eSAF investment Framework

Arup

Stargate Potential for strategic investments into the eSAF supply chain by airports March 2026

Foreword

The purpose of this document is to act as a preliminary guide to airports that have an interest in investing capital in the eSAF supply chain, considering the investment market and airports’ positioning as investors.

The transition to sustainable aviation fuels (SAF), and particularly to eSAF, represents both a significant opportunity and a complex challenge for airports seeking to accelerate the decarbonisation of aviation.

into unfamiliar operational, technological or development territory.

Regardless of the approach, under the right investment conditions, airports could add value by signalling long-term demand, supporting project bankability, and fostering collaboration across the (e)SAF ecosystem, as seen in a handful of examples in the market today.

Potential pathways for airport investment vary by numerous airport-specific considerations, including size, business model, While policy support and regulatory mandates are driving stakeholder relationships, regulatory environments and momentum, the eSAF market remains immature, with high infrastructure arrangements. For larger airports the nature of the The purpose of this document is to provide guidance to airports investment risks and significant barriers to entry. Further to this, jet fuel supply chain limits opportunities for at ‑airport that have an interest in investing capital in the eSAF supply airports’ positioning within the fuel ecosystem, combined with a interventions. Any investment interest may be more relevant chain. It is not comprehensive and does not replace the need for typically lower tolerance for investment risk than most SAF earlier in the supply chain, such as through upstream project-specific analysis. Airports considering investment in the investors, means that clear motivation is required for airports to partnerships or enabling infrastructure. eSAF supply chain should ensure strategic alignment, assess the pursue direct investment rather than lower ‑risk enabling actions risks and opportunities at an airport-specific level to safeguard Smaller or more specialised airports may, under certain such as facilitation, incentives or stakeholder coordination. operational and financial interests, seek out or strengthen conditions, have greater scope and/or motivation for potential partnership opportunities and perform robust due For airports where direct investment in the eSAF supply chain is involvement closer to the point of use, as seen in the example of diligence into investment opportunities. identified as aligning with strategic objectives, risk appetite and Farnborough Airports acting as SAF offtaker. Unique roles to be either current or emerging resources and skillsets, partnership played by smaller, specialised airports may offer valuable Consideration of indirect support actions, including enabling models and blended finance approaches are likely to offer the learnings to larger airports and the investment market more and facilitation measures and incentives, are excluded and are most viable path forward, enabling them to leverage their broadly. covered separately in Stargate’s Catalogue of Airport SAF reputational capital and available capital without overextending Actions, available publicly.

March 26

2

Actions for airports for accelerating SAF uptake

This report explores considerations for airports interested in direct market intervention to accelerate eSAF uptake, as opposed to incentives and enablement (routes more commonly taken by airports).

Airport engagement in accelerating SAF uptake can be broadly categorised into three strategic approaches (presented also opposite):

1

1. Direct Investment: Airports invest capital directly into SAF production, infrastructure, or technology development.

2. Indirect market intervention: Airports support SAF uptake through infrastructure provision, stakeholder convening, and operational integration.

3. Enabling environment: Airports contribute through policy advocacy, stakeholder engagement, and ecosystem development.

This publication focuses on the first category, direct investment, and specifically for eSAF, with the aim of providing key considerations for airports considering engagement in this category. Arup notes that this is the least common form of airport engagement currently observed in the market. Given their low‑margin business models and capital‑intensive balance sheets, airports have traditionally exhibited limited appetite for direct investment in fuel supply, which lies outside their core activities. Further, the SAF market for emerging pathways is still immature, and direct investment thus carries risk. A handful of examples in the European market in this engagement category are described in Section 2.

In contrast, there are many more examples of airports enacting within the second and third categories of engagement, where they can support SAF deployment through incentives, enablement and policy engagement.

These approaches often align better with airports’ existing role in the supply chain and offer lower-risk pathways to impact. Stargate’s Catalogue Of Airport SAF Actions, available publicly, focuses on the second and third categories.

