At the recently concluded 13th Annual International Finance Awards, ESNAD was honoured as ‘Best Digital Transformation Strategies – Mining – Saudi Arabia 2025’ and ‘Best Stakeholder Communications Strategy – Mining – Saudi Arabia 2025’.

The awards are a testament to ESNAD’s role in supporting the mining sector across the Kingdom, reflecting the company’s commitment to innovation, operational excellence, and sustainable mining practices, in close alignment with the objectives of the Ministry of Industry and Mineral Resources. Through its focus on Licensing, Digital Transformation, and Mining Compliance, the company continues to enhance the investment environment, and contribute to building a transparent, efficient, and future-ready mining ecosystem that supports the Kingdom’s economic goals.

ESNAD’s operations are grounded in a clear mandate to create a transparent, efficient, reliable mining environment that attracts investments, safeguards resources, and promotes environmental and social responsibility. By combining regulatory oversight with digital innovation, ESNAD has transformed how mining operations are managed and monitored, ensuring full alignment with ‘Saudi Vision 2030’ goals.

Through collaboration with government entities, investors, and private-sector partners, ESNAD promotes an integrated mining ecosystem built on excellence, sustainability, and accountability. Its approach balances economic growth with environmental protection, creating value for industry, local communities, and future generations.

Commitment to digitalisation and sustainability
At the core of ESNAD’s success is its relentless commitment to digital transformation, a cornerstone of efficiency, transparency, and innovation. Through the development of advanced digital services, ESNAD has redefined licensing and compliance processes, streamlining investor interactions, automating approvals, and significantly reducing processing times. These advancements have helped position the Kingdom as one of the most attractive destinations for mining investment.

ESNAD also integrates artificial intelligence (AI), drones, and satellite imagery to enhance monitoring and regulatory compliance. By analysing aerial and spatial data, the company detects irregularities, assesses environmental impact, and measures resource extraction in real time. These innovations improve inspection efficiency, strengthen compliance, and support informed decision-making across the sector.

At the same time, in line with the “Saudi Green Initiative,” ESNAD has strengthened environmental stewardship through rehabilitation and afforestation programmes. Its efforts include planting millions of trees in mining complexes such as Al-Summan and Al-Armah, in cooperation with investors and local communities.

These projects reflect ESNAD’s commitment to restoring landscapes and mitigating environmental impact. By promoting cleaner operations, responsible waste management, and biodiversity protection, ESNAD ensures that the Kingdom’s mineral wealth is developed sustainably. The company also applies environmental, social, and governance (ESG) principles aligned with global best practices, reinforcing its role as a responsible mining enabler.

Financial and regulatory excellence
Beyond technology and sustainability, ESNAD ensures financial compliance and regulatory integrity across the sector. It has built comprehensive mechanisms to monitor financial guarantees, enhance collection systems, and minimise operational risks. By enforcing robust governance standards, ESNAD safeguards public resources, supports investor confidence, and ensures financial sustainability.

Through its inspection and licensing programmes, ESNAD guarantees that mining operations comply with the highest standards. ESNAD conducted thousands of inspections and issued hundreds of mining and exploration licenses, demonstrating its dedication to operational efficiency and sectoral growth.

Human capital and collaboration
ESNAD believes that people are central to sustainable progress. The company invests in developing national talent through training, upskilling, and leadership programmes designed to prepare Saudi professionals for the future of mining. 

In this context, it would be appropriate to mention two initiatives. ESNAD’s “Graduate Development Program” is a year-long initiative designed to prepare Saudi graduates for the mining sector through hands-on field training, expert mentorship, and exposure to global best practices. In addition, ESNAD has introduced “REKAZ Future Leaders Development Program” in collaboration with INSEAD, offering a 10-month curriculum focused on strategic thinking, decision-making, and innovative leadership.

This focus on human capital enhances ESNAD’s operational excellence and contributes to the Kingdom’s broader goal of empowering national capabilities.

The company also works with ministries, research institutions, and international partners to exchange expertise and adopt global best practices. Through this cooperative framework, ESNAD promotes innovation, enhances efficiency, and supports the Kingdom’s ambition to become a leading global mining hub.

