must therefore be used to ensure its long-term, consistent and harmonised continuation. This continuation must be closely aligned with the ReFuelEU Aviation and FuelEU Maritime regulations, which already establish a trajectory for CO₂neutral fuels in aviation and maritime transport until 2050. At the same time, the European Commission must prevent Member States from pursuing divergent national approaches. In Germany, for example, this includes the abolition of the national PtL quota in aviation as well as a possible double regulation in aviation and maritime transport through the GHG reduction quota.
Creating investment security for first movers through grandfathering provisions
Regular monitoring and adjustment of regulations by national and European policymakers is an important and legitimate task. However, frequent or unpredictable short-term changes to the regulatory
and political framework pose a substantial risk of misinvestment for projects with typical investment cycles of 15–20 years. In a still-emerging market for hydrogen technologies and CO₂-neutral fuels, investors in pilot plants must therefore be granted grandfathering rights that guarantee regulatory stability for the required operating period of 15–20 years.
Introduce support instruments for first movers and channel ETS revenues into defossilisation of aviation and maritime transport
Support programmes for industrial-scale production facilities of CO₂-neutral fuels are essential to offset the competitive disadvantages faced by first movers. PtX double auctions, modelled on the German H2Global approach, represent a suitable instrument. These must be implemented quickly, scaled up, and secured through long-term financing. To ensure sustainable funding, revenues from the inclusion of aviation and maritime transport in the European Emissions Trading System (EU ETS 1) should be earmarked for this purpose and channelled directly into the defossilisation of these sectors.
2.1 Develop an international market for RFNBO through practical regulatory requirements and functional certification systems
The cost-effective provision of CO₂-neutral fuels – particularly RFNBO – in Germany and Europe will require extensive imports from regions with favourable conditions to produce renewable energy. The EU should therefore expand import capacities, strengthen strategic energy partnerships, and actively promote the creation of an international RFNBO market.
Bring forward the review of delegated acts on RFNBO and make criteria more practical
To foster an international RFNBO market, trade barriers must be removed, including through more practical definitions of low-carbon and renewable hydrogen as well as CO₂ sources for RFNBO production. The review of the relevant criteria, currently scheduled for 2028, should be advanced. This would also benefit producers within the EU.
Establish binding safety standards for use, refuelling, loading and emergency management
The safe operation of production plants and logistics chains for renewable fuels requires binding safety standards covering use, refuelling, loading and emergency management. This must include provisions for explosion hazard areas (Ex zones), thermal runaway, high-voltage safety and ADR compatibility. In addition, EU-wide harmonised guidelines for loading and unloading operations at chemical sites should be introduced to ensure operational safety and strengthen acceptance in practice.
2.2 Enable climate protection in aviation and maritime transport through greater flexibility (book&claim), SAF financing instruments, and commitment to a globally level playing field
With the Green Deal, the EU has created momentum for climate-neutral aviation and decarbonised maritime transport. However, the regulatory framework has not been designed in a competitively neutral way. Current EU legislation unilaterally increases costs for transport via European airports and seaports, thereby creating incentives to shift traffic andemissions abroad (carbon leakage) In aviation, a competitiveness check and necessary improvements must be carried out quickly in order to create
an international level playing field and enable the EU to meet its quota commitments for sustainable aviation fuels, which the aviation industry supports.
Enable competition-neutral implementation of EU quota obligations for sustainable aviation fuels via SAF Levy or SAF Rebalancing Charge
The current design of ReFuelEU Aviation and its SAF quota obligations unilaterally increases the cost of flights via European hubs, thereby creating incentives to circumvent cost-intensive European climate protection instruments. The EU must urgently introduce instruments to correctthese distortions of competition, using the review process laid down in the regulation at the latest. The introduction of a European, destination-based and earmarked climate levy (SAF Levy) is one way of offsetting competitive distortions to the detriment of European airlines, reducing carbon leakage and securing the ramp-up of sustainable aviation fuels. Alternative instruments for creating fair international competition conditions, such as a SAF Rebalancing Charge, should be examined. This charge would be levied on nonEU airlines for flight segments not subject to the SAF quota on flight connections via non-European hubs. The functionality and practicability of the instruments must be ensured.
Expand efforts to achieve a global level playing field at ICAO and IMO
Efforts to achieve internationally harmonised and effective climate protection measures at the level of the International Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) must be intensified. The EU should advocate for strengthening ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). As an existing global system, CORSIA has the potential to contribute to a level playing field beyond Europe. The EU should continue to actively support the ongoing negotiations on the introduction of an internationally applicable Greenhouse Gas Fuel Intensity Standard (GSI) and an emissions pricing mechanism under the auspices of the IMO for shipping and ensure that these negotiations are concluded with ambitious results by the end of the year. Following the introduction of IMO requirements, FuelEU Maritime and the EU ETS for maritime transport must be harmonised with the international requirements in order to prevent double regulation with corresponding cost disadvantages for European transport service providers and shippers.