March 26

Direct market intervention

Indirect market intervention

2

3

Enabling environment

Airport-led actions

Direct investment in infrastructure and operational support for SAF production and use, for example in: • SAF production facilities • Blending infrastructure • SAF storage and distribution • Direct offtake • R&D support (including pilot projects)

Financial incentives for SAF use • Book and claim systems • Strategic partnerships

• Data-driven initiatives • Policy advocacy and consultation involvement • Lighthouse airports • PAX engagement • Certification support • Knowledge sharing / stakeholder collaboration

Real world example (SAF/ eSAF)

Example: Groupe ADP (Paris airport operator) invest in SAF technology and production company, LanzaJet

Example: Heathrow Airport incentive programme to cover 50% of additional SAF costs to airlines

Example: Copenhagen Airport as a ‘lighthouse airport’ under the ALIGHT initiative, guiding infrastructure, frameworks and policy development.

Actively shape demand and supply through financial and operational levers

Encourage greater SAF uptake through enabling mechanisms and financial instruments

Create conditions for market growth through policy, awareness, and ecosystem support

•

3

Techno-commercial bankability drivers for eSAF projects

Bankable eSAF projects must demonstrate strong technical foundations, commercial credibility, and strategic alignment. For airports exploring investment, early identification of these traits is essential.

Airports considering direct investment in eSAF production must assess technical, commercial, and strategic factors that ensure credibility and minimise risk. The considerations below focus on eSAF (FT-SPK (PtL) pathway), however many lessons are applicable also to other SAF pathways.

Technical Viability

Commercial Strength

Strategic Alignment

Bankable projects are built on robust technical foundation, supported by rigorous technical design in FEED/front-end loading studies.

They should demonstrate: • Realism | Initial capacity should match the developer’s experience and capabilities and align with reasonable offtake volumes. Potential for upscaling is a plus.

• Deliverability and Strategic Site Selection | Bankable projects have realistic development timelines, contractors with strong reputations and appropriate experience, secured sites in strategic locations, and minimal reliance on third parties. Proximity to renewable energy (or grid connection availability), CO₂ sources, water and infrastructure is a strong advantage.

• Integration into existing supply chain | Physical and system boundaries should be well understood and accounted for in both technical and commercial design, including integration requirements for storage, transport and existing operations.

• Requirements for Certification and Compliance | If the business model depends on selling certified eSAF, the inputs and processes should be aligned with EU regulations and applicable fuel and sustainability standards (e.g. RED III, ReFuelEU, Hydrogen & Gas Decarbonisation Package, ASTM certification).

Bankable projects go beyond technical feasibility. They should also demonstrate: • Secured Offtake | The backbone to a bankable eSAF project is having binding offtake agreements in place with credible buyers, typically fuel distributors or airlines; agreements may be assisted by the EU’s doublesided auction mechanism. Without offtake, investor confidence is hard to secure.

• Reliable and Affordable Feedstock Access | Projects should have secured access to renewable electricity, green hydrogen (unless included in project boundary), and captured CO₂ at competitive prices, noting competition with demand from other use cases. Long-term supply agreements or vertical integration reduce exposure to volatility.

• Robust Risk Management | Risks should be clearly identified and backed by credible mitigation strategies. Transparency and preparedness are signs of a mature development approach.

• Experienced Management and Sound Contractual Strategy | The developer should have a proven track record and a contractual setup that limits risk exposure. Appropriate contractual protections, clearly defined scopes, and strong interface management are all positive indicators.

• Credible and Disciplined Business Plan | Financial models should be evidence-based, with realistic assumptions around feedstock availability, ramp-up timelines, and SAF pricing. Sensitivity analysis should be included, and projections should avoid overly optimistic growth curves.

Bankable eSAF projects are aligned with policy and market trends. They should demonstrate: • Fit with National and Regional Priorities | In addition to the demand-securing mandates from ReFuelEU, alignment with national ambitions helps with receiving grants, subsidies or other mechanisms to bridge the price gap with fossil jet fuel.