ESNAD’s journey represents a model of transformation built on vision, innovation, and responsibility. By integrating digital excellence, environmental care, and human development, ESNAD is redefining the future of mining in Saudi Arabia.

As the Kingdom advances toward Vision 2030, ESNAD remains dedicated to enabling sustainable development, driving diversification, and ensuring that the mining sector continues to serve as a foundation for national prosperity, for today and generations to come.

The post Saudi mining industry thrives with ESNAD guidance appeared first on International Finance.

Although these elements still have an important role in determining which registry is chosen, the environment surrounding aviation assets has changed quite substantially over the past several years.

This shift is affecting not only ultra-high-net-worth individuals or large multinational operators, but also family offices, corporate flight departments, leasing companies, and financiers seeking greater certainty in an unpredictable global environment.

Why?
Several key factors are reshaping the current landscape and influencing the discussion.

Stability has become a competitive advantage
Business aviation is inherently international. Aircraft routinely cross borders, interact with multiple regulatory systems, and depend on smooth coordination between authorities, financial institutions, insurers, airports, and operators.

In periods of geopolitical stability, many owners may not fully appreciate how interconnected these systems are. However, when geopolitical tensions rise, the importance of legal clarity and jurisdictional stability becomes far more visible.

Aircraft are highly mobile assets, but they are also highly regulated assets. Their operation depends on documentation, oversight, recognition between authorities, financing structures, insurance compliance, and international acceptance.

When geopolitical tensions affect any part of that framework, uncertainty can quickly emerge.

This has led many owners and financiers to prioritise jurisdictions that offer regulatory consistency, internationally respected oversight, political neutrality, and legal predictability. Respected registries apply international sanctions and compliance frameworks rigorously — stability never means lighter compliance.

In practical terms, owners increasingly want reassurance that the jurisdiction associated with their aircraft will remain stable, credible, and internationally recognised, regardless of broader geopolitical developments.

That represents a meaningful evolution in how registries are evaluated.

The impact of sanctions has changed industry thinking
Reputable aircraft registries fully enforce applicable international sanctions regimes, including appropriate due diligence on aircraft and beneficial ownership. This helps protect the integrity of the registry and the wider international aviation system.

Recent geopolitical tensions have directly affected aviation operations and the ability to operate certain aircraft. What was not possible or imaginable five years ago suddenly became reality on a scale few anticipated.

This has resulted in greater awareness of the potential consequences of operating and moving aircraft across borders when tensions arise. As such, some owners and operators find themselves making decisions based on geopolitical considerations.

All of this has caused many aircraft owners and financiers to consider the long-term implications of choosing a registry.

Aircraft owners are, therefore, asking more sophisticated questions than before. They want to understand how internationally respected the registry is, how stable the jurisdiction may be over the long term, and whether the regulatory framework is clear and predictable.

There is also a greater focus on how effectively creditor and lessor remedies can be exercised under the Cape Town Convention and through an IDERA, particularly where circumstances change unexpectedly.

Reputation now influences operational confidence
Aircraft registries are often discussed in legal or administrative terms, but their influence extends far beyond day-to-day aviation activity.

Registry reputation can affect how an aircraft is perceived by financial institutions, insurers, maintenance providers, international authorities, and prospective buyers. In a more scrutinised geopolitical environment, credibility matters.

This is particularly important for aircraft involved in international charter operations, cross-border corporate travel, leasing environments, and complex ownership structures.

The industry is becoming more conscious that aircraft registration is not simply a compliance exercise. It contributes to the overall perception of the asset.
That perception can influence financing discussions, operational flexibility, insurance relationships, and ultimately long-term asset liquidity.

Aircraft registration is now part of risk management
One of the most significant changes in recent years is that aircraft registration is increasingly viewed through a risk management lens.

This does not mean owners are expecting political instability everywhere. Rather, it reflects a broader recognition that aviation operates within a global system in which external events can quickly and unexpectedly influence operations.

As a result, owners and financiers are taking a more comprehensive approach when evaluating jurisdictions. They are considering long-term stability, governance quality, operational predictability, legal resilience, and international recognition alongside traditional operational considerations.

This represents a maturation of the conversation surrounding aircraft registration.

The focus is shifting away from short-term administrative considerations toward long-term strategic confidence.

