// Cost of production
The price of inputs matters most, as well as how efficiently they’re used. Bringing down those costs requires scale and iteration.
eSAF costs more than fossil kerosene to produce today. Estimates of how much vary with where the line is drawn: from roughly three to five times for SAF broadly, to as much as nine or ten times for the synthetic pathway specifically, depending on plant scale, electricity price, and electrolyser technology.1
Two things change the picture over time. The production cost itself falls as the technology scales, and policy narrows the gap a buyer actually faces, through a rising carbon price on fossil kerosene and a dedicated price-support mechanism for sustainable fuel.2 The gap narrows sharply as the technology scales, with projections putting cost-optimal European production at roughly 1.5 to 2.5 times the fossil jet price by 2050.3 The synthetic pathway is expected to undercut today's bio-based fuels around the mid-2040s, as its costs fall and feedstock-limited routes do not.4
The dominant cost is electricity, which across the industry accounts for the largest share of production cost, since making the fuel takes roughly two units of electricity for every unit of energy in the finished kerosene.5 The electrolyser and the carbon supply make up most of the rest, and first-of-a-kind facilities also carry higher capital costs that fall as the industry matures.1
Renewable electricity is the dominant cost in making eSAF, with the electrolyser the next largest item and fuel synthesis and carbon supply making up smaller shares. The exact split depends on location, technology choice, and the structure of the power contract: electricity can run as low as about 45% of the levelised cost of fuel (LCOF) where power is low-cost and steadily available, but is more usually closer to 60% of the LCOF.
Where the power share falls, the rest of the structure becomes proportionally larger. The implication is straightforward: the economics of eSAF are set by the price and availability of renewable electricity more than by anything else, which is why the same fuel can be markedly more or less expensive depending only on where it is made.5
Levelised cost of fuel (LCOF) shares by process step · Fischer-Tropsch e-kerosene, Central EU, 2050
Electricity is the largest input: the power price, and how fully that power can be used, are the decisive cost levers.
SourceConcawe, E-Fuels techno-economic assessment, Report 4/24 (2024), Figure VII.
The cost of eSAF does not fall for one reason. It falls because several independent drivers improve together, and because they multiply rather than add. Each is already visible in projects being built today.
Electrolyser manufacturing. Today's electrolysers are largely hand-assembled in small batches, and the cost per kilowatt falls as production moves to gigafactory scale, the same shift that took solar panels and battery cells down their cost curves. On learning rates of 16 to 21%, roughly a fifth comes off the cost with every doubling of installed capacity, and capacity is doubling quickly; electrolyser costs are projected to fall by up to 80% over the long term, and the precedent is recent, with solar panel capital cost falling by more than 80% between 2010 and 2021.
Electrolyser efficiency. A more efficient stack turns more of each kilowatt-hour into hydrogen, so the largest input, electricity, buys more fuel; because power is the dominant cost, a few points of efficiency move the whole production cost, not one line of it.
Higher capacity factors. A plant that runs more hours a year spreads its capital over more tonnes of fuel, so as renewable build-out firms up the supply of low-cost power, plants run closer to continuously and the fixed cost per tonne falls with no change to the equipment.
The first-of-a-kind premium disappearing. The first commercial plant of any kind carries an engineering, contingency, and financing premium that the second and third do not, a one-time charge that later plants copy their way out of.
Carbon and process integration. Captured-carbon costs fall as direct air capture scales, and heat recovered from one synthesis stage can power another, lowering the energy used per tonne and compounding every gain above it. None of these is speculative. Each is an engineering trend with a measured rate, observed in plants now operating or under construction, which is how solar and wind became the lowest-cost power on the grid.6
Capturing CO₂ from concentrated industrial streams costs a fraction of direct air capture, USD per tonne
SourceIEA: Is carbon capture too expensive? (2021); Direct Air Capture 2022; Driving down the cost of carbon removal (2025).
Mandated demand paired with EU price support is what makes this market work while production costs are still high; the eSAF market page sets out how it is pricing and tightening.
The eSAF marketThe same fuel made anywhere is the same fuel; what changes is the price of the input that dominates its cost. Iceland offers electricity at some of the lowest prices in Europe through long-term contracts with renewable generators, and because electricity is the largest single cost in making eSAF, that flows straight through to the cost of production.
The advantage is structural, not a subsidy: it rests on resources that are Iceland's own and on the choices of past generations to build out geothermal and hydropower, so it holds for the long term rather than depending on a support scheme that could change. Where renewable power is both low-cost and steadily available, its share of the cost falls, and the rest of the structure, the electrolyser, the carbon and the capital, becomes proportionally larger. It is the clearest illustration of the page's central point: eSAF economics are set, more than by anything else, by the cost of the power behind it.