• E-Fuel Pathways and Strategic Resilience | The FTSPK (PtL) route, as the only ASTM-approved eSAF pathway currently, can easily dominate investment attention. However, alternative e-fuel pathways such as eMtJ (still awaiting ASTM certification) may offer cost advantages and cross-sector flexibility.

Production pathways with the possibility to target different markets with their end products provide greater strategic resilience to the project.

• Market Competition | With new players entering the market internationally, competitive advantage (e.g. via past experience in technology and/or project development, strategic relationships) is crucial to gain investor confidence.

March 26

4

The appeal of blended finance models

Due to the high capital and risk associated with investments in the eSAF supply chain, blended finance models are a potential route for airports to limit the required scale of investment and risk exposure.

• As investment in the SAF supply chain typically requires large amounts of capital and carries risk, airports considering investment would likely engage in blended finance, combining different sources of capital to accelerate SAF deployment while managing risk across the supply chain.

• For the purposes of explaining the motivations for blended finance models, we can broadly consider investors among the following three categories, as depicted opposite: • Public & Philanthropic Funding: These actors provide early-stage grants or concessional capital to de-risk projects, making them viable for later investment.

They are typically motivated by goals other than financial return, such as regulatory environment, and thus have a higher risk appetite.

• Strategic Investors: Industry participants that invest primarily to support strategic objectives – such as securing supply chains, enabling market development, or advancing decarbonisation – rather than to maximise short ‑ or medium ‑term financial returns. Airports fall within this category.

• Private Equity Investors: Private equity investors typically have higher risk appetite than institutional investors in anticipation of longer‑term value creation and thus often bridge the gap for early-stage developments and/or first-of-a-kind and nth-of-a-kind (FOAK/NOAK) projects.

• Institutional Investors: Invest primarily for risk‑adjusted financial returns and provide the largest pools of capital, typically favouring mature and de ‑risked projects. While eSAF’s risk profile limits participation for many, certain institutions – for example EU‑mandated investment bodies such as the European Investment Bank (EIB) or SFDR-obliged funds – may prioritise eSAF investments despite elevated risk profiles where projects are aligned with EU climate objectives and supporting regulatory frameworks or Article 9 criteria.

March 26

Public & Philanthropic Investors

Low Capital

High Risk

Industry (Strategic) Investors

Medium Capital

Medium Risk

Private Equity Investors

Medium-High Capital

Airports, airlines, OEMS – provide stakeholder endorsement and enable ecosystem development

Low-Medium Risk

Bridging finance for FOAK/NOAK projects

Low Risk

Later-stage capital, scale-up funding

Institutional Investors

High Capital

Early-stage grants, derisking instruments

Intermediary or special purpose vehicle (SPV) eSAF projects Illustration of potential blended finance structure, with descriptions per investor category Source: Arup, World Economic Forum

5

eSAF supply chain investment considerations for airports

Across the supply chain, appealing and challenging aspects exist for airports seeking investment opportunities.

Feedstock providers Renewable H /Energy (RE) Fuel Suppliers & Logistics End User (Offtake) Very limited availability of valid carbon sources beyond 2041 DAC not (yet) commercially viable Far removed from airports in the supply chain Securing long-term supply offers stable input costs

Attractive aspects Unattractive aspects Other points for consideration IRR

Internal Rate of Return

SOI

Scale of Investment

ROIC Return on Investment Capital March 26

2

• Plant location will influence attractiveness • High Capex, lower risk (established technology) Far removed from airports in the supply chain and requires significant land Numerous options for offtake of RE (assuming grid connection possible)

Reasonable industry ROIC estimates of 8-12%[1,2,3] More difficult market to enter; key market participants have strong hold on the market and may not be motivated to collaborate with airports If investing in SAF storage and transportation, its more logical to do this on- or near-site (at the airport)

