The European Commission has approved a €36 million ($41.5 million) Danish State aid scheme aimed at reducing greenhouse gas emissions from domestic aviation through the promotion of sustainable aviation fuel (SAF). Marking the first scheme of its kind approved under EU State aid rules, the initiative represents a significant step towards decarbonising the aviation sector in line with both national and EU climate goals.
The scheme, authorised under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) and the 2022 Guidelines on State aid for climate, environmental protection and energy (CEEAG), is designed to incentivise airlines operating domestic routes in Denmark to adopt SAF. It will run until 31 December 2027.
The programme seeks to support at least one domestic air route using 40% SAF—close to the current technical threshold of 50%—far exceeding the 2% minimum required under the ReFuelEU Aviation regulation for the same period.
Support will be provided through monthly direct grants to airlines, covering the additional costs of SAF over conventional kerosene, including associated airport infrastructure expenses. Aid levels will be determined via a competitive bidding process to ensure cost efficiency. The scheme is expected to enable at least 20 commercial one-way flights per week using SAF across one or more domestic routes.
To prevent overcompensation, safeguards have been introduced. These include exclusion of SAF already subsidised by Denmark, other EU Member States or third countries, and ensuring alignment with the EU Emissions Trading System (ETS) and the ReFuelEU framework.
The Commission concluded that the scheme is necessary, proportionate, and has a clear incentive effect—encouraging SAF use that would not otherwise occur. The aid is expected to have a minimal impact on competition and trade within the EU, while contributing to overall CO₂ reductions without merely shifting emissions between sectors.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, welcomed the move: “This Danish scheme paves the way for more sustainable aviation by fostering the use of sustainable aviation fuel beyond current EU mandates. The measure stands as a pioneering model within Europe, offering tangible and proportionate support for achieving our collective climate objectives.”
The full details of the scheme will be published under case number SA.102731 in the EU State aid register on the Commission’s competition website following the resolution of confidentiality concerns.
