H2 Talk - €100Billion for Green Fuels: What STIP means for Aviation & Shipping, 29 January 2026

Name: H2 Talk - €100Billion for Green Fuels: What STIP means for Aviation & Shipping, 29 January 2026
Uploaded: 2026-01-30T10:08:32.000Z
Duration: 3 h 2 min 27 s

Hydrogen Talk: 100 Billion Euro for Green Fuels

Introduction to the Discussion

The talk begins with a welcome message and an introduction to the topic of sustainable transport, specifically focusing on a €100 billion investment plan for green fuels.

Yorgati Makakeis, CEO of Hydrogen Europe, introduces the Sustainable Transport Investment Plan (STIP) presented by the European Commission aimed at accelerating energy transition in aviation and maritime sectors.

Overview of the Sustainable Transport Investment Plan (STIP)

The STIP is highlighted as crucial for innovation in aviation and shipping, with significant financial mobilization expected from the US until 2027.

Key components include a €500 million budget for synthetic aviation fuel projects and €2 billion allocated through Invest EU to bridge financial gaps in sustainable alternative fuels.

Funding Mechanisms and Support Initiatives

The European Commission plans to allocate €300 million by year-end to support hydrogen production for sustainable aviation and maritime fuels via the European Hydrogen Bank.

Horizon Europe will contribute €133 million towards research and innovation projects related to clean hydrogen partnerships.

Connection to Broader Sustainability Legislation

Discussion on how STIP connects with broader sustainability legislation like ETS reform, emphasizing risk reduction strategies for producers and off-takers.

Mention of an early movers coalition utilizing a double-sided auction model inspired by Germany's H2 Global initiative.

Insights from Janet Bayur's Address

Janet Bayur emphasizes the importance of financing solutions for decarbonizing aviation and maritime sectors during her address at the webinar.

She shares insights from her visit to Power to X in Rotterdam, which aims to produce sustainable aviation fuel with significantly lower CO2 emissions compared to conventional fuels.

Challenges in Investment Decisions

Bayur notes that businesses are hesitant due to upcoming EU reviews affecting long-term commitments required for projects like Power 2X.

She stresses that clarity on production mandates, targets, and incentives is essential for scaling up hydrogen availability by 2030.

Role of STIP in De-risking Investments

The STIP aims at producing 20 million tons of renewable low-carbon fuels by 2035, which is vital for attracting private investments necessary for decarbonization efforts.

An intermediary mechanism introduced within STIP connects fuel producers with buyers, providing revenue certainty that enhances investment stability.

Decarbonization and Job Creation in Europe

Overview of Economic Impact

The decarbonization efforts in Europe are linked to job creation, particularly in the shipping sector, which supports over 3,000 jobs in the Netherlands alone and generates more than €94 billion annually.

The aviation sector contributes significantly as well, providing an additional 100,000 jobs and accounting for approximately 3.5% of the GDP.

Initiatives for Sustainable Fuels

The Netherlands is part of the ESAF Early Movers Coalition alongside seven other member states focused on scaling up sustainable aviation fuel (SAF) production.

Financial tools such as STIP Instruments, Invest EU, the European Hydrogen Bank, and the Innovation Fund aim to de-risk investments and accelerate sustainable fuel deployment across maritime and aviation sectors.

Challenges in Fuel Production Uptake

Gaps Identified by Experts

Jan Kristoff Uchin emphasizes a critical gap between fuel production capabilities and market uptake needs within Europe.

Current mandates for refueling aviation and maritime sectors are deemed insufficient to stimulate necessary production levels.

Investment Certainty Issues

There is a lack of sufficient drivers for market uptake; existing contracts between buyers and producers of SAF are not robust enough.

A significant number of production projects exist within the EU but face challenges due to uncertainty surrounding final investment decisions.

Proposed Solutions for Market Engagement

Enhancing Investment Confidence

Uchin suggests that creating certainty around investment returns is crucial to avoid stranded investments in sustainable fuels.

