Stranded Molecules: Why US SAF Can't Cross the Atlantic to Fill Europe's Mandate Gap

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May 06, 2026

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(SAF Path) The trans-Atlantic SAF trade Europe was counting on isn't price-blocked, ship-blocked, or supply-blocked. It's certification-blocked. -- The trans-Atlantic SAF trade that policy modelers assumed would balance the system, US molecules flowing east into a structurally short EU market, is not materializing at the volume or pace required. The bottleneck is not price, not shipping, and not production capacity. It is regulatory fit. RefuelEU Aviation, anchored in RED III’s Annex IX feedstock list and ILUC framework, is incompatible with the dominant 45Z-qualifying pathways and feedstocks in the United States. The result is a parallel-supply architecture that closes the safety valve in Europe’s mandate.

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US producers are now redesigning hardware to work around it.

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... even if 45Z economics stabilize and US capacity scales on schedule, why won’t those molecules cross the Atlantic to fill the structural gap in Europe’s mandate? The answer is a five-hurdle certification chokepoint and a trade-defense overlay that together render most US SAF stranded for European compliance purposes.

How Big Is Europe’s Mandate Gap?

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European obligated parties are already heavily import-dependent.

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What Does US SAF Capacity Actually Look Like in 2026?

The US side of the equation is the opposite story. EIA’s 2025 update placed operational US HEFA-only SAF capacity at the start of 2026 at roughly 30,000 b/d, with a 2026 SAF production forecast of plus 20 percent year on year. Confirmed HEFA expansions include Diamond Green Diesel Port Arthur (15,000 b/d, Q4 2024), Phillips 66 Rodeo (10,000 b/d, completed Q3 2024 and paused Q4 2024), New Rise Reno (3,000 b/d, February 2025), and Par Pacific Kapolei (2,000 b/d, second half 2025). Montana Renewables is ramping to 150 MMgy SAF in Q2 2026 and approximately 300 MMgy at full plant under a US Department of Energy Loan Programs Office guarantee of USD 1.67 billion that closed in January 2025.

The announced US HEFA pipeline by 2030 reaches 5.1 Mt or 1.7 Bgal. The ATJ pipeline is even larger at 4.8 Mt per year across 34 projects globally, anchored by LanzaJet’s Freedom Pines facility in Soperton, Georgia, which produced its first commercial ETJ output in November 2025. On paper, the molecules exist. The feedstock pool that supports them is another matter. Stillwater Associates noted in 2025 that US biofuel production capacity already exceeds 2024 domestic feedstock supply by 87 percent, with roughly 70 percent of UCO supply import-dependent and roughly 30 percent of total lipid feedstock imported.

Why Can’t a 45Z-Qualified Molecule Just Be Sold Into Europe?

A US batch of SAF must clear three independent regulatory hurdles to count toward an EU obligation, and most fail at hurdle two.

Hurdle 1: ASTM technical qualification

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Hurdle 2: Sustainability scheme certification, regime-specific

This is where the trans-Atlantic flow breaks. ICAO has approved three Sustainability Certification Schemes for CORSIA Eligible Fuels: ISCC, RSB, and ClassNK. The EU recognizes a different (overlapping but not identical) list of voluntary schemes against RED III for RefuelEU compliance, principally ISCC EU and RSB EU RED. A US producer holding ISCC CORSIA certification is CORSIA-compliant. It is not, by that fact alone, RefuelEU-compliant.

To count toward an EU obligation, the molecule’s chain of custody must be audited under an ISCC EU or RSB EU RED certificate, with separate Proof of Sustainability documentation issued at each step in the supply chain. ISCC and RSB recognize each other’s certificates within scheme equivalents (ISCC CORSIA aligns with RSB CORSIA). They do not make CORSIA certification equivalent to EU RED certification. The two regimes share auditors and infrastructure but not legal force.

Hurdle 3: Feedstock and ILUC eligibility

This is the regime mismatch that strands most US output. RefuelEU Aviation goes beyond RED III by excluding food and feed crops, palm and soy derivatives, intermediate crops, palm fatty acid distillate, and soap stocks from counting toward SAF targets, even where the underlying RED III sustainability criteria are satisfied.

