Delfzijl as a Governance Test – Sustainable Aviation Fuel between Policy Ambition, Hydrogen Reality and Industrial Strategy

Last Updated on 17/02/2026 by 75385885

The Project That Looks Like Fuel but Behaves Like Infrastructure

• Production remains a fraction of demand.

• Feedstock is constrained.

• Hydrogen and renewable electricity capacity are limiting factors.

• Permitting delays are systemic, not incidental.

Delfzijl is therefore not an isolated project. It is a microcosm of a macro tension.

Read more in respect of SAF on IATA: Developing Sustainable Aviation Fuel (SAF).

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3. Governance Starts Before Construction: The Permit and Nitrogen Lesson

The Delfzijl project was announced years ago. It did not immediately proceed. Nitrogen emission rules, environmental objections and process redesign requirements slowed progress materially.

For boards and policymakers, this is not a nuisance detail. It is the first governance lesson:

Transition projects fail not because of engineering flaws, but because governance underestimated system friction.

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Three governance realities emerge:

1. Permit risk is schedule risk.
Every year of delay changes capital cost, financing terms and policy context.

2. Environmental ambition can collide with environmental law.
A project meant to reduce aviation emissions must itself comply with strict local nitrogen regimes. Climate objectives and biodiversity rules operate on different timelines.

3. Social licence is not abstract.
Local communities, NGOs and courts are not external noise — they are structural actors in transition governance.

Boards overseeing such projects should require:

• A permit risk register separate from technical risk,

• Scenario modelling for regulatory tightening,

• Stakeholder mapping beyond statutory consultation,

• “Single-point-of-failure” analysis for legal challenges.

Too often, the climate narrative masks operational fragility.

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4. Offtake Agreements: Demand Certainty or Green Premium Illusion?

KLM’s long-term commitment to purchase a large share of Delfzijl’s output is not merely a commercial contract; it is a governance stabiliser.

Without credible offtake:

• Financing collapses,

• Cost of capital increases,

• Construction risk rises.

ICAO’s SAF dashboard highlights billions of litres under offtake agreements globally. This signals intent — but not necessarily execution certainty.

For boards, offtake agreements require scrutiny along at least five dimensions:

1. Price indexation mechanisms (what happens if fossil jet prices fall?),

2. Sustainability certification clauses (CORSIA eligibility),

3. Volume flexibility and penalty triggers,

4. Force majeure definitions,

5. Counterparty creditworthiness.

A green premium that is politically supported today can evaporate under economic pressure tomorrow. Airlines operate in notoriously cyclical markets. Investors must assess whether offtake is resilient in recession.

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5. Feedstock: The Hidden Constraint

Delfzijl’s planned SAF production relies on waste and residual plant-based oils and fats. This is typical for HEFA-based SAF pathways.

Yet feedstock availability is finite.

Globally:

• Used cooking oil,

• Animal fats,

• Certain waste lipids,

are already subject to competition from renewable diesel production.

ICAO recognises hundreds of eligible feedstocks, but recognition is not equivalent to scalable supply.

From a governance perspective, feedstock risk is multidimensional:

• Availability risk: competition from other sectors,

• Integrity risk: fraud or misclassification,

• Indirect land-use risk: reputational and litigation exposure,

• Geopolitical risk: supply chain concentration.

Boards should demand:

• Traceability systems with audit rights,

• Third-party verification,

• Scenario modelling for feedstock price spikes,

• A transition pathway beyond waste-based lipids toward synthetic fuels.

Without credible feedstock governance, SAF becomes vulnerable to the same sustainability controversies that have plagued biofuels historically.

Read more on the site of the European Union Aviation Safety Agency (EASA) : SAF Development.

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6. SAF is Quietly a Hydrogen Story

At first glance, Delfzijl is a bio-based fuel plant.

In system terms, it is also a hydrogen consumer.

Hydrogen is required in refining processes and becomes central if production shifts toward Power-to-Liquid (e-SAF). The economics of SAF are therefore inseparable from hydrogen pricing and renewable electricity availability.

EASA emphasises the need for technoeconomic viability and coordinated capacity building for SAF scaling. That coordination includes energy infrastructure.

Here lies the structural constraint:

• Green hydrogen production requires large volumes of renewable electricity.

• Power-to-Liquid SAF pathways are electricity-intensive (roughly 15–20 kWh per litre).

• Conversion efficiencies remain limited.