The double-sided auction system proposed under STIP could help balance long-term investment needs with short-term demands from airlines.

Member State Contributions

Reliance on member state funding is highlighted as essential for kickstarting production initiatives; limited EU funds have been allocated thus far.

Flexibility in Aviation Fuel Systems

Need for Adaptable Framework

A call is made for a more flexible system specifically tailored for aviation fuels compared to maritime fuels.

Discussion around implementing a "book and claim" system aims to support startups entering the alternative fuels market by enhancing competitiveness.

Broader Access to SAF Allowances

Uchin advocates broadening access to SAF allowances beyond current limits set at 20 million, suggesting that this would better facilitate market engagement.

Maritime Sector and Synthetic Fuels: Opportunities and Challenges

The Role of Synthetic Fuels in Maritime Decarbonization

Discussion on the potential for synthetic aviation fuel and maritime fuel projects to kickstart industry growth, with a focus on the allocation of funds (150 million for aviation, 300 million for maritime).

Emphasis on the need for collaboration between fuel producers, shippers, and the aviation industry to meet decarbonization targets.

Acknowledgment of an upcoming revision of maritime fuel targets; a strong stance against lowering these targets is expressed.

Urgency highlighted regarding investment decisions necessary to meet production capacity and fulfill decarbonization goals.

Importance of maintaining clear expectations for investors by adhering to established targets without dilution.

Flexibility in Regulatory Mechanisms

Inquiry into potential changes in regulatory mechanisms that could provide more flexibility within the European Green Deal framework.

Recognition of differing teams working on regulations leading to inconsistencies; a call for harmonizing good ideas across sectors (aviation vs. maritime).

Need for implementing SAF allowances in maritime similar to those in aviation; learning from each sector's strengths is encouraged.

Discussion about the long-awaited proposal for a book-and-claim system, which has support from both industry stakeholders and environmental organizations.

Consideration of double-sided auction systems as effective tools if proven successful in one sector can be adapted for another.

Addressing Budget Constraints and Alternative Systems

Mention of alternative funding mechanisms like contracts for difference (CFD), should double-sided auctions not materialize effectively due to budget constraints among member states.

Preference expressed towards double-sided auction systems but acknowledgment that immediate action is critical regardless of method chosen.

Urgency reiterated regarding timely implementation of solutions to avoid missing decarbonization targets.

Two-Speed Europe: Challenges and Perspectives

Concerns About a Two-Speed Europe

The discussion raises concerns about the emergence of a two-speed Europe, particularly in relation to early movers like the Netherlands and Germany's financial contributions to sustainable initiatives.

Questions are posed regarding whether this division is evident in discussions within the European Parliament, highlighting that only a few member states are actively engaged.

Current State of Electrification

The speaker notes an existing two-speed dynamic in the electrification of the automotive sector between Central-Western and Eastern European countries, indicating varied approaches and speeds.

Despite these challenges, there is optimism for progress as some countries take initiative; however, caution is advised regarding potential disparities.

Importance of Book and Claim System

Emphasis is placed on the need for a book and claim system to utilize fuels produced in specific regions effectively. The Netherlands' Rotterdam port is highlighted as a key energy hub.

Acknowledgment that while the European Commission has initiated a study on this system, its completion by 2028 may be too late for timely implementation.

Criticism of Slow Progress

Reference to German Chancellor Frizz’s criticism regarding slow developments in Europe suggests that such delays could become bottlenecks for progress.

The urgency for acceleration from the European Commission is underscored as stakeholders await further discussions on this topic.

Introduction to Panel Discussion

Transitioning into a panel discussion featuring experts from various sectors including maritime transport and aviation, focusing on sustainable fuel production.

Participants include heads of units from the European Commission and directors from organizations involved in synthetic fuels and hydrogen regulation.