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That leaves US HEFA from used cooking oil, tallow, and distillers corn oil as the only meaningfully exportable pathway under both regimes.

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Hurdle 4: Mass balance and double-counting

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Hurdle 5: Trade defense overlay

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US, Canadian, Argentinian, and Indonesian SAF was explicitly included in the import-monitoring framework “to prevent tariff evasion.”

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What Are US Producers Actually Doing About It?

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Re-engineer the plant.

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Sell the credit, not the molecule.

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Litigate.

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What Have European Buyers Done in Response?

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SkyNRG’s 2025 open letter calling for five EU policy interventions to derisk e-SAF flagged that no commercial EU e-SAF facility has reached financial investment decision. The eFuel Alliance has argued for raising the 2030 e-fuels share to at least 5 percent and emphasized that e-fuels can be imported globally, an implicit argument for harmonized cross-border certification. The EU has already signaled it will not enforce the 2030 e-SAF sub-mandate, which removes a stick but not the underlying volume problem.

What Would Actually Open the Trans-Atlantic Channel?

Seven things would, individually or in combination, change the picture.

Mutual scheme recognition. A formal EU acknowledgement that ISCC CORSIA and RSB CORSIA chain-of-custody certification satisfies RefuelEU’s RED III–derived sustainability criteria for shared pathways and feedstocks. ICAO’s STIP gestured at “dual conformance” but produced no binding rule.
CORSIA-CEF expansion. Updated ICAO default LCA values, approved by Council on 19 November 2025, plus broader CORSIA Eligible Fuels feedstock recognition could narrow but not eliminate the gap. The EU’s exclusions go beyond CORSIA’s.
Operational Proof of Compliance. ISCC and RSB are designing a PoC mechanism so a single batch’s documentation can serve both EU and CORSIA claims. Not yet live.
EU ETS and book-and-claim recognition. The EU ETS Directive 2026 review could permit cross-border purchase-based SAF claiming, opening a non-physical channel for US molecules.
Bilateral trans-Atlantic aviation fuel agreement. No precedent specific to SAF exists; an Open-Skies-style fuel sustainability protocol would be required to override unilateral feedstock exclusions.
Resolution of the EU court challenge to the crop-feedstock ban. A ruling for ePURE, Pannonia Bio, and the US intervenors would unlock corn-ethanol-derived ATJ for EU compliance.
Trade-defense forbearance. A Commission commitment not to extend biodiesel-style anti-dumping or anti-subsidy measures to SAF, given that 45Z is a producer credit and a likely target if the EU industry petitions.

None of these is on a near-term timeline that aligns with the 2030 RefuelEU compliance window.

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The base case for the rest of the decade is parallel-supply: US producers earn 45Z at home and sell into CORSIA voluntary markets; EU obligated parties chase a tightly defined waste-lipid pool the US cannot economically supply at scale. READ MORE

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used cooking oil (UCO)/yellow grease United Nations' International Civil Aviation Organization (ICAO) Transportation Fuels Policy Trade Policy Texas tax policy tallow Sustainability Roundtable on Sustainable Biomaterials (RSB) Renewable Energy Directive (RED/RED II/RED III) Regulations-Federal power-to-x/gas/liquid Nevada Montana market forces mandates loans litigation Lipid Jetfuel (Sustainable Aviation Fuel (SAF)) International Sustainability and Carbon Certification model(ISCC) Indonesia ILUC (Indirect/Induced Land Use Change) HEFA (Hydro-processed esters and fatty acids) Hawai'i Georgia European Union (EU) European Emissions Trading System (ETS) environmental policy Energy Information Administration (US EIA) electrofuels (e-fuels) Department of Energy (DOE) CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) corn oil/distillers corn oil (DCO) certification carbon markets carbon credit markets carbon credit Canada California book-and-claim BioRefineries/Renewable Fuel Production Biofuel Crops Aviation Fuel/Sustainable Aviation Fuel (SAF) aviation fuel (SAF) mandates Argentina alcohol-to-jet (ATJ)/ethanol-to-jet (ETJ) Agricultural Policy 45Z Clean Fuel Production Tax Credit

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