On 8 May 2026, the Swedish Government received the final report of its inquiry into promoting the availability of sustainable, fossil-free and low-carbon fuels for aviation and maritime transport in Sweden (the “Report”). 1 The Report sets out a comprehensive action plan to increase domestic production and supply of sustainable aviation fuels (“SAF”) and sustainable maritime fuels (“SMF”), against the backdrop of rapidly increasing EU demand driven by the ReFuelEU Aviation2 and FuelEU Maritime3 regulations and the EU Emissions Trading System (“EU ETS”).
The Report concludes that existing EU production capacity is insufficient to meet the mandated blending targets from the 2030s onwards, creating a dependency on significant imports under current policy settings. This exposes the market to the same type of price volatility and geopolitical risks currently affecting conventional fuel supplies globally as a result of the Middle East conflict. For maritime transport, increased use of LNG, onshore power supply and energy efficiency measures may suffice to meet FuelEU Maritime greenhouse gas intensity targets until around 2035, aided by the regulation’s pooling mechanism. However, the 1% sub-target for renewable fuels of non-biological original (“RFNBO”) that applies from 2030 is unlikely to be met through EU production alone, and the Commission may decide not to apply it if capacity is insufficient, creating material regulatory uncertainty for e-fuel investors.
Sweden is particularly well positioned to contribute to increased EU production. In 2024, for example, Sweden recorded a share of 5.09% of all fuel delivered to Swedish airports, a figure eight times higher than the EU average.4 Such a significant share was partly attributable to Sweden’s early adoption of blending mandates in 2021 and support for voluntary industry programmes. This track record, combined with Sweden’s access to fossil-free and renewable electricity, biomass and biogenic CO₂, and a strong innovation ecosystem, places it as among the most credible candidate jurisdictions for scaling up production of sustainable fuels. The Report recommends that the Swedish Government take a more active role in realising this potential, with the dual objectives of strengthening supply security and capturing industrial opportunities.
The approach adopted following consultation will have direct implications for carbon compliance costs and commercial incentives to produce and use SAF and SMF.
What does the Report propose?
The Report identifies the need for action across the entire production value chain. The key proposals are as follows.
- R&D programme for solid biomass biofuels: The Swedish Energy Agency (Energimyndigheten) should develop a dedicated programme for research, development and demonstration to accelerate commercially viable production of biofuels from solid biomass (e.g. forest residues) for aviation and maritime use. Current bio-SAF production is dominated by used cooking oils and animal fats (the Hydroprocessed Esters and Fatty Acids pathway), but these feedstocks are limited. A broadened feedstock base will be essential from the mid-2030s when blending mandates rise significantly under ReFuelEU Aviation. The Energy Agency should report on its proposed design by March 2027.
- Investment support and green credit guarantees: The Swedish National Debt Office (Riksgälden) should be enabled to resume issuing green credit guarantees as soon as possible. The guarantee programme, effectively paused when the Government did not seek a new mandate from Parliament for 2026, has been instrumental in financing large-scale green industrial investments, including refinery upgrades for renewable fuel production. Swedish support frameworks should be fully harmonised with EU criteria to maximise the inflow of EU funding, including from the Innovation Fund and InvestEU.
- Production-based and risk-sharing support: The Report proposes two complementary mechanisms. First, Sweden should co-finance and participate in a pilot auction for synthetic aviation fuel (“e-SAF”) within the European Commission’s e-SAF Early Movers Coalition, a double-sided auction designed to match producers with buyers and reduce investment risk. Eight Member States have joined, with Germany having committed EUR 2 billion for 2030–2039 and planning its first auction in late 2026 or early 2027. Second, Sweden should prepare a time-limited national risk-sharing mechanism to support bio-SAF and bio-SMF production from solid biomass.
- Stakeholder forum: The Government should establish a forum for dialogue and cooperation, bringing together representatives from across the production value chain, including producers, feedstock suppliers, end-users, transport purchasers, public authorities, academia and total defence agencies, to promote the availability of sustainable fuels for aviation and maritime transport.
- Stable and ambitious EU regulation: Sweden should advocate for long-term stability in EU regulatory frameworks governing sustainable fuels for aviation and maritime transport. In the upcoming reviews of the EU ETS (by July 2026), ReFuelEU Aviation (by January 2027) and FuelEU Maritime (by December 2027), it is essential that existing ambition levels are not lowered. The Report acknowledges, however, that there may be scope to make the legislation more flexible and less administratively burdensome, provided that targets can still be met cost-effectively.
