Study addresses possibilities of funding for pilot production plants of SAF
Published on May 18, 2021
It is certainly no secret that innovation is costly and pilot plants for decentralised production of renewable electro-fuel represent a huge turning point of innovation in the energy system. To enable the financing of innovations in Brazilian aviation, the ProQR project conducted the study “Financing for Renewable Aviation Electrofuels” (2019). The final report provides a detailed overview of the financial options for sustainable aviation fuel (SAF) development in Brazil.
The good news – there are plenty of possibilities. The research considers regional, national and international funding sources, both public and private. Among them, the study differentiates between various purposes, from basic research to the demonstrative pilot plant, including financial support for the launch and commercialization of the fuel on the market.
The depth of the analysis draws attention, for example, regarding the application of credit modalities and non-refundable support. For example, it should be noted that small companies may not qualify for credit lines. This may be relevant when, in decentralised fuel production, we deal with smaller and innovative products not yet offered by large companies.
The large number of financing options listed might also turn into a challenge: the authors note that firms are barely oriented between them. In addition, political and operational changes can affect the availability of resources. In this sense, another challenge highlighted is the effect of the persistent economic crisis (2019), which results in a loss of availability especially when it comes to public funds focused on innovation (RD&I).
Still, within this complex scenario, the report suggests that in Brazil environmental and regional development funds should be prioritized in obtaining funding. This is because among the many options, it was concluded that banks and executive institutions may be too risk averse for the current state of SAF technology.
The paper can serve as an excellent guide for institutions interested in sustainable jet fuel development in Brazil, on the condition that they consider the possible volatility among available financing instruments for each new project.
To access the document in Portuguese, click here.
The study was conducted by the German Cooperation for Sustainable Development in partnership with the Ministry of Science, Technology and Innovation (MCTI) through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
Contributor to this article is Bárbara Correa.