The importance of international cooperation
No registry operates in isolation. Modern aviation depends on strong international cooperation between authorities, operators, manufacturers, financiers, and technical organisations.

In times of geopolitical uncertainty, collaborative relationships become even more important.

Registries that maintain strong communication channels, uphold internationally recognised standards, and demonstrate regulatory consistency help support stability across the aviation ecosystem.

This is one reason why ICAO alignment and international credibility remain so important.

At the San Marino Aircraft Registry, a Cape Town Convention contracting state since 2015, the emphasis has always been on maintaining internationally recognised standards while supporting operators with professionalism, responsiveness, and regulatory clarity.

Those principles become even more valuable in periods of global uncertainty.

Looking ahead
I believe the registries that will matter in the next decade will be those that combine stability with uncompromising compliance.

Meanwhile, business aviation remains global. It allows owners to fly across borders with relative ease. Aircraft owners still need legal certainty and legitimate asset protection within a framework of full international compliance.

In today’s geopolitical climate, aircraft owners are increasingly concerned with these aspects.

The post Why geopolitical risk is reshaping aircraft registry decisions appeared first on International Finance.

However, Lufthansa’s profit outlook followed the same pattern of its global peers, with these being the common factors mentioned across the aviation industry’s earning documents: ​Iran war, higher jet fuel prices and capacity revisions.

While the budget carriers have felt the worst of the crisis, fuel-related costs have managed to pressurise the airlines’ hedging programmes too.

One after another, disappointing numbers arrive

Let’s start with Lufthansa, whose latest forecast 2026 adjusted earnings before interest and tax (Adjusted EBIT) stands at 1.7 billion euro-2.2 billion euro (USD 2.0 billion to USD 2.5 billion). It had previously expected adjusted EBIT ​well above the 2025’s 1.96 billion euro. After peaking in June 2026, the carrier’s stock has gone down about 2%.

Lufthansa’s capacity fell about 3% in the Q2, partly due to the staff strikes in April. However, its ​full-year capacity plans remain unchanged and are expected to be broadly flat. Adjusted EBIT fell to 383 million euro in the ​second quarter from 870 million euro ⁠a year earlier, well below analysts’ average forecast of 401 million euro.

The company now expects 2026 fuel costs of 8.66 billion euro, compared with an earlier forecast of 8.9 billion euro.

As per the Chief Financial Officer (CFO) Till Streichert, the second half of the year remained uncertain as customers were booking closer to departure dates. Still, Lufthansa has decided to maintain its longer-term ‌targets, including ⁠an operating margin of 8% to 10% between 2028 and 2030, despite geopolitical disruptions.

The company added that 86% of its fuel needs for this year are hedged, while Spohr told reporters ​fuel supplies are expected to remain stable.

For Air France-KLM, things were a bit different in Q2, as it beat profit expectations on revenue gains from premium and long-haul travel. However, Iran war was the spoilsport here, as the carrier trimmed its annual ‌capacity guidance.

The airline group, in the coming days, will be leveraging its premium offering and ticket price increases to sustain profits through an industry downturn. However, Dutch arm KLM said improvements were not good enough to strengthen its financial foundations.

ALSO READ | AirBaltic files for Chapter 11 bankruptcy as Iran war drives up fuel costs

The Franco-Dutch group posted second-quarter adjusted operating profit ⁠of 484 million euro (USD 552.5 million), down from 736 million euro in the same period in 2025 but higher than the 327 million euro consensus from analysts ​polled by the company.

Air France-KLM has lowered full-year capacity expectations, ‌now guiding ⁠for a 1% drop in short and medium-haul flights and a group increase of between 2% and 3%. That is a second cut from the 3% to 5% forecast made before things got heated up in the Middle East. ​The capacity cuts will mainly materialise ⁠in the Q4 and will include fewer daily flights through European cities such as Dusseldorf and London.

The company also trimmed its April fuel bill projection for ​2026 by 4% to USD 8.9 billion, citing newer and more efficient aircraft as well as jet ​fuel hedging.

With 6.8 billion euro ⁠in net cash and 3.5 billion euro in undrawn credit lines (at the end of June), the airline group may look to go for cheap consolidation opportunities.

