A group of European Union officials and experts has raised concerns about a proposed accounting approach that would allow electrolytic hydrogen used as an intermediate processing input in biofuel production to be counted toward synthetic fuel mandates in aviation and maritime sectors.
The officials argue that this methodology, sometimes referred to as “e-HEFA,” would circumvent the intent of regulations established in 2023 requiring aviation fuel suppliers to develop dedicated synthetic fuel capacity. Rather than investing in new synthetic fuel plants, incumbent biofuel refiners could leverage existing or planned facilities by incorporating renewable hydrogen into their production processes and claiming credit toward mandatory synthetic fuel targets. Analysis cited in the letter suggests this loophole could displace up to 50 percent of 2030-2031 synthetic fuel targets and 25 percent of targets for the following period.
The officials contend that approving this approach would establish problematic regulatory precedent across the entire EU transport framework and reward companies that have not made sufficient capital investments in genuine synthetic fuel production. Suppliers could generate additional profits by selling hydrogen-modified fuels at prices below authentic synthetic alternatives while maintaining substantially lower production costs.
The letter also highlights potential consequences for future maritime regulations. While the FuelEU Maritime framework does not currently include synthetic fuel targets, regulations will require 2 percent uptake beginning in 2034. The officials warn that failing to address this accounting issue now could create similar loopholes in maritime compliance before those requirements take effect.
The signatories contend that allowing this workaround would discourage the long-term investment and financing agreements necessary to develop genuine synthetic fuel infrastructure, potentially undermining approximately 40 European industrial-scale projects in aviation and 69 projects serving the maritime sector. They argue this contradicts recent EU policy initiatives designed to support authentic synthetic fuel production and maintain European technological leadership in this sector.
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