Fuel Production High scale of investment (estimated c. $6.3 billion per 500kt facility[1]) Low IRR without policy support or concessional finance • Payback horizon: 8-10 years before positive cashflow • Plant location and proximity to airport and/or key infrastructure will influence attractiveness Pilot projects may be an option to signal demand with lower Capex/risk

• Via co-investment or advanced offtake structures, airports could see similar IRR to that of fuel production Unlikely to be appealing to larger airports May be an option for remote airports, depending on business model

Storage and Blending Infrastructure High relevance for airport investment, given airports typically have direct relationships with stakeholders that own or operate this infrastructure (if its not the airports themselves) More opportunities for smaller airports or those with partnership opportunities • SOI: On-site SAF storage and blending infrastructure can range from approximately €10-50 million Operational complexity that is typically outside of airport’s skillset – if owner/operator role is considered Perhaps limited need by existing actors for airport investment, given they’re typically well established in the market 6

eSAF Investors: Required Characteristics

While airports differ from traditional eSAF investors, airports can lend credibility to eSAF projects as coinvestors with their reputational capital as trusted infrastructure operators within the aviation sector.

Airports would benefit from partnerships and collaborative models rather than acting as standalone project leaders or primary investors, since airports do not generally possess the technical or operational capabilities required to lead or significantly de-risk eSAF projects. While airports do have experience in delivering large-scale infrastructure projects, required specialised industrial capabilities related to the various parts of the eSAF supply chain typically lie outside of their domain of expertise. Further, they lack the vertical integration or feedstock control that numerous key players in the SAF supply chain do have.

Category

Beneficial characteristics of an investor

Evaluation for airports (typically)

Corporate

• •

•

• • •

Key characteristics that could improve the suitability of airports as eSAF investors include: • Reputational capital: Particularly for larger airports, airports can lend credibility to eSAF projects as visible, trusted infrastructure operators within the aviation sector. This is particularly valuable in early-stage development and could enhance project bankability or accelerate permitting processes by signalling stakeholder endorsement.

• Strategic motivation: Given investment risk and airport’s typical domain of investments, and that ReFuelEU mandates apply primarily to airlines and fuel suppliers rather than airports, strategic motivation would be required for airports to invest directly as opposed to pursuing other enablement actions.

Regulatory pressure on a national level and reputation are possible motivations; these must be balanced against internal investment criteria such as return and risk levels.

• Airport-specific opportunities: Should an airport have a uniquely strong alignment with the beneficial characteristics set out adjacent in one or more categories, for example significant available land or strong ties to one or more key players in the supply chain, this may present compelling opportunities for exploring investment.

March 26

Financial strength & available capital Investment experience in high-risk, high-capital development projects Influence & reputation Appropriate risk mitigation through contractual and/or blended finance structure Specialised industrial capabilities, e.g. in chemical conversion and processing

Size and business model of airport will be very relevant; large airports often have different constraints and motivations to smaller airports Larger airports: Reputational capital Smaller airports: Sometimes have greater involvement in downstream supply chain Typically target low-risk investments within their core activities

Assets

•

Access to land and/or existing assets relevant to eSAF production

Often constrained or regulated access to land.

Typically limited/no assets relevant to eSAF production

Location

•

Strategic location and/or access to feedstocks and distribution networks

Proximity to aviation fuel demand centres and distribution infrastructure

Existing involvemen t/ relationship s in supply chain

•

Feedstock: Reliable and affordable access to renewable energy and (eligible) CO2 Fuel Production & Midstream: Experience in large capital project delivery, process operations and eSAF technology Downstream: Having existing infrastructure/operations compatible with SAF

Typically limited influence over/involvement in feedstock supply chains; limited/no experience in large-scale chemical, fuel production projects or eSAF technologies and limited operational interface with downstream actors Potential for downstream opportunities at smaller airports with greater ownership/operative involvement in fuel distribution

•

•

Motivation • Commercial (with high-risk tolerance) Capability map for investors in or thestrategic eSAF supply chain • Mandated: i.e. requirement to Source: Arup analysis offtake eSAF or decarbonise aviation

No mandate for airports to offtake eSAF; may be motivation for airports to act as SAF broker where their clients are willing to pay a premium (e.g. private jets) Some airports are impacted by national aviation emission reduction mandates, further to EU policy implications.