Budget carriers face cost pressure

The environment is forcing smaller and budget carriers to seek restructuring or buyouts. Portugal’s TAP, one such carrier, has emerged Air France-KLM’s acquisition target, with Lufthansa being the other interested party.

TAP has slots linking its Lisbon hub with Brazil, Portuguese-speaking African countries and the ​United States, markets that can potentially become lucrative expansion opportunities for the winner.

British Airways owner IAG, while publishing its Q2 results in July, trimmed its 2026 capacity outlook ‌to flat, after reporting a 16% profit drop due to soaring fuel costs and weaker travel demand.

IAG, which also owns Iberia and ​Aer Lingus, said its fuel costs for the year would be between 8.3 billion euro and 8.6 billion euro (USD 9.6-USD 9.9 billion), slightly lower than the roughly 9 billion euro forecast ‌in May.

The company said it was about 57% booked for the second ​half of the year, with booked revenue in line with a year earlier. It continues ​to expect to ⁠offset about 60% of its higher fuel bill through higher ticket prices and cost-cutting measures.

ALSO READ | Iran war: Chinese airlines sink deeper into losses as jet fuel prices bite

EasyJet, before its acquisition by Apollo Global, saw the Iran war and the resultant price pressure on jet fuel contributing heavily in its 70% ‌profit downfall.

Ryanair, a prominent name in the European budget flying segment, witnessed its profit slumping ​by a third in its most recent quarter on higher fuel costs and lower fares that look set ‌to remain weak through the key summer period amid renewed consumer nervousness due to the Iran war.

The Irish airline reported after-tax profit of 538 million euro (USD 616 million) for its fiscal first quarter through June 30, ​down 34% from the previous year and short of a forecast of 579 million euro in a ​company poll of ⁠analysts.

However, the budget carrier maintained about being “better positioned” than most rivals because 80% of its fuel requirements to the end ⁠of March ​2027 are hedged at USD 67 per barrel. The management also stepped in to ​hedge 15% of its fuel needs for the following year at USD 85 per barrel during the recent interim ceasefire.

Wizz Air, another budget airline, saw its operating losses further deepening in the first quarter. It now expects revenue per seat to keep falling in the current quarter after it cut fares to attract passengers. Despite the headwinds, it has decided to keep on expanding its operational capacities, by inducting new Airbus aircraft in its fleet.

The budget carrier has hedged 76% of its full-year jet fuel needs using zero-cost collars, instruments that would cap the business’ ⁠exposure at USD 826 ​per metric ton. However, the same mechanism, prices fall below ​a floor of USD 759, may end up becoming counter-productive, as it will prevent the carrier from benefiting from the windfall.

Same story everywhere

In the United States, domestic airfares have been 26.5% higher than a year ago, according to June’s consumer price index data. Analysts, after decoding the data, found prices going up, both in domestic and global front, by 25%-30% compared with 2025.

Strong demand for travel and reduced global oil refining capacity have resulted in upward trajectory of jet fuel prices. The commodity was trading about USD 149 a barrel as of August 4, up from USD 90 at the start of 2026 – a 65% increase. Crude-oil prices are up about 30% since January, trading around USD 76 a barrel.

“Jet fuel costs rise slightly higher than oil prices because on average, only about 10% of refined oil can be turned into jet fuel. The more limited the product, the more vulnerable it is to these supply shocks,” said Louise Burke, the global head of aviation at Argus Media, a commodities data provider, while interacting with the Guardian.

“There have been a substantial amount of refinery closures, a key to why jet fuel prices have soared so much higher than standard crude oil. A new refinery in west Africa has helped bring on supply, and refiners are making tweaks to boost output to about 12%-14% to take advantage of the higher jet fuel prices, which has helped to alleviate some of the shortages,” she noted further.

ALSO READ | Iran war: Higher fuel costs weigh on UK carriers’ earnings outlook

As per John Grant, the chief analyst at OAG, jet fuel prices are the biggest operating cost for airlines and the hardest to control. Costs range between 30% and 35%. In a set-up like this, airlines get a little elbow room. Some may hedge their fuel costs to limit losses, but others buy on the volatile spot market.

Demand for flying in the world’s largest economy has also persisted despite higher airfares, giving airlines more leeway to continue charging higher prices.

