The Impact of European Renewable Fuel Mandates for Aviation and Shipping on the Dutch Energy System: A Scenario Analysis using IESA-Opt

Abstract

The aviation and shipping sectors are challenging to decarbonize. Recent European regulations — ReFuelEU Aviation and FuelEU Maritime — mandate the use of renewable fuels of non-biological origin (RFNBOs), including hydrogen, e-methanol, e-ammonia, and e-SAF, to enable the uptake of renewable fuels and accelerate emission reductions in shipping and aviation. This research investigates how these policy targets impact the potential for e-fuel production in the Netherlands and their broader implications for the Dutch energy system through 2050.

The study identifies key e-fuel production pathways and integrates updated techno-economic data, particularly for electrolyzer investment costs, into the IESA-Opt energy system model. This model was used to simulate cost-optimal fuel mixes, hydrogen and CO₂ demand, and system-wide impacts under a Reference Scenario, a Policy Scenario (with EU mandates), and an Alternative Policy Scenario (generic emission targets without fuel-specific mandates).

Results show that under the Policy Scenario, e-fuel production in the Netherlands is technically feasible but significantly increases system costs and renewable energy requirements. Aviation fuel mixes are driven by the policy requirement for 35% e-SAF and 35% biokerosene by 2050, while the maritime sector transitions to LNG, biofuels, and a smaller share of e-methanol. Renewable hydrogen demand rises from 18 PJ in the Reference Scenario to 184 PJ in the Policy Scenario, requiring 6.8 GW of electrolyzer capacity. CO₂ use follows a similar trend: in addition to storage, 7.7 megatons are used for e-fuel synthesis by 2050. What-if analyses reveal that uncertainties in biomass availability and CO₂ storage capacity substantially affect hydrogen and CO₂ demand, DAC deployment, and system costs.

The Policy Scenario increases overall system costs by 37% compared to 25% in the Reference Scenario, mainly due to investments in renewable electricity and hydrogen and e-fuel production. The indicative carbon abatement cost is €720 per ton of CO₂. By contrast, the Alternative Policy Scenario achieves the same emissions reductions with more flexibility and at a lower cost of €345 per ton of CO₂. In conclusion, while the EU fuel mandates can drive decarbonization in aviation and shipping, they do so at a high system cost. More cost-effective decarbonization pathways may achieve similar climate benefits without mandating the use of RFNBOs.