Sustainable Transport Investment Plan Insights

Anika Cron discusses motivations behind launching the Sustainable Transport Investment Plan (TIP), emphasizing its role in supporting EU transport decarbonization goals.

Highlights that without rapid decarbonization efforts within transport, EU targets for 2030 and 2040 cannot be met; stresses that proposed regulations represent significant industrial shifts rather than typical regulatory changes.

Transitioning to Sustainable Fuels in Aviation and Maritime

Overview of Challenges in Fuel Transition

The transition from fossil fuels in maritime and aviation sectors requires significant investments, estimated in billions, for infrastructure, technology, and fuel.

A comprehensive assessment of current tools and future possibilities is essential to achieve sustainability goals; this includes ongoing negotiations on financial frameworks and revisions to emissions trading systems (ETS).

Strategic Energy Independence

Ensuring Europe's strategic energy independence is a critical aspect of the transition, necessitating firm follow-up on over 30 actions outlined in the sustainable energy plan (STEP).

Insights from Eddie Leo on EU SAF Mandate

Eddie Leo discusses his role as head of the aviation policy unit and emphasizes the importance of promoting a competitive and sustainable European aviation market.

He reflects on lessons learned from the EU Sustainable Aviation Fuel (SAF) mandate and refuel legislation implemented over the past year.

Market Forecast for SAF

Despite initial challenges, there are positive indicators for meeting SAF targets; projections suggest that by 2025, airlines will exceed the 2% target set by regulations.

Current projects indicate that achieving a second target of 36% by 2030 is feasible based on existing initiatives.

Challenges Ahead

Key challenges include reaching final investment decisions (FID) for synthetic fuels; no projects have achieved this milestone yet.

Price transparency remains a concern among airlines regarding how SAF prices are calculated; clarity is needed to foster trust within the industry.

The origin of feedstock used for SAF poses another challenge, with most currently sourced outside the EU.

Project Developments and Financial Insights

Coalition for Synthetic Fuels

A coalition of eight member states has committed to funding projects focused on synthetic fuels, indicating a collaborative effort towards sustainable energy solutions.

North Sea Summit Highlights

The speaker expresses optimism about the early completion of a study discussed at the North Sea summit in Hamburg, where key ministers were present.

Commitment from Ministers

Discussions with ministers reveal their commitment to implementing plans in the North Sea, which could lead to significant production of hydrogen as a feedstock within Europe.

Personal Involvement Acknowledged

The speaker acknowledges personal contributions that have been crucial for the success of the Early Movers Alliance, emphasizing teamwork in achieving project goals.

Financial Challenges in Project Pipeline

Despite having 50 projects in the pipeline, none have reached Final Investment Decision (FID), prompting a discussion on financial barriers and investor hesitance.

Understanding Financial Bottlenecks

Introduction to Mahesh Roy

Mahesh Roy is introduced as an expert from the Green Finance Institute (GFI), focusing on unlocking private capital for sustainable aviation and other green initiatives.

Focus on Investment Decisions

GFI's primary goal over the next 12 to 18 months is facilitating projects reaching final investment decisions across Europe and the UK.

Revenue Certainty Mechanism

The GFI has been involved in designing revenue certainty mechanisms aimed at enhancing financial stability for green projects within both jurisdictions.

Optimism Amidst Challenges

There is optimism regarding project activity leading up to FID; however, many projects are still considered high-risk ventures requiring substantial investments akin to infrastructure levels.

Market Dynamics and Future Outlook

While there’s interest from institutional investors driven by demand signals, uncertainty remains due to slow engagement from mandated parties. The future leadership role of Europe in this sector hinges on overcoming these challenges.

Challenges in Forecasting Future Prices and Production Costs

Importance of Long-Term Offtake Agreements

The unpredictability of future prices and production costs complicates long-term offtake agreements, which are essential for securing commercial project finance for large-scale projects.

Revenue support mechanisms, such as double-sided auctions in the EU and revenue certainty mechanisms in the UK, are crucial to balance financial risks.