Hydrogen pricing scenarios matter dramatically:

Boards must ask:

• Is hydrogen supply secured?

• Is pricing indexed?

• Are grid capacity risks mapped?

• What happens under power curtailment scenarios?

Without hydrogen realism, SAF ambition becomes arithmetic, not strategy.

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7. The Governance Paradox: Climate Urgency vs Physical Timelines

The political narrative is clear:

• Blend mandates will rise.

• Net-zero by 2050 is non-negotiable.

• SAF must scale rapidly.

The physical narrative is slower:

• Permits take years.

• Electrolysers take time.

• Grid expansions are contested.

• Skilled labour is scarce.

This creates the central governance paradox:

Regulation accelerates faster than infrastructure.

Delfzijl illustrates this tension. The project is proceeding — but years behind initial announcement.

SAF Development Delftzijl starts

For boards and policymakers, realism is not cynicism. It is risk management.

Three scenarios should be modelled explicitly:

Optimistic scenario:
Hydrogen costs fall rapidly; feedstock stable; mandates aligned; construction on schedule.

Base scenario:
Moderate delays; moderate cost inflation; partial mandate relief mechanisms.

Stress scenario:
Hydrogen expensive; feedstock scarce; legal challenges persist; political backlash on ticket prices.

Too often, only the optimistic case informs public announcements.

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8. Why Are We Doing This?

SAF is not pursued because it is the most energy-efficient pathway. Electrification is more efficient where possible. Direct hydrogen aircraft may eventually outperform SAF on certain routes.

SAF is pursued because:

1. The existing fleet is liquid-fuel dependent.

2. Long-haul aviation has no near-term alternative.

3. Drop-in fuels require no aircraft redesign.

4. Infrastructure compatibility lowers switching friction.

In other words:

SAF is a bridge.

But bridges must connect two shores. The governance question is whether we are building the bridge to a feasible hydrogen-electric future — or simply extending fossil dependence with green branding.

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9. The Hidden Balance Sheet: SAF Scaling versus Hydrogen Economics

If Part I established that Delfzijl is not merely a fuel plant but a system project, Part II begins with a harder truth:

SAF scaling is ultimately constrained by hydrogen and electricity economics.

Even where bio-based HEFA pathways are used, hydrogen is required in the refining process. As production gradually shifts toward synthetic e-fuels (Power-to-Liquid), hydrogen becomes the core input.

This changes the governance calculus dramatically.

Hydrogen is not simply a commodity; it is:

• capital-intensive to produce,

• electricity-dependent,

• infrastructure-constrained,

• and politically exposed.

Electrolysis requires large volumes of renewable electricity. Conversion efficiencies are limited. Synthetic fuel production remains electricity-intensive. In practical terms, meaningful scaling of e-SAF would require tens of terawatt-hours annually — electricity volumes comparable to national consumption shares.

For boards and policymakers, this is not a side variable. It is the primary constraint.

A hydrogen price of €2/kg supports plausible competitiveness under strong policy support.
At €4–€6/kg, cost curves change sharply.
Above that range, viability becomes subsidy-dependent.

In governance terms, this means:

• Hydrogen pricing risk must be embedded in project sensitivity analysis.

• Power purchase agreements (PPAs) are strategic instruments, not procurement details.

• Grid connection risk is construction risk.

• Electrolyser deployment timelines are capex risk.

Delfzijl, like other SAF plants, sits downstream of hydrogen economics. If hydrogen fails to scale, SAF fails to scale.

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10. Policy Ambition versus Physical Reality

ICAO’s global framework positions SAF as central to aviation decarbonisation. IATA confirms rapid growth in SAF production — yet from a very low base. EASA emphasises coordinated scaling and technoeconomic viability. These institutional signals create political momentum.

However, momentum is not capacity.

European blending mandates rise progressively toward 2030 and beyond. Such mandates are powerful signals to markets and investors. They reduce demand uncertainty. They create floor pricing mechanisms.

But they also create structural risks:

1. Price shock risk — if supply lags mandates.

2. Creative compliance risk — pressure to stretch sustainability criteria.

3. Political backlash risk — rising ticket prices become socially sensitive.

4. Greenwashing litigation risk — overstated lifecycle reductions.

The governance challenge is to align ambition with feasible supply curves.

Delfzijl demonstrates the fragility of scaling timelines. A project announced in 2019 becomes operational nearly a decade later. That delay is not failure; it is systemic friction.