7

Approaching investment opportunities in the eSAF supply chain

If direct investment in the eSAF supply chain aligns with an airport’s strategic objectives more than other enablement actions, opportunities and risks should be assessed on a project- and airport-specific basis.

• Any decision by airports to commit significant resources to exploring investments into the eSAF supply chain should be grounded in a clear alignment with the airport’s strategic objectives and investment criteria. Given the complexity and evolving nature of the eSAF market, airports need to carefully evaluate whether direct involvement or alternative approaches, such as enablement and facilitation actions, offer the most effective path to achieving long-term goals while satisfying investment goals and risk appetite.

• The framework presented overleaf is intended to guide the airport in their initial discussions on investing in the eSAF supply chain. Arup recommends considering steps 1-3 presented opposite before considering the investment decision framework and applying a weighting to the rows of the matrix, reflecting priorities of the airport, to reach meaningful initial views.

• Arup notes the following limitations of the investment decision framework presented overleaf: • The framework presents a selection of potential investment opportunities across the supply chain. This is not an exhaustive list and is provided for sake of example.

• The eSAF market is immature and is evolving at this time. All figures are indicative based on industry

March 26

benchmarks and are highly dependent on SAF pathway, scale, location and policy support and incentives. As the SAF market is yet to reach maturity, past ROIC figures may not be indicative of future trends.

• The framework does not highlight specific risk and opportunities for individual airports and individual investment opportunities, nor does it take into account risks and opportunities in relation to available strategic partnerships an airport may have or competition from other investors in the market.

• Based on the above limitations, Arup concludes that the framework is intended to help inform and guide initial discussions only, for airports interested in investing in the eSAF supply chain. For airports investing in pursuing opportunities further, Arup would recommend reaching out to potential targets and/or partnership parties to understand if there is appetite for involving/partnering with an airport as an investor. Following this, adequate due diligence into the investment opportunity would be required.

Step

Description

1

Decide whether direct investment in the SAF supply chain is of strategic interest compared to other support actions by airports, such as enabling actions and incentives

2

Reflect on airport-specific strengths, opportunities and weaknesses, as discussed on the previous page

3

Decide investment priorities and limitations, i.e.

• Acceptable level of risk • Available capital for investment • Required return on investment • Minimum payback period

4

Review supply chain opportunities, with the help of the investment framework overleaf

5

Draw up a list of potential targets and reach out to understand if there’s appetite for involving an airport as an investor

6

Evaluate next steps and in-house skillset for next steps. Consider need for seeking external advice/resources or hiring to expand in-house skillset where gaps are identified.

