SAF funding advances, CBAM guidance expands, and China strengthens carbon market enforcement — August 2026
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Sustainable aviation fuel policy moved from ambition to funding in August 2026. The European Commission also published more detailed guidance for its carbon border mechanism, and China brought new enforcement provisions for its national carbon market into force. This update covers three areas with direct commercial implications: funding and mandates advancing sustainable aviation fuel production in the Netherlands and Brazil; European Commission guidance closing gaps in the Carbon Border Adjustment Mechanism's definitive period; and new enforcement provisions under China's Ecological and Environmental Code. Read on to find out what these developments mean for your business.
Valid as of: 21 Aug 2026.
Global
Brazil: SAF decree sets a compliance curve for airlines running to 2037
What happened
Brazil's SAF decree (13.094/2026) established rules for production, certification, marketing, traceability, and compliance with mandatory emissions reduction targets for the aviation sector under the ProBioQAV program. Airlines operating in Brazil must cut greenhouse gas emissions by a share that rises from 1% in 2027 to 10% in 2037. Compliance is met by retiring Sustainable Aviation Fuel Sustainability Certificates (CS-SAF) through a book-and-claim process.
What it means for your business
Airlines operating in Brazil now have a defined, escalating compliance curve to plan against. SAF producers and certificate originators serving the Brazilian market should plan for structured demand building from 2027, as the book-and-claim mechanism, the same certificate-based accounting model used internationally in schemes such as CORSIA, creates a distinct compliance instrument alongside physical SAF supply. Airlines, fuel suppliers, and certificate originators active in Brazil's aviation value chain should build the CS-SAF compliance timeline into commercial planning.
Entry into force
Targets phase in from 1% in 2027 to 10% in 2037. The decree is finalized.
Further reading
Asia-Pacific
China: Ecological and Environmental Code takes effect, strengthening enforcement of the national carbon market
What happened
China's Ecological and Environmental Code (EEC) took effect on 15 August 2026. It is the country's first comprehensive codification of environmental law and its second formal statutory code after the Civil Code, consolidating 1,242 articles covering pollution control, ecological protection, climate governance, and green and low-carbon development into a single, coordinated legal framework. The Code provides a stronger statutory foundation for China's carbon-peaking and carbon-neutrality goals, including the operation and enforcement of its national emissions trading system (ETS).
What it means for your business
Entities covered by China's national ETS now operate under a Code that increases the legal exposure for non-compliance: failing to surrender sufficient allowances can trigger an initial fine of RMB 1 to 5 million. Eligible China Certified Emission Reductions (CCERs) can offset up to 5% of a covered entity's verified emissions, keeping offset demand from ETS-obligated emitters structurally in place. Companies transacting compliance instruments in or with exposure to China's carbon market should review counterparty and contractual terms against the Code's strengthened enforcement provisions.
Entry into force
In force from 15 August 2026.
Further reading
Ministry of Ecology and Environment: Ecological and Environmental Code
Europe
Netherlands: €290 million in state aid funds domestic e-SAF production
What happened
The European Commission approved two Dutch State aid schemes with a combined budget of €290 million to support the development and production of sustainable aviation fuel (SAF) in the Netherlands. The schemes target e-SAF and non-HEFA advanced bio-SAF specifically, with support delivered across five funding rounds running from 2027 to 2037. The Dutch government estimates the supported projects could produce up to 285 kilotonnes of SAF a year.
What it means for your business
Renewable hydrogen and power-to-liquid producers now have funding in place to help scale e-SAF production in the Netherlands. Biomethane suppliers whose feedstocks or offtake connect to eligible advanced bio-SAF pathways may gain a structural demand signal. A mandate to use SAF creates demand, but it does not necessarily guarantee a price that makes a particular plant or production technology profitable. The scale of that demand depends on which projects and chain-of-custody models each funding round supports. Airlines, fuel blenders, and biomethane and hydrogen producers active in the Dutch aviation fuel supply chain should factor the 2027 funding-round timeline into procurement and partnership planning.
Entry into force
Funding is delivered across five rounds between 2027 and 2037. The State aid approval itself is confirmed.
Further reading
European Commission publishes sector-specific guidance to close gaps in CBAM's definitive period
What happened
The European Commission published ten guidance documents supporting the implementation of the Carbon Border Adjustment Mechanism (CBAM) during its definitive period. The package includes four general guides covering the CBAM compliance cycle, emissions monitoring and reporting, calculation of embedded emissions, and the adjustment of CBAM certificate obligations for EU ETS free allocation. Six additional sector-specific guides, with worked examples, cover cement, hydrogen, fertilizers, iron and steel, aluminum, and electricity.
What it means for your business
Importers of cement, hydrogen, fertilizers, iron and steel, aluminum, and electricity into the EU now have worked, sector-specific examples for calculating embedded emissions and adjusting CBAM certificate obligations against free allocation. That level of detail materially reduces ambiguity for compliance teams forecasting certificate exposure as more installations move through the definitive reporting cycle. Non-EU installation operators, authorized CBAM declarants, and verifiers will want to update their emissions-calculation and reporting workflows against the new guidance.
Entry into force
The guidance applies within CBAM's definitive period, which is already in force. No additional phase-in applies.
Further reading
European Commission CBAM implementation guidance documentation.
Disclaimer
This content reflects regulatory developments confirmed as of 21-08-2026 and was accurate as of the date of publication. It is provided for general informational purposes only, is limited to confirmed developments, and does not purport to be comprehensive. Any forward-looking statements reflect the position as understood at the date of publication and are subject to change.
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