The European Commission has greenlit a €350 million German initiative to support Concrete Chemicals GmbH in the large-scale production of synthetic aviation fuels. This decision marks a significant stride toward achieving the objectives of the European Green Deal and the ReFuelEU Aviation initiative, promoting sustainable practices within the aviation industry.
Concrete Chemicals GmbH’s project, one of the first of its kind in the EU, focuses on producing “Power-to-liquids” (PtL) kerosene. The innovative process will utilize renewable electricity, hydrogen, and biogenic carbon dioxide captured from a local cement plant. Central to the project’s technology are electrolysers and advanced chemical reactors, including reverse water-gas shift and Fischer-Tropsch synthesis.
The PtL-kerosene generated will be recognized as a renewable fuel of non-biological origin (RFNBO), signifying its energy content arises from renewable sources. In addition to kerosene, the facility will produce 6,500 tonnes of renewable naphtha annually, which can be utilized as feedstock for various plastic products.
Construction of the plant, located in Rüdersdorf, Germany, is expected to contribute significantly to reducing lifecycle greenhouse gas emissions, achieving a remarkable 90% reduction compared to traditional fossil fuels. The facility is slated to commence production in 2028, with an estimated annual output capacity of about 30,000 tonnes of synthetic aviation fuel.
Assessment and approval
The European Commission thoroughly assessed the aid measure under EU State aid regulations, particularly focusing on its compliance with Article 107(3)(c) of the Treaty on the Functioning of the EU. This article allows support for developmental economic activities under specific conditions; the assessment also fell under the Guidelines on State Aid for Climate, Environmental Protection, and Energy (CEEAG).
In its evaluation, the Commission identified several key points:
1. Economic Development Facilitation: The aid significantly promotes synthetic aviation fuel production, aligning with broader EU objectives, including the European Green Deal and ReFuelEU Aviation.
2. Incentive Effect: The funding is deemed essential, as Concrete Chemicals GmbH would not proceed with the substantial investments without this public support.
3. Necessity and Proportionality: The aid is necessary and appropriately tailored to the project’s financing needs, ensuring public funds are used effectively.
4. Competition Safeguards: The project includes provisions to mitigate any undue competition distortion. If the project achieves notable financial success, part of the aid will be returned to Germany through a claw-back mechanism, ensuring responsible financial practices.
5. Positive Impact: The overall benefits of the project, including environmental improvements, are expected to surpass any potential negative effects on competition and trade within the EU.
On these grounds, the Commission concluded that the German measure complies with EU state aid rules and approved it accordingly.
Background and implications
This decision is framed within the context of the European Commission’s 2022 CEEAG, which outlines compatibility guidelines for environmental aid measures. It aligns with the EU’s ambitious targets of achieving net-zero emissions by 2050, a goal interwoven with the legally binding objectives set by the European Climate Law.
The recently adopted ReFuelEU Aviation initiative furthers this mission by ensuring that aviation fuel suppliers provide sustainable alternatives that significantly reduce lifecycle CO2 emissions.
The approval represents not just a vital investment in sustainable aviation fuel technology, but also a clear commitment from the EU to foster innovation and environmental responsibility in the aviation sector, paving the way for a greener future in air travel.
The non-confidential version of the decision will be released under case number SA.106395 once confidentiality matters are addressed.