Steps to approaching investment in the SAF supply chain Source: Arup

8

eSAF Strategic Investment Framework for Airports R&D / Technology

Feedstock Supply

Renewable Energy (RE) / H2

Fuel Producers

Fuel Suppliers & Logistics

Blending/Storage

Offtake

Type of investment

Investment capital

Working capital OR investment capital

Investment capital

Investment capital

Working capital, excluding infrastructure

Investment capital

Working capital

Scale of Investment (SOI) Indicative only

€10k - €10m

€10k - €10m

RE: €50-300m H2: €200-800m

€20m – €2b

€5-10m

Storage: €10-50m Blending: €20-50m

€10-100m

Potential Returns Indicative only

Long-term IP licensing; option value

Stable margins, longterm contracts

Stable margins, longterm contracts

High-volume sales, carbon credit revenue

Service fees, operational margins

Operational margins, infrastructure fees

Sales to airlines, carbon credit revenue

Expected payback period Indicative only

5-10 years

0-5 years

RE: 3-12 years H2: Dependent on policy support

Min. 8-10 years until positive cashflow

Not a relevant metric

5-15 years

Not a relevant metric

Risk: Business Model

Strategic partnerships, joint ventures, grants, licensing, pilots

Vertical integration, offtake agreements

Vertical integration, offtake agreements

Partial equity via blended finance model, direct sales

Contract logistics, fleet ownership

Equity partnership with third-party operator

Co-investment or advanced offtake structures, direct sales

Risk: Technology

Technology already fairly high TRL

DAC is not yet commercially viable

High TRL technology

Varying TRL

Operational complexity (for airports)

Low risk for storage; complexity of blending managed by third party

Varying TRL

Risk: Feedstock

N/A

Availability of valid biogenic carbon is limited

N/A

Feedstock availability is limited and subject to price volatility

N/A

Risk: Regulatory/ market

Strong EU support for innovation; market competition

Large market competition

Demand for green energy and H2 is fairly reliably high

Market has high reliance on regulatory support

Strong competition from existing players

Storage is versatile; blending requires stable regulations

Based on existing mandates, demand in short term is clear

Impact / Importance

Tech leadership, could result in SAF cost reductions; competing with other R&D

Ensures stable supply and price further up the supply chain

Ensures stable supply and price further up the supply chain

Core of the eSAF supply chain

Supports supply chain reliability; help small producers enter market

Enables integration of SAF into existing operations

Commits demand to SAF production

March 26

-

-

-

-

N/A

-

Potential price volatility of feedstock

-

Legend

Appealing (low SOI / high returns / low risk / high impact)

Unappealing (high SOI / low returns / high risk / low impact) 9

Appendices

March 26

10

Key Definitions Term

Definition

eSAF

Renewable SAF (as defined by ‘synthetic SAF’ under ReFuelEU). The only eSAF pathway currently approved by ASTM is Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK), often nicknamed Power to Liquid (PtL). Methanol to Jet via the renewable pathway (eMtJ) is another pathway that is expected to enter the market, pending ASTM approval.

SAF

Sustainable Aviation Fuel (as defined by ReFuelEU). SAF can refer to both the sustainable component or the end-product blended with conventional fossil jet fuel; we are referring to the former in this report, unless explicitly stated otherwise. Further, this report uses SAF as the umbrella term, for both eSAF and bio-based (biofuel) SAF.

Glossary of Terms Abbreviation

Term

Abbreviation

Term

Abbreviation

Term

ASTM

American Society for Testing and Materials

IRR

Internal Return Rate

RFNBO

BAC

Brussels Airport Company

FT-SPK

Fischer-Tropsch Synthetic Paraffinic Kerosene

Renewable Fuel of Non-Biological Origin

ROIC

Return on Invested Capital

Capex

Capital Expenditure

MtJ

Methanol to Jet

RTFO

Renewable Transport Fuel Obligation

DAC

Direct Air Capture

N/A

Not Applicable

SBC

SAF Book and Claim

eMtJ

E-Methanol to Jet

PAX

Passengers

SAF

Sustainable Aviation Fuel

eSAF

Renewable Sustainable Aviation Fuel

PtL

Power to Liquid

SOI

Scale of Investment

FEED

Front-End Engineering Design

R&D

Research and Development

TRL

Technology Readiness Level

HEFA

Hydroprocessed Esters and Fatty Acids

RED III

Renewable Energy Directive III

March 26

11

Source of Information

Reference

Source

[1]

World Economic Forum – Financing Sustainable Aviation Fuels (2025)

[2]

IATA – Aviation Value Chain (2022)

[3]

McKinsey & Company – How the Aviation Industry Could Help Scale SAF Production (2024)

March 26

12

We need you as Stargate ambassador!

Stargate - EU Green Deal www.greendealstargate.eu

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement GA101037053.

Stay tuned and subscribe to our newsletter!