Europe’s dependence on imported aviation fuels is causing real worries in the air travel industry. But this short-term panic could trigger long-term competitive advantage.
The ongoing disruption in the Middle East and continued closure of the Strait of Hormuz is causing Europe to drastically reconsider where we get our energy from and, perhaps more importantly, how we use that energy.
Aviation is one sector that is particularly feeling the squeeze, as the kerosene supply chain is heavily exposed.
In 2025, Europe imported about a third of the jet fuel it consumed, with most of that supply being sourced from the Middle East. The European Commission says that around 40% of current demand is satisfied by imports.
This has triggered talk of flight cancellations in the coming weeks if supplies cannot be resumed.
The International Energy Agency has warned that there is about six weeks of supply left, while the Dutch government said at the beginning of this week that the EU could make strategic reserves and domestic production last five months.
Europe’s refinery capacity has decreased markedly over the last two decades, down by about a quarter since 2009, so there is only limited scope to make up that shortfall by ramping up domestic production.
The European Commission intends to map all of the EU’s existing capacity and coordinate refiners to make sure that they are maximising output and buying more time for alternative supplies to be found or for the geopolitical situation to calm down.
Airlines are already making their summer plans with this in mind. Lufthansa has cut 20,000 European short-haul flights that are now unprofitable for the carrier, while others are increasing ticket prices by around 25%.
Other measures like grounding less fuel-efficient aircraft and offering flight crew bonuses for flying more frugally and saving fuel are also being deployed.
The industry has also asked the EU to suspend the sector’s carbon pricing obligations and withdraw other taxes that are hurting margins that are being wiped out by fuel costs.
Wakeup call
Aviation is now one of the few sectors that is yet to take a big step forward into the 21st century and engage ambitiously with the energy transition that most other parts of the economy have started to embrace.
Other big emitters like road transport and shipping have changed course. Electrification is making serious inroads in the former, while low-carbon fuels like methanol are being seriously courted by the former.
But aviation has not made much of a technological leap or statement of intent. European plane builder Airbus scrapped its electric aircraft programme around the pandemic, while the prospect of pure hydrogen-powered flight is still seen as being at least a decade away.
This crisis though could change that and lead to faster development and production of hydrogen-derived fuels and battery technologies.
At the moment, products known as sustainable aviation fuels (SAFs) are generally produced using biowaste. They work in existing engines but have to be blended with conventional fuels and their sustainability credentials are often difficult to trust.
They don’t do much to cut dependencies on imports, merely switching who you are dependent on. So as far as fuel of the future goes, normal SAF probably isn’t it.
Synthetic versions of SAFs though, could be. These are produced using carbon captured from the atmosphere and hydrogen generated using clean energy. They also work in current engines and under the right conditions can be carbon neutral.
As far as the current crisis goes, their big selling point is that they can be manufactured pretty much anywhere that has a lot of cheap green power, meaning it could be a home-grown European industry.
The EU’s ReFuelEU jet-fuel law contains a mandate for these eSAFs that kicks in in 2030 at a modest 1.2%, but a looming rule change to how hydrogen can be produced might also make it more attractive for industries to ramp up production quicker.
Europe actually leads the world in number of eSAF refineries that are being planned but given that none have yet reached a final investment decision, it may be premature to say that the continent has an oven-ready solution.
More long-term, aviation could also cut out the middle man and instead of using clean power to make fuels, use zero-carbon electricity directly to achieve liftoff by deploying the next-generation of batteries.
Electricity-powered planes are now starting to be certified and batteries are getting lighter with each development cycle. It means that the prospect of small, regional commercial planes is no longer wishful thinking.
Even more realistically, manufacturers are now seriously considering electrified aircraft, which would incorporate hybrid elements in conjunction with conventional turbo prop engines, greatly improving efficiency and reducing fuel demand.
Many of these innovations need funding to scale quicker, which carbon pricing – a policy that airlines do not want to see expanded to cover all flights, indeed they want it suspended during this crisis – actually helps to provide.
This summer’s travel plans could well be disrupted, although early signs do seem to indicate that there is nothing to start panicking about. Longer-term though, 2026 could be looked back on as the year that aviation took its next big leap forward.
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