1. Executive Summary
Spanish renewables developer Avalon Renovables is launching a landmark investment of €1 billion (approximately US$1.17 billion) to build a combined green hydrogen and synthetic aviation fuel (e-SAF) production facility in southern Spain. The project is slated to be located in the Málaga region and aims to serve the aviation sector’s decarbonisation targets under EU policy frameworks.
The proposed facility will produce e-SAF derived from green hydrogen (“green H₂”) and will be integrated into Avalon’s broader strategic pipeline of hydrogen and derivatives projects across Andalusia. With the project, Avalon seeks to position the region of Andalusia as a global leader in industrial decarbonisation and sustainable fuel manufacturing.
2. Project Highlights & Strategic Context
Location & Scope
- The facility is located near Málaga, Spain, leveraging access to renewable resources and proximity to aviation hubs.
- It is expected to target production of approximately 30,000–35,000 tons per year of e-SAF in the Málaga project phase.
- The project forms part of Avalon’s wider portfolio, which already includes more than 3.5 GW of green hydrogen and derivative projects in Spain.
Policy & Market Drivers
- The initiative is aligned with the European Union’s mandate for synthetic aviation fuels (e-SAF) — for example, the requirement for fuel suppliers and airlines to use 1.2 % synthetic aviation fuel by 2030.
- The aviation industry’s decarbonisation imperative is driving demand for low-carbon alternatives to conventional jet fuels.
Technology & Derivative Products
- Green hydrogen will be produced using renewable electricity and then used as feedstock to manufacture e-SAF (synthetic aviation fuel) and other derivatives.
- Avalon’s broader derivatives strategy in Andalusia includes production of green ammonia and e-methanol.
3. Strategic Importance & Regional Impact
Industrial Decarbonisation
This project signals a major step in shifting southern Spain — particularly Andalusia — into a
clean-fuels manufacturing hub. Avalon states the projects will “play a decisive role
in positioning Andalusia as a world leader in the progress towards industrial decarbonisation.”
Economic and Employment Impact
- Through its broader investment programme (about €8 billion, of which this project forms part), Avalon anticipates the creation of more than 10,000 direct jobs by 2030 in the region.
- The investment covers not only production plants but also infrastructure for transport, storage and distribution of green hydrogen and derivatives.
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Market First-Mover Potential:
While many e-SAF and green hydrogen projects exist in Europe, few have reached a final investment decision (FID). Avalon’s announcement of the Málaga e-SAF project marks a strategic step towards operational realisation.
4. Key Challenges & Considerations
- Permitting & FID: Although the announcement is substantial, full project execution will depend on regulatory approvals and final investment decisions. Avalon acknowledges that the investment is conditional on permits.
- Economics & Cost: The production of green hydrogen and e-SAF remains relatively expensive compared to fossil-based alternatives; scaling and cost reduction will be critical.
- Feedstock & Renewable Electricity Supply: Securing sufficient renewable electricity, electrolyser capacity, and (where applicable) carbon-capture supply chains will be foundational.
- Off-take & Market Integration: Ensuring stable demand from airlines for e-SAF and robust logistics for fuel distribution are necessary to support commercial viability.
- Infrastructure Build-out: Transport, storage and distribution infrastructure for hydrogen and derivatives will need to be developed at scale as part of the project’s value chain.
5. Outlook & Next Steps
- Avalon expects to begin first phases of production of e-methanol and e-SAF by mid-2028 in the Andalusia region.
- With the Málaga project announced, the company remains active in multiple Andalusian provinces (Jaén, Huelva, Cádiz), enhancing its regional footprint.
- If successful, the project could catalyse further investment and create a turnkey model for large-scale green-hydrogen-to-e-SAF production in Europe.
- Broader industry linkages — for example, partnerships with airlines, technology suppliers and financial institutions — are likely to emerge as the project progresses toward FID.
6. Conclusion
Avalon Renovables’ €1 billion project in southern Spain represents a landmark proposal in the emerging field of green-hydrogen-based synthetic aviation fuels. It aligns with EU decarbonisation mandates, leverages Andalusia’s renewable energy potential, and forms part of a substantial regional investment plan. While significant challenges lie ahead — including permitting, cost competitiveness, infrastructure and off-take agreements — the project stands as a credible signal of the next generation of clean fuel manufacturing in Europe. For stakeholders in aviation, hydrogen, renewables and green finance, this initiative merits close attention.