Differences Between Aviation/Maritime and Traditional Energy Offtakers

Unlike traditional energy markets with established price indices, aviation and maritime sectors lack similar frameworks, making it difficult to predict pricing for sustainable aviation fuel (SAF).

Aviation and maritime offtakers typically do not engage in long-term multi-year agreements required by producers, creating a new challenge for financing.

Creditworthiness and Price Uncertainty Issues

Many potential offtakers may not have sufficient creditworthiness to secure financing from banks due to inherent price uncertainties.

The transition towards net-zero emissions is hindered by current cost structures and disruptions within these industries.

Investment Needs and Policy Stability

Role of Public Support

While public investment is necessary, the focus should be on the type of support provided rather than just the amount; ongoing policy stability is critical for investor confidence.

Demand Signals from Mandates

Regulatory mandates create demand signals that stimulate investment in ESAP development across Europe, essential for meeting 2030 volume requirements.

Mechanisms to Drive Investment

Importance of Double-Sided Auctions

Pilot auctions can unlock final investment decisions (FID) for leading projects in the EU, reinforcing market confidence in SAF availability under existing mandates.

Public Procurement's Role

The public sector can drive market growth through procurement strategies while addressing project delivery risks associated with first-of-a-kind technologies.

De-risking First-of-a-Kind Projects

Involvement of Financial Institutions

Organizations like export credit agencies and development banks play a vital role in de-risking investments needed for innovative projects that lack mature technology guarantees.

Transition Towards Private Sector Confidence

As projects progress towards maturity by the end of this decade, private sector involvement will increase as risks diminish.

Overview of Clean Fuels and Technology Challenges

Introduction to TOPSO and Current Role

The speaker introduces a representative from TOPSO, who joined the company in 1989 and has experience in engineering technology management, marketing, strategy, and currently serves as the product line director for clean fuels and chemical technology.

Bottlenecks in eFuel Projects

A question is posed regarding the main bottlenecks preventing eFuel projects from reaching Final Investment Decision (FID), including access to finance, electricity costs, regulatory uncertainty, and offtake risks.

The discussion shifts towards sustainable aviation fuel (SAF), highlighting Denmark's role as a global player in developing technologies for this sector.

Development of Technology Blocks

The speaker emphasizes that TOPSO develops "technology blocks" for various applications, including SAF. They have been investing heavily in efficient technologies over their 80-year history.

Importance of Regulatory Certainty

There is excitement about regulatory mandates that provide certainty essential for investment. The STIP program is mentioned as a tool to reduce uncertainties and improve price transparency between supply and offtake.

Cost Reduction Strategies

To lower production costs of renewable fuels like ESAF (Electro-Synthetic Aviation Fuel), scaling renewable energy sources and electrolysis for green hydrogen production is crucial since it constitutes a significant portion of production costs.

Engaging the Entire Value Chain

Emphasizes the need for collaboration across the entire value chain—from technology suppliers to producers—to rapidly develop new products in this emerging market.

Differences Between Maritime and Aviation Decarbonization

Industry Perspectives on Decarbonization Needs

The speaker notes that while there are strong incentives for producing sustainable aviation fuel due to EU mandates, maritime decarbonization faces more challenges with fewer clear initiatives following recent postponements of agreements like IMO's net-zero target.

Transitioning Challenges in Maritime Sector

It’s highlighted that maritime transport lacks clear demand signals compared to aviation. This ambiguity complicates efforts toward achieving decarbonization targets within the sector.

Funding Requirements for Renewable Fuels

Financial Estimates by European Commission

Olivia Infantis Morales discusses estimated investments needed—around €57 billion for aviation and €35 billion for maritime transport—to produce approximately 20 million tons of renewable fuels by 2035.

Public Funding Tools Assessment

Despite available public funding tools aimed at supporting e-fuels development, questions arise regarding their sufficiency given past experiences with these funds.

