This lot covers the purchase side (HPA) of eSAF in the €900m pilot tender.
Electricity-based synthetic aviation fuel (eSAF) is produced from hydrogen and CO2 using proven methods like Fischer-Tropsch synthesis. This process significantly reduces CO2 emissions compared to conventional kerosene, as it contains no harmful sulfur and is nearly climate neutral. International aviation is projected to require increasing amounts of synthetic fuels by 2040. To make this happen, eSAF must be distributed so it can be used at various locations, including major airports worldwide, both directly from production sites and via existing infrastructure. However, the eSAF market remains at a very early stage of development.
| Aromatics: | max. 25 vol% |
| Sulphur: | max. 0.30 wt% |
| Naphthalene: | max. 3.0 volumetric% |
| Particulate Contamination: | max. 1 mg/l |
In addition to the above-mentioned technical specifications, the product must comply with additional product specifications pertaining to the renewable and emissions savings characteristics of the product. They are based on the RED II and the Delegated Acts (2023/1184 and 2023/1185) and fulfil the requirements set in the grant decision and additional instructions given by the provider of funds, BMWK.
They include the following criteria:
Find out here about the range of tools we use in our pilot tender to ensure that climate protection goes hand in hand with environmental and social sustainability.
The hydrogen derivatives in the pilot tender – renewable ammonia, renewable methanol, and eSAF – were selected by BMWK, based on a market analysis and a market consultation carried out in 2021.
The products auctioned in future tenders may vary according to the individual objectives of the respective funding bodies.
The provider of the funds determines the conditions under which Hintco receives financial support to offset the expected cost difference arising from its trading activities. These conditions are outlined in a grant agreement, specifying key parameters such as the hydrogen's "color" classification (or other criteria for defining clean hydrogen), the geographic focus, and any potential additional requirements.
The H2Global mechanism, along with Hintco, is designed to be highly flexible and adaptable - remaining "color-agnostic" in its approach. However, all terms and conditions must align with H2Global’s overarching commitment to promoting environmental and social sustainability while contributing to global climate action.
Short-term contracts on the demand side play a key role in ensuring the efficient use of concessional (governmental) funding, while fostering price transparency and market liquidity. For this reason, many lots in the current H2Global auctions will feature one-year Hydrogen Sales Agreements (HSAs). These short-term agreements are essential to establish H2Global reference prices and indexes, laying the groundwork for a more mature hydrogen market.
At the same time, some off-takers, particularly in certain sectors, may require volume security over a longer horizon but struggle with fixed-price exposures. To address these needs, the H2Global mechanism is exploring models that allow Hintco to enter into longer-term sales agreements by adding additional layers to the existing structure. Detailed concepts for such models are already being developed and foreseen for upcoming tender designs.