Legacy carriers such as American Airlines, United Airlines and Delta Air Lines said in recent earnings calls that higher airfares helped to offset some of the higher fuel costs, but the volatility of prices makes it hard to forecast the effects.

In China, in separate filings to the Hong Kong and Shanghai stock exchanges on July 14, China Southern Airlines, Air China, and China Eastern Airlines reported anticipated interim losses that add up to between RMB 7.37–8.97 billion (USD 1.1–USD 1.3 billion).

And this is not about China, Europe or the United States. Everywhere it’s the same scenario. As per the International Air Transport Association’s (IATA) latest financial outlook for the global airline industry, overall sector profitability will get halved due to the geopolitics, with high fuel prices acting as the constant irritant.

Airlines are expected to achieve a combined total net profit of USD 23.0 billion in 2026, roughly half the previously projected USD 41 billion. The net profit margin is expected to be 2.0% in 2026, roughly half the previously projected 3.9%. It is also less than half the 4.2% estimate for the 2025 net profit margin.

Total industry revenues are expected to reach USD 1.165 trillion in 2026, up by paltry 9.4% on the USD 1.065 trillion in 2025.

Only silver lining will be the passenger load factor, that is forecast to continue to set record highs with airlines expected to fill 84.0% of all seats over the year. This will be an improvement on 2025’s ratio of 83.5%.

What’s happening at the fuel price front?

In the United States, the price for a gallon of Jet-A fuel rose 70 cents in August 2026 when compared to July figures to settle at an average price of USD 8.31 per gallon. Fixed-Base Operators (FBOs) conducted by the Aviation Research Group found out Jet-A fuel prices going up the USD 1.70 per gallon mark during the month, compared to the similar period in 2025.

Europe has been able to offset lower Middle Eastern jet fuel shipments by importing cargoes from the United States and Nigeria. The continent brought around 750,000 barrels per day (bpd) of jet fuel in June, the highest level since October 2025, and maintained a similar pace in July.

On August 10, imported jet cargoes were assessed at a discount of USD 24 per metric ton to gasoil futures, the widest discount since July 2025, according to LSEG and Argus Media.

At the height of the Iran war in March, jet fuel had traded at a premium of more than USD 500 per barrel over the benchmark.

However, the current situation is much better than the one seen a couple of months ago, when the International Energy Agency (IEA) warned about the continent having “maybe six weeks of jet fuel left.”

The reality is that the Gulf exports constitute the largest source of jet fuel to the global market. Refineries in other major exporting countries, such as Korea, India and China are themselves highly dependent on crude oil imports from the conflict-ridden region.

Europe has, over the years, relied on the Middle East for about 75% of its jet fuel imports. As per the IEA’s estimates, despite United States and Nigeria acting as the guardian angels currently, they would be only be able to replace a little over half of the lost supplies.

Houston-based Chris Russo, associate director for energy in North America at Publicis Sapient, sees the crisis leaving a long-term imprint on the airlines’ profit books.

Russo, while speaking at the Aviation Week Window Seat podcast, stated that even if Iran war ended tomorrow and the Strait of Hormuz fully reopened, jet fuel prices to remain high for months to come.

In fact, if the crisis gets worse again, some low-cost carriers may not survive a prolonged period of higher costs.

As per him, China and the United States have relied on their strategic oil reserves since the beginning of the Iran war. However, the world has been facing a nearly one-billion-barrel supply shortage.

“This hasn’t been factored into the prices of crude, so that will come back to bite because it will jack up prices again in the future and cause problems downstream for things like jet fuel. This is going to be a challenge for airlines for a long while,” Russo said.

For him, airlines, from now onwards, should take a long-term view about how to procure fuel and manage the processes like commodity’s smart management. Beyond reactive steps, like cutting routes or frequencies, or even fuel hedging, carriers should closely examine the contracts they have with suppliers to guarantee some amount of fuel over the next 12 or 24 months.

Russo said working those options could save an airline one to four cents per barrel, a meaningful saving when so many barrels are being bought.

Fuel Hedging: Where things stand now

In April, Ryanair CEO Michael O’Leary warned that the European aviation sector, as a whole, will face “financial difficulties” if jet fuel prices stay high.

Then, the following month, discount American carrier Spirit Airlines decided to cease its operations, after repeated attempts to secure creditor support for a government bailout plan met with failure.

