For: a Sustainable Aviation Fuel (SAF) producer
August – October 2024]
A Sustainable Aviation Fuel (SAF) producer focused on the Netherlands, asked studio Gear Up to assist them in identifying their obligations under the EU Emissions Trading System (ETS) and the Dutch national CO2 taxation scheme.
For this analysis, studio Gear Up assessed the (future) participation requirements of the SAF producer under EU ETS based on their production set-up.
Volume of ETS 1 emissions
We calculated the volume of emissions that would fall under the scope of ETS 1 on basis of the fuels used at the site. Based on benchmark values established by the European Commission, we estimated how many free allowances the SAF producer may receive, and how this would develop over time. We also assessed how other legislation could impact this free allowance allocation, such as the Carbon Border Adjustment Mechanism (CBAM). Together, this leads to an understanding of how many allowances the SAF producer would have to buy in the market.
Dutch national carbon tax scheme explained
Also, we explained the Dutch national carbon tax scheme which will apply to all EU ETS obligated installations in the Netherlands. This scheme works alongside the EU ETS and includes specific rules, such that a part of the emissions may be subjected to additional taxes; and the applicable volumes and costs may change over time. We estimated what this could mean for the cost that the SAF producer can expect from these combined carbon pricing schemes, under the current ruleset.