The two Nordic firms inked a memorandum of understanding that will see Norsk e-Fuel conduct a feasibility study for the eSAF project to be located next to Outokumpu’s stainless-steel mill in Tornio, Finland.

Outokumpu would supply carbon monoxide side streams from its existing ferrochrome production as a feedstock to be combined with green hydrogen to produce 80,000-100,000 tonnes of eSAF.

The project would be led by Norsk e-Fuel, drawing on its network for project development and financing. They estimate the project will cost €1.2bn-€1.5bn ($1.4bn-1.7bn).

Subject to the feasibility study, the company anticipates taking final investment decision around 2028, with construction planned for 2032.

Lars Bjørn Larsen, CCO at Norsk e-Fuel said, “Outokumpu’s industrial platform and available side streams, combined with our experience in developing power-to-liquid projects, create a strong foundation for competitive eSAF production in Tornio”.

This new plant would look to support the EU’s eSAF quota and advance the decarbonisation of aviation.

The announcement comes within a year of Norsk e-Fuel revealing plans for an 80,000 tonne-per-year hydrogen-based SAF facility in Sweden, and alongside ongoing projects in Finland with which the company “continues to progress as planned”.

The EU has introduced strong mandates on SAF, with at least 2% of fuel supplied at EU airports required to be SAF from 2025, growing to 70% by 2050. There’s also a 1.2% 2030 sub-target for green hydrogen-based synthetic fuels, which could reach 35% by 2050.

However, the targets are increasingly being viewed as unachievable due to high production costs.