- Electrification and energy efficiency: Sweden should continue to promote electrification and energy efficiency across the transport sector to reduce competition for biofuels. The EU’s CO₂ standards for new road vehicles should remain in place, and the roll-out of onshore power supply infrastructure in ports should be accelerated in line with the Alternative Fuels Infrastructure Regulation.
- International engagement: Sweden should press for the adoption of the International Maritime Organization’s Net-Zero Framework and actively engage within the International Civil Aviation Organization (“ICAO”), including ahead of the Conference on Aviation and Alternative Fuels (CAAF/4) expected by 2028, to strengthen global climate instruments for international aviation. The Report also highlights the importance of Swedish participation in ICAO’s Committee on Aviation Environmental Protection, where rules on eligible SAF feedstocks are under review, with potential implications for Nordic forestry residues.
Key takeaways for market participants
The Report arrives at a time of heightened investor interest in sustainable fuels. Three aspects merit particular attention.
1. Financing and risk-sharing: bridging the investment gap
The Report identifies a fundamental market failure: producers require long-term offtake agreements (10–15 years) to secure project financing, while airlines and shipping companies are reluctant to commit beyond one to two years given price uncertainty. The proposed double-sided auction and national risk-sharing mechanism are designed to bridge this gap by interposing a public intermediary that absorbs volume and price risk. To illustrate the potential scale: the Report estimates that SEK 10 billion could support production of approximately 140,000 tonnes of e-SAF, roughly half of the volume required at Swedish union airports over 2030–2039. For investors and project developers, the proposals would improve the bankability of SAF and SMF production projects in Sweden.
2. Regulatory certainty: the critical variable
The Report notes that demand for sustainable fuels remains primarily policy-driven and identifies regulatory uncertainty as a material barrier to investment. It recommends that Sweden actively oppose any reduction in ambition levels in the forthcoming reviews of the EU ETS, ReFuelEU Aviation, and FuelEU Maritime. For market participants with multi-jurisdictional exposure, the extent to which Member States can sustain a unified position on ambition will be a critical determinant of investment decisions over the next 12–18 months. Sweden’s commitment to preserving existing ambition levels does, however, place it in tension with certain industry stakeholders who are pressing for a deferral of targets in light of the currently elevated costs of production, reinforcing the need for further supply side support arrangements to lower development costs in Sweden.
3. Sweden’s competitive position in the emerging market
The Report positions Sweden as a natural hub for sustainable fuel production, citing its abundant fossil-free electricity, biomass resources and biogenic CO₂. Several large-scale facilities are in the planning or development phase, including projects for bio-SAF from solid biomass, e-SAF and e-methanol. Notably, ReFuelEU Aviation permits “low-carbon synthetic fuels” produced with nuclear-derived electricity to count towards the synthetic fuel sub-quota, whereas FuelEU Maritime requires all e-fuels to qualify as RFNBO (i.e. from renewable power sources only), an asymmetry that may influence investment decisions on siting and energy sourcing. The proposals, if realised, would create a more favourable investment environment and could establish Sweden as a significant exporter of sustainable fuels to the broader European market.
Next steps
The Report will be sent out for public consultation to relevant stakeholders. The Government has not yet indicated a timeline for legislative action, but several proposals, including the resumption of green credit guarantees and the mandate to the Energy Agency, could be implemented relatively quickly. The production-based support mechanisms would require further design work and, in the case of the e-SAF Early Movers Coalition, coordination with the Commission and participating Member States.
While the proposals remain subject to public consultation and further governmental consideration, they signal a clear direction of travel towards increased state involvement in de-risking production investments. This development will be of direct relevance to project developers, infrastructure investors, offtakers and lenders active in the Nordic sustainable fuels market.
1 Ministry of Rural Affairs and Infrastructure, ’Increased Access to Sustainable Aviation and Maritime Fuels’ (DS 2026:11), available here.
2 Regulation (EU) 2023/2405 of the European Parliament and of the Council of 18 October 2023 on ensuring a level playing field for sustainable air transport, available here.
3 Regulation (EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, available here.
4 European Union Aviation Safety Agency, ‘ReFuelEU Aviation Annual Technical Report: 2024 In Review’ (2025), p.113, available here.
White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.
This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
© 2026 White & Case LLP