Demand Signals Necessity

Olivia stresses that a clear demand signal from the maritime sector is critical; without it, fuel suppliers struggle to meet targets effectively.

Maritime Sector's Path to Decarbonization

Current Challenges in Maritime Decarbonization

The International Maritime Organization (IMO) and the net-zero framework are crucial for global maritime decarbonization, but recent postponements have created uncertainty about future actions.

There is a commitment to develop low-carbon fuels, particularly hydrogen (H2), yet significant barriers remain regarding production and implementation of these mandates.

Key Barriers to Hydrogen Production

Renewable energy sources are essential to meet Renewable Fuel Obligation (RFO) targets; however, their availability is limited by infrastructure constraints like power connections to transmission grids.

High costs associated with electricity supply impact the feasibility of hydrogen production. This includes not just the cost of electricity but also regulatory and ancillary service fees.

Technological risks exist in scaling up electrolyzer capacity. Large-scale plants are necessary for reducing Levelized Cost of Hydrogen (LCOH), which introduces commissioning risks.

Ammonia as an Alternative Fuel

Ammonia has been produced for over a century, making it a more straightforward option for maritime fuel compared to newer technologies like e-fuels used in aviation.

Storage solutions at ports must be developed alongside ammonia supply chains to ensure effective bunkering operations.

Comprehensive Project Development Approach

A holistic view of the entire value chain is critical when developing projects in the maritime sector; this includes identifying and addressing all potential challenges.

Certification processes are being actively worked on in Europe, which will influence both domestic production and imports under European Commission regulations.

Future Directions and Support Mechanisms

A global approach is necessary to tackle various barriers before final investment decisions (FID). Projects need comprehensive support mechanisms to succeed.

Early mover projects should serve as models for future developments across Europe, ensuring they possess all required resources for viability.

Next Steps in Auction Mechanism Implementation

Questions arise regarding unused funds from member states' auctions—whether they can be reinvested into subsequent rounds or scaled-up production efforts.

Clarity on next steps towards successful auction implementation is needed by 2026, including discussions around contract types such as contracts for difference versus double-sided auctions.

Discussion on Double-Sided Auctions and National Funding

Overview of the Proposal

The speaker advocates for moving forward with double-sided auctions, emphasizing Germany's readiness to invest national funds.

Highlights the need to reconcile long-term commitments from producers (10-15 years) with short-term commitments from off-takers (1-2 years), suggesting that double-sided auctions can bridge this gap.

Coalition of Member States

A coalition of eight member states is formed, with two committed to funding in 2026; discussions are ongoing about a two-step approach focusing initially on Germany and Luxembourg.

The remaining six member states will be kept in dialogue to potentially join the first wave of projects or participate in future auctions.

Regulatory Considerations

Close contact is maintained with DG Competition regarding state aid clearance for national funding, indicating a positive attitude from regulatory colleagues.

Market consultations will identify mature projects eligible for the first auction, ensuring readiness before launching calls for production side participation.

Future Mechanisms and Fund Allocation

Discussion includes plans for an EU mechanism using EU funds to mitigate risks associated with double-sided auctions while acknowledging current national fund initiatives.

Recommendations were made for member states to reassess unused funds under the RRF by 2025, although there has been little action reported on reallocating these funds.

Challenges in Maritime Fuel Development

Impact of Political Decisions

The discussion shifts towards maritime fuel development, noting setbacks caused by political pressures during Donald Trump's presidency against sustainable fuels within the IMO framework.

Potential Coalitions and Mechanisms

Inquiry into whether a coalition similar to aviation could support sustainable maritime fuels; consideration of market intermediaries as beneficial tools for achieving fuel EU targets.

Competitive Mechanisms in Maritime Fuels

An intermediary mechanism is deemed useful compared to contracts for difference due to its competitive nature on both sides, promoting better public funding utilization.

Ongoing Discussions and Research Initiatives

Engagement with H2 Global regarding various fuel options indicates active exploration into maritime fuel use cases; findings expected by February will inform further discussions with member states.

