The PtX award in the aviation sector has been won by KGAL Investment Management’s investment in a hydrogen-based e-kerosene production plant being developed by Arcadia eFuels at Vordingborg, Denmark.

The investment – made through KGAL’s Enhanced Sustainable Power Fund 6 – is its inaugural investment following first close in October 2023, supporting a first-of-its-kind project in the European Union.

The project is expected to produce around 68,000 tonnes per year of synthetic, climate-neutral aviation fuel (eSAF) from self-produced green hydrogen by mid-2026. This capacity would enable an Airbus A320 to cover the distance between Munich and London about 15,000 times.

One judge for the IJGlobal ESG Awards 2024 said: “Arcadia and KGAL are clearly leaders in key area where many are focused, and where progress like this is much required.”

Another judge added: “This is exactly the sort of transaction that we need to see rolled out on an international basis, and it is a credit to all who have been involved.”

KGAL’s investment in Arcadia eFuels will increase adoption of decarbonised fuel for the aviation industry, as the company builds large scale production facilities to meet the demands of today and for the future.

Arcadia eFuel’s Vordingborg facility will be one of the first large scale production facilities devoted to eSAF.

Michael Ebner, managing director of KGAL, said at the time of investment: “From aviation and logistics to the steel and chemical industries, from water treatment to agriculture – almost anywhere that direct decarbonisation through green power reaches its limits, green hydrogen can be the solution.

“Given the multitude of possible applications, there is enormous potential. Straits Research, for example, forecasts that the green hydrogen market in Europe will grow by an average of 55% per year up to 2030.”

While research is being conducted on e-aircraft – the eventual electrification of aviation will still take decades – and green hydrogen is a key step in the path to that conclusion.

E-kerosene is one of the sustainable aviation fuels (SAF) that – according to an EU decision – will have to be in the tank of all EU-departing flights in the future.

The blend will have to include at least 2% of SAF as early as 2025, rising to 6% in 2030 and 70% in 2050. Currently (at the time of writing the submission) the global production of SAF accounts for only 0.15% of kerosene consumption.

Watson Farley & Williams acted as international legal adviser to KGAL while Accura served as the fund manager’s Danish legal counsel.