Make more SAF allowances available
The certificates currently foreseen in the ETS to compensate for the additional costs of using sustainable aviation fuels (SAF allowances or FEETS) will not be sufficient and are expected to be used up by 2028 at the latest. The option to extend the programme, which is already provided for in the EU ETS Directive, should therefore be exercised, and the quantitative cap and time limit on SAF allowances should be lifted
Introduce and enforce functional verification and certification systems
International standards for sustainability and quality criteria, international certificate trading and international guidelines for crediting sustainable fuels in the carbon footprints of users and their customers must be implemented. The flexibility mechanism established in ReFuelEU Aviation should be further developed into a book & claim system. At the same time, existing standards must be enforced internationally through audits, and violations must be sanctioned.
2.3 Set clear CO₂ price signals in road transport by rapidly introducing ETS 2 and amending the ETD
For road transport, CO₂ price signals through the European Emissions Trading System (ETS 2) and an amendment to the Energy Tax Directive (ETD) are key incentive instruments. The revised ETD must be adopted without delay and include targeted incentives for the use of CO₂-neutral fuels in road, rail and inland waterway transport. During a transitional phase, CO₂-neutral fuels should be exempt from minimum taxation across Europe in order to promote investment in RFNBO and advanced biofuels with appropriate price signals. After this phase, taxation of CO₂-neutral fuels should be aligned with the tax rate applied to electricity. In addition, a component-based taxation approach should be introduced. The BDI rejects national or European fuel taxation for air and maritime transport, as this would inherently create disadvantages for European companies in international competition and lead to carbon leakage. Further incentives for the market ramp-up of renewable fuels in road transport are also needed. In particular, this includes a rapid adaptation of the Eurovignette Directive, implementation of recital 11 of the CO₂ fleet regulation for passenger cars and light commercial vehicles, and targeted support for the deployment of hydrogen vehicles
2.4 Encourage investment in the transformation of the mineral oil industry to strengthen the business location and ensure security of supply
Refineries are a central component of industrial value chains in Germany and Europe, securing the supply of fuels and petroleum products for material use – which will in the future also undergo defossilisation. The mineral oil industry is closely interconnected with other sectors such as chemicals, mechanical and plant engineering, building materials, steel and aluminium production, and the automotive industry – both through the exchange of primary and intermediate products and through shared infrastructure and services. In times of crisis, refineries enable independent production of energy, power and fuels. They therefore make an indispensable contribution to the mobility and supply of the population, the economy and the armed forces, as well as to the functioning of critical infrastructures. Safeguarding domestic energy and fuel production is thus essential not only from an industrial policy perspective, but also from a security policy perspective.
3. Strategic expansion of the STIP: Innovation, sustainable transport, digitalisation, and charging and refuelling infrastructure
The STIP should establish a coherent and holistic framework for investment in the defossilisation of transport. Proposed measures must strengthen coherence with and between existing EU regulations, funds and the EU’s Multiannual Financial Framework, as well as with international organisations. To this end, ETS revenues must also be returned to the contributing sectors, in particular aviation and maritime transport.
Overall, in its current form the STIP does not meet the Commission’s stated ambition of providing a strategic framework for climate protection investments across all modes of transport. This requires either an expansion of the STIP or a comparable package of instruments for sustainable transport
solutions across all modes, as well as for the development of new technologies and the necessary infrastructure.
In order for the STIP to fulfil its role as a strategic framework for all modes of transport, further areas of investment must be included. Beyond efficiency improvements in existing technologies and solutions, this includes harnessing the potential of digitalisation, expanding charging and refuelling infrastructure, and promoting investments in innovative technologies.
Rail transport plays a particular role due to its energy efficiency and climate benefits. The STIP should therefore also support investments to increase rail system capacity. These include the European Rail Traffic Management System (ERTMS), Digital Capacity Management (DCM) and Digital Automatic Coupling (DAK). Moreover, projects to decarbonise rail transport must be taken into account, in order to support the phase-out of diesel-powered rolling stock – whether through conventional line electrification or the deployment of battery and hydrogen trains, including the necessary charging and refuelling infrastructure.
In shipping and aviation, short-term emission reductions require efficiency improvements to existing technologies. At the same time, long-term decarbonisation demands investment in breakthrough technologies today. Support is needed in both areas, for example through the Clean Aviation Joint Undertaking. In aviation, particular priority should be given to research, development and innovation in highly efficient propulsion systems, electrification and hybridisation, collaborative platforms, renewable fuels, and innovative wing and fuselage configurations.
The ramp-up of alternative drive systems in road transport – particularly electromobility – requires the prior, comprehensive and demand-driven deployment of charging and hydrogen refuelling infrastructure for passenger cars and commercial vehicles, including grid connections. The current ambition level of the AFIR, together with existing EU financing instruments, does not ensure the necessary EUwide roll-out. This is especially true for charging and hydrogen refuelling infrastructure for heavy-duty vehicles. Priority must be given to supporting operational charging solutions. The Commission must take this into account when expanding the STIP.
Imprint
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BDI Document Number: D 2183