Boards should therefore demand explicit alignment between:

• Regulatory trajectory,

• Infrastructure build-out,

• Feedstock availability,

• Hydrogen supply,

• and financing conditions.

Without that alignment, ambition outruns physics.

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11. A Realism Framework for Boards and Policymakers

To prevent governance theatre — where targets substitute for execution — boards and regulators should adopt a structured realism lens.

A. Infrastructure Readiness Index

• Grid capacity secured?

• Hydrogen offtake secured?

• Electrolyser manufacturing pipeline confirmed?

• Permit risk stress-tested?

B. Feedstock Resilience Index

• Multi-source procurement?

• Auditable traceability?

• Exposure to agricultural commodity volatility?

• Competing demand mapped?

C. Financial Sustainability Index

• Capex contingency margin?

• Sensitivity at 20–30% cost inflation?

• Long-term price floor secured?

• Subsidy dependence quantified?

D. Social Licence Index

• Community engagement beyond minimum compliance?

• Litigation risk buffer?

• ESG narrative evidence-based?

Delfzijl passes through each of these filters sequentially.

Projects that ignore one dimension often stall in another.

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12. The Energy Efficiency Question: Are We Optimising the Right Variable?

A critical, often uncomfortable question must be asked:

Is SAF the most energy-efficient way to decarbonise aviation?

In purely thermodynamic terms, electrification is far more efficient. Direct hydrogen use (in future aircraft designs) could outperform synthetic fuel pathways on shorter routes. Power-to-Liquid fuel involves multiple conversion steps — each with efficiency losses.

Why then is SAF pursued so heavily?

Because:

• The current global fleet is liquid-fuel dependent.

• Aircraft have long lifespans.

• Drop-in fuels require no redesign.

• Infrastructure compatibility lowers transition friction.

SAF is therefore a pragmatic solution, not a thermodynamic optimum.

Governance demands clarity about this distinction.

If SAF is a bridge technology, then:

• Investment horizons must reflect that bridge nature.

• Overbuilding stranded assets must be avoided.

• Technology optionality must remain open.

Boards should avoid locking in infrastructure that assumes SAF dominance beyond what system economics justify.

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13. Other Opportunities: The Broader Decarbonisation Matrix

If Delfzijl represents one pillar, what are the others?

A credible governance approach evaluates all levers simultaneously.

Below is a structured opportunity matrix (conceptual, not exhaustive):

A. Operational Efficiency (High feasibility, moderate impact)

• Fleet renewal,

• Air traffic management optimisation,

• Contrail mitigation,

• Load factor optimisation,

• Lightweight materials.

B. Modal Substitution (Medium feasibility, moderate impact)

• Rail substitution for short-haul,

• Integrated multimodal ticketing,

• Infrastructure alignment.

C. Technology Transition (Longer-term, high impact)

• Hydrogen-powered short-haul aircraft,

• Battery-electric regional aircraft,

• Hybrid propulsion systems.

D. Synthetic Fuels (Long-term, capital-intensive)

• e-SAF via green hydrogen and captured CO₂,

• Requires renewable power surplus,

• Highly energy intensive.

E. Demand Shaping (Politically sensitive)

• Corporate travel policies,

• Ticket pricing reforms,

• Carbon pricing.

From a governance standpoint, SAF should not crowd out other levers. It should be integrated within a portfolio strategy.

Boards and policymakers who treat SAF as the sole solution risk concentration risk — technological and financial.

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14. Industrial Strategy: Why Delfzijl Matters Beyond Aviation

There is another dimension to SAF projects like Delfzijl.

They are not just climate projects; they are industrial positioning projects.

The Netherlands, with port infrastructure, North Sea wind potential and hydrogen ambitions, sees SAF as part of a broader energy transition cluster.

Industrial policy objectives include:

• Green hydrogen hubs,

• Carbon capture integration,

• Circular feedstock chains,

• High-skilled employment retention.

This shifts the governance conversation.

Investment decisions are not solely about aviation decarbonisation efficiency. They are about:

• Strategic autonomy,

• Energy security,

• Industrial competitiveness.

Boards and policymakers must distinguish between:

• Climate optimisation,

• and industrial policy optimisation.

Both are legitimate objectives. But they are not identical.

Transparency about which objective dominates is essential.