Regulatory Certainty and Future Directions

Assurance provided that there are no intentions to revise existing targets within maritime regulations until at least 2027 due to unresolved IMO frameworks.

Emphasis on compliance markets as an interesting development that could incentivize e-fuels uptake in maritime sectors.

Maritime Compliance and Market Mechanisms

Selling Over-Compliance in the Maritime Sector

The discussion emphasizes the potential for vessels that exceed compliance standards to be marketed to other ships, with providers like Beta Sea and Ocean Score facilitating this process.

Small and medium enterprises are encouraged to explore options that allow them to recoup investments through compliance credits, functioning as a "book and claim" system.

Regulatory Clarity and Market Uptake

There is an acknowledgment of the need for clarity regarding regulatory expectations, particularly in response to International Maritime Organization (IMO) developments.

The flexibility of selling credits is highlighted as a beneficial mechanism for enhancing market uptake within maritime compliance.

Double-Sided Auctions: A Viable Instrument?

The conversation shifts towards double-sided auctions as a tool for achieving Final Investment Decisions (FIDs), with questions raised about their effectiveness in scaling initial projects.

Olivia points out that while aviation has clear mandates, maritime regulations lack similar clarity but still incentivize clean fuel adoption.

Implementation Considerations for Auctions

Concerns are raised about ensuring selected projects under double-sided auctions can realistically materialize; they must have necessary infrastructure such as power network connections and port terminals.

Past experiences with existing mechanisms should inform improvements in future implementations of auction systems.

Importance of Harmonization Across EU Member States

Sandra stresses the significance of harmonized mechanisms at the EU level rather than fragmented approaches across member states, especially concerning bankable projects.

Emphasis is placed on focusing resources on mature projects to avoid dilution of funding across too many initiatives, which could hinder competitiveness globally.

Role of Green Finance Institute

Mahesh discusses the Green Finance Institute's involvement in supporting systemic feedback from industry stakeholders regarding double-sided auctions, indicating its advocacy role within project development.

Discussion on Double-Sided Auctions and Investment Mechanisms

Overview of Auction Mechanisms

The discussion reflects the concerns from the Sky Power cohort regarding the effectiveness of different auction mechanisms, particularly comparing contracts for difference (CfDs) with double-sided auctions.

It is noted that there is no perfect mechanism; both options have their advantages and disadvantages, leading to a decision by member states to favor double-sided auctions.

Design Considerations for Auctions

Emphasis is placed on the importance of design in auction mechanisms, aiming to support mature projects and facilitate final investment decisions quickly. This is crucial for attracting investment into ongoing projects.

The focus will also be on how quickly member states can mobilize funds effectively while ensuring they stretch as far as possible to support various projects.

Capitalization and Project Bankability

There are significant discussions around how the facility will be capitalized and its relation to a sequence of auctions within broader European Commission funding frameworks. Efficient use of capital is essential for maximizing project bankability.

Unlike other existing double-sided auction mechanisms, this one aims specifically at supporting project finance in capital-intensive sectors, highlighting the need for careful trade-offs in funding allocation.

Future Prospects and Implementation Challenges

The conversation acknowledges that while double-sided auctions can work effectively, their success depends heavily on clear intentions behind their design and capitalization strategies aimed at enabling projects to reach final investment decisions efficiently.

Constructive conversations are ongoing about implementing these mechanisms successfully, with anticipation surrounding upcoming pilot auctions and potential learnings from them.

Closing Remarks and Upcoming Events

Acknowledgment of Mahesh's role in facilitating progress within this complex process was made during closing remarks, emphasizing the importance of early investments in energy independence amid geopolitical challenges.

An announcement was made regarding an upcoming H2 talk scheduled for February 25th focused on whether new proposals could enhance hydrogen infrastructure development further. Additionally, details about the European Hydrogen Week event were shared, encouraging participation before early bird rates expire on March 1st.