220,000t / yr
CO₂ emissions avoided at full operation
// For the climate
Aviation is one of the hardest sectors to decarbonise, and synthetic fuel is the only route that scales without biomass limits. Europe has mandated it from 2030, and supply is far behind. This facility will be one of the first built to change that, where the electricity is clean and the fuel is used five kilometres away.
// Climate impact
The direct climate impact of the Iceland eSAF Project is significant. At full operation, the facility will prevent approximately 220,000 tonnes of CO₂ per year, about midway between the annual emissions of the Rio Tinto ISAL aluminium smelter and Elkem’s ferrosilicon plant at Grundartangi. In everyday terms, that is roughly the same as taking about 100,000 cars off the road each year, based on an average Icelandic passenger car emitting about 2.2 tonnes of CO₂ a year. It will also produce about 2,000 tonnes of green diesel per annum as a co-product, displacing fossil fuel in ground transport.
But the indirect impact may matter just as much. A 300 MW facility will produce hydrogen at a scale that can make smaller transition projects viable: fuelling H₂ trucks, buses or even a hydrogen train to Reykjavík, or providing feedstock to neighbouring industrial users. These are projects that cannot justify a standalone electrolyser at their scale. The facility will remove the chicken from the chicken-and-egg problem that can stall small hydrogen projects in the area.
And the capability built here, in electrolysis, fuel synthesis, carbon capture integration, and renewable energy management at industrial scale, does not stay inside the fence. It builds the workforce, the supply chains, and the institutional knowledge that Iceland needs to finish the last chapter of its energy transition: replacing the oil that renewables alone cannot reach.
For an aviation-dependent country like Iceland, a secure domestic supply of sustainable aviation fuel is essential.
Source ISAL and Elkem emissions: Icelandic Environment and Energy Agency. Aviation share of global CO₂: IEA, ATAG.
// Gap
In 2024, sustainable aviation fuel made up 0.6% of the fuel uplifted at EU airports: 193,000 tonnes, almost all of it biofuel from used cooking oil and waste animal fats. Synthetic volumes were negligible. Yet the ReFuelEU synthetic sub-mandate requires hundreds of thousands of tonnes of eSAF from 2030, rising to 35% of all aviation fuel by 2050, and the biofuel pathways it sits alongside are capped by the supply of waste feedstock long before then.
Mandated demand is escalating against supply that barely exists, and the constraint is not the technology: every step of the chain, electrolysis, methanol synthesis, fuel synthesis, runs commercially today. The constraint is built plants. Each first-of-a-kind facility that reaches operation proves the costs, the financing model, and the system integration for every plant that follows. That is the climate significance of building one: not only its own tonnes, but the industry it makes investable.
Source 2024 SAF baseline: EASA, ReFuelEU Aviation Annual Technical Report 2025 (0.6% share, 193 kt). Mandate schedule: Regulation (EU) 2023/2405 (ReFuelEU Aviation), Annex I. Announced supply: T&E e-SAF Market Report (June 2025) and EASA SAF Dashboard.
// Carbon cycle
eSAF therefore does not offset emissions somewhere else, and it does not promise removals later. It prevents new fossil carbon from leaving the ground in the first place. The approximately 90% lifecycle saving reflects the small energy and process emissions still involved in producing the fuel. In Iceland, where the electricity powering production is nearly carbon-free, those residual emissions are especially low.
Source Lifecycle frame: fossil comparator 94.1 gCO₂e/MJ and RFNBO threshold 28.2 gCO₂e/MJ per Delegated Regulation (EU) 2023/1185. Iceland eSAF: project estimate, range set by the CO₂ supply mix. Iceland grid carbon intensity: Icelandic Environment and Energy Agency. Approximately 90% reduction figure to be confirmed at FEED and verified annually by independent assessment.
// Reduction logic
Hydrogen production is the largest energy input. Electricity from fully renewable sources (hydro, wind, solar, geothermal) yields the lowest carbon intensity. Grids with high fossil shares produce hydrogen with higher embedded emissions, reducing the lifecycle benefit.
Biogenic CO₂ and CO₂ captured directly from the atmosphere are counted as carbon-neutral at combustion. CO₂ captured from fossil industrial sources carries a higher lifecycle penalty.
How heat is recovered, how unreacted gases are recycled, and how the synthesis chain is optimised all affect the energy used per tonne of fuel produced.
// Iceland’s grid
Iceland’s electricity system is approximately 99% renewable, geothermal and hydroelectric. It is one of the lowest-carbon grids in the world. That is partly the result of geology: Iceland sits on a mid-ocean ridge, with abundant geothermal resource and glacial hydrology. But it is also the result of generations of political will. The decisions to drill deep geothermal in the 1970s and to build out hydropower at the scale Iceland did were not accidents of geography. They were made by people who chose long capital cost and long-horizon risk so that later generations could reap the benefits. The renewable grid that makes Icelandic eSAF possible is a deliberate inheritance, not a found object. Wind is the next chapter: the project is set to enable new wind development, on the order of 100 turbines across two to three sites, adding low-cost, environmentally friendly capacity alongside Iceland’s geothermal and hydro base.
Source Iceland grid composition: Icelandic Environment and Energy Agency. Approximately 70% hydro, 30% geothermal.
// Over 20 years
// Caveats
Source Non-CO₂ warming effects: Lee et al., 2021, Atmospheric Environment. Energy density comparison (batteries vs jet fuel): widely reported, approximately 0.25 MJ/kg vs 43 MJ/kg.
// CO₂ sourcing
The facility’s primary feedstock will be CO₂. Many of the producers developing projects in the Green Industrial Park will have it. We intend to gather as much carbon as possible from our neighbours in the park, turning what would otherwise be an atmospheric liability into the raw material for sustainable aviation fuel. The more local CO₂ we can capture, the shorter the supply chain and the lower the lifecycle emissions of the fuel we produce.
If you are a producer in the area with biological waste or CO₂ streams, we would like to hear from you. Your emissions can become aviation fuel.
// CO₂ supply