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15. The Risk of Announcement-Led Strategy

Transition narratives often reward announcements:

• “First plant in Europe.”

• “Largest facility.”

• “Net-zero commitment.”

Yet announcements do not produce molecules.

Delfzijl’s long gestation illustrates that:

• Permits matter,

• Infrastructure matters,

• Capital discipline matters,

• Execution discipline matters.

Governance maturity means rewarding delivery, not declarations.

Investors should scrutinise:

• Milestone credibility,

• Cost drift,

• Technical readiness levels,

• Regulatory exposure.

Policymakers should avoid setting mandates disconnected from build-out capacity.

Boards should tie executive incentives to delivery metrics, not publicity milestones.

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16. From Policy Momentum to Governance Discipline

The central message is this:

SAF is necessary for long-haul decarbonisation in the near-to-medium term.
But it is not self-executing, not energy-neutral, and not immune to economic gravity.

Delfzijl’s value lies not in its size, but in its diagnostic power.

If we can govern projects like Delfzijl with realism — integrating hydrogen economics, feedstock integrity, policy alignment and industrial strategy — then SAF can function as a credible bridge.

If not, ambition may outpace infrastructure.

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17. Governing the Transition: From Vision to Execution Architecture

If the story up to now has shown anything, it is this:

SAF projects are not fuel projects.
They are transition infrastructure projects embedded in regulatory, energy and industrial systems.

Delfzijl illustrates the full chain:

• Climate ambition (aviation decarbonisation),

• Regulatory mandate (blending requirements),

• Industrial investment (€300 million scale),

• Permitting friction (nitrogen constraints and redesign)

• Feedstock integrity,

• Hydrogen economics,

• Offtake security,

• Public legitimacy.

Good governance therefore cannot be reactive. It must be architectural.

Boards, policymakers and investors need a structured operating model.

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18. The Four Governance Gates for SAF Projects

A mature governance model for projects like Delfzijl should follow four formal gates.

Gate 1 — Pre-FID (Final Investment Decision): System Readiness

Before capital is committed:

• Are permits secured or only anticipated?

• Is hydrogen supply contracted or speculative?

• Is grid capacity guaranteed?

• Is feedstock diversified?

• Is lifecycle certification assured under CORSIA criteria?

Too often, boards approve projects based on political tailwinds rather than infrastructure certainty.

Gate 1 should require explicit sign-off from:

• Risk committee,

• Sustainability oversight,

• Audit committee (certification exposure),

• Executive sponsor.

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Gate 2 — Construction: Execution Discipline

During build phase:

• Capex contingency buffers must be realistic (20–30% stress-tested),

• Procurement concentration risk monitored,

• Supply chain resilience assessed,

• Milestone reporting transparent.

Delays like those seen in Delfzijl are not anomalies; they are typical in first-of-a-kind facilities.

Boards should demand:

• Monthly schedule variance tracking,

• Independent technical assurance,

• Escalation triggers if cost drift exceeds predefined thresholds.

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Gate 3 — Commissioning: Commercial Viability Stress Test

Before first litre:

• Hydrogen pricing stress-tested,

• Offtake counterparty credit reassessed,

• Feedstock procurement validated,

• Policy landscape re-evaluated (mandates can shift).

A plant that is technically operational but commercially fragile becomes a stranded asset risk.

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Gate 4 — Scaling and Portfolio Integration

After start-up:

• Is expansion modular or fixed?

• Is the technology pathway adaptable (bio-SAF to e-SAF)?

• Does the asset fit long-term decarbonisation architecture?

Transition infrastructure must remain flexible.

Rigid capital can become obsolete capital.

Read more on Boardroom responsibilities in our blog: DORA and the Boardroom – Why Digital Operational Resilience Has Become a Core Governance Responsibility.

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19. The Board Dashboard: What Should Be Reported Monthly?

For boards overseeing SAF exposure (direct or via airline offtake), a concise dashboard should include:

1. Production Readiness Index

   • Construction progress

   • Commissioning milestones

2. Hydrogen Sensitivity Index

   • Current hydrogen contract price

   • Electricity price exposure

   • PPA coverage ratio

3. Feedstock Risk Index

   • Concentration ratio (top 3 suppliers)

   • Certification audit findings

   • Commodity volatility exposure

4. Policy Alignment Index

   • Mandate trajectory versus supply capacity

   • Subsidy dependency ratio

5. Financial Resilience

   • IRR under base/stress scenario

   • Debt covenant headroom

   • Capex variance

6. Social Licence

   • Active litigation?

   • Community opposition metrics?

   • ESG media exposure signals?

Such a dashboard disciplines optimism.

Read more on management commentary and its (lack of) direction: Performance, position and cash flows – Why management commentary explains numbers but not change and IFRS Practice Statement 1 Management Commentary.

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20. Policy Recommendations: Ambition with Structural Coherence

For policymakers, the Delfzijl case offers concrete lessons.

1. Align mandates with infrastructure pipelines.
Mandates must reflect credible supply trajectories. Otherwise price volatility undermines public support.

2. Integrate hydrogen policy with aviation policy.
SAF scaling is hydrogen scaling. Treating them separately creates bottlenecks.

3. Simplify but not weaken permitting.
Climate-aligned infrastructure should not be exempt from environmental scrutiny. But timelines must be predictable.

4. Encourage portfolio approaches.
SAF should coexist with efficiency mandates, rail integration and technology development — not crowd them out.

5. Protect integrity.
Certification standards under ICAO and CORSIA must remain robust. Weakening lifecycle accounting damages credibility.

Ambition is necessary. But ambition without coherence is destabilising.

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21. Investors: Transition as Infrastructure Risk, Not ESG Narrative

Investors increasingly allocate capital under ESG frameworks.

SAF projects attract capital because they sit at the intersection of climate and industrial transformation.

However, investors must distinguish between:

• Narrative-driven capital allocation,

• and infrastructure-grade due diligence.

Key investor questions include:

• Is this project subsidy-dependent beyond viability?

• Is hydrogen cost risk hedged?

• Is feedstock traceability litigation-proof?

• Is capex inflation structurally embedded?

• Is exit optionality credible?

Transition assets can outperform — but only under disciplined governance.

Read more in our blog: Culture, Ethics and ESG: Expanding the Scope of Governance,

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22. The Strategic Role of SAF in the Long-Term Aviation Future

The long-term picture must remain visible.

SAF is most credible as:

• A bridge for long-haul aviation,

• A time-buying mechanism while hydrogen aircraft mature,

• A complement to efficiency gains,

• A platform for industrial clusters.

It is not credible as the sole decarbonisation solution.

Electrification, hydrogen propulsion, modal substitution and operational optimisation must progress in parallel.

Delfzijl should therefore be seen as one piece of a mosaic — not the mosaic itself.

Read more from the International Civil Aciation Organization: Realizing Aviation’s Sustainable Future.

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23. Realism Without Cynicism

Critiquing SAF’s constraints is not opposition.

It is governance discipline.

SAF faces:

• Feedstock scarcity,

• Hydrogen cost volatility,

• Electricity intensity,

• Permitting friction,

• Political sensitivity.

But it also provides:

• Immediate drop-in decarbonisation,

• Industrial opportunity,

• System learning,

• Infrastructure for synthetic fuels.

Realism acknowledges both.

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24. The Delfzijl Test

The Delfzijl project — delayed, redesigned, financed, and now proceeding toward operation — is not simply a regional industrial story.

It is a governance test.

If boards, policymakers and investors can govern this type of project with:

• Integrated hydrogen economics awareness,

• Feedstock integrity discipline,

• Mandate realism,

• Capex prudence,

• Social licence maturity,

then SAF can function as a credible bridge technology.

If instead ambition substitutes for execution, the result will be:

• Cost overruns,

• Public backlash,

• Litigation exposure,

• and damaged climate credibility.

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25. Conclusion: Governing the Bridge

Aviation cannot electrify long-haul tomorrow.
Hydrogen aircraft are not yet commercially deployed at scale.
Efficiency gains alone are insufficient.

SAF is therefore not optional in the medium term.

But SAF is not self-evidently scalable.

Delfzijl reminds us that decarbonisation is not a slogan. It is infrastructure, law, chemistry, economics and governance intertwined.

The ultimate governance insight is simple:

Climate ambition must be engineered — financially, technically and institutionally — not merely declared.

Boards must govern with scenario realism.
Policymakers must align ambition with infrastructure.
Investors must underwrite execution, not narrative.

If we govern the bridge well, it will carry us across.
If we neglect its foundations, ambition will outrun capacity.

Delfzijl is not just a factory.

It is a rehearsal for the governance of the energy transition itself.

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