Spirit once accounted for 5% of US flights. The news broke out on May 2. A day before that, the carrier’s board blamed the increase in oil prices and “other pressures” on the business responsible for the carrier’s deteriorating financial outlook, that ultimately led to its bankruptcy.

Talking about the Iran war and its impact on Spirit, the carrier’s restructuring plan assumed jet fuel costs of about USD 2.24 a gallon in 2026 and USD 2.14 in 2027.

However, geopolitics shot prices up to around USD 4.51 a gallon by the end of April, making fresh financing a must for the survival of the business, which it couldn’t manage.

However, things have changed since then. S&P Global’s July data, while talking about the industry’s fuel hedging trends, “European airlines’ fuel hedging programs have absorbed the bulk of this year’s conflict-driven jet fuel price shock, industry data showed, widening a structural cost divide with largely unhedged US carriers as coverage ratios begin to thin into 2027.”

Air France-KLM has lifted hedge cover to 87% of consumption on a horizon extending two years forward, while Lufthansa entered the crisis roughly 82% hedged for the Q1 2026 and 77% for the full year.

IAG’s coverage stood at 75% in the first quarter, declining to 50% in the Q4 2025, while Air France-KLM’s quarterly profile ranged from 70% in the first quarter to 47% in the fourth quarter.

Among low-cost carriers, EasyJet was 84% hedged for the H1 2026, 62% for the H2 and 43% for H1 2027, while Ryanair has locked in roughly 80% of next year’s fuel requirement. Wizz Air has described itself as mostly hedged through 2026.

IATA sees the North American airlines largely moving away from fuel hedging, jet fuel cost increases are transmitted more directly and rapidly into the region’s airlines’ cost bases.

Should prices remain elevated as legacy contracts roll off, carriers will face a choice between re-hedging at structurally higher forward levels, absorbing the cost into margins, or passing it through to fares.

Pain everywhere

In July, Iran war found its mention in the International Monetary Fund’s (IMF) outlook, with the global monetary body cutting its 2026 global growth forecast for the second time this year. Since then, the headwind called the energy shock has been accompanied by heatwaves (in Europe) and the record high food prices.

Consumers are already facing a cost-of-living heat. Central banks are showing reluctance to cut their interest rates. And if the April’s report from the consultancy Teneo is to be believed, the Iran war has ended up triggering a surge in air fares, with the lowest-priced economy tickets costing 24% more on average than they did a year ago.

The war, in its sixth month, saw a ceasefire being signed and broken by the Washington and Tehran. Post-June, Qatar, Oman, Kuwait, Jordan and Bahrain have all faced missile and drone attacks, resulting in the flight cancellations.

Several international airlines have pushed their route cancellations to the Middle East after the European Union Aviation Safety Agency (EASA) extended its conflict zone advisory for the Gulf, urging airlines to avoid the contested airspace until August 31.

So even if the jet fuel flow gets normal, a lack of permanent ceasefire will ensure that even if the carriers resume their Gulf services, avoiding the contested airspace will end up resulting in taking alternative yet longer routes, leading to more fuel consumption. The cycle of hedging and re-hedging will continue.

Higher ticket prices will remain as airlines will be looking to recover fuel costs. For budget carriers, whose popularity hinges solely on low-cost flying, will find it difficult to pass on the costs.

After the pandemic lull, airlines entered the post-pandemic period focusing on expansion. The Iran war has forced them to focus once again on survival, cost control and balance-sheet protection, whether the industry likes it or not.

The post Soaring jet fuel costs, squeezing profits: Airlines’ ‘Iran’ headache appeared first on International Finance.

However, all that glitters is not gold. Apply the proverb to the real-world scenario and you will find it sitting perfectly with Germany’s crown jewel. Beneath so-called top rankings, lies weak consumer demand, slowing electric vehicle (EV) sales, intense competition from Chinese manufacturers, rising production costs, geopolitical uncertainty, and the expensive transition toward electrification, that are squeezing profits across the industry.

One after another, companies are announcing restructuring plans, only to meet opposition and scrutiny from labour unions. The current industrial downturn do not appear to be a cyclical one.

The issue reflects a painful structural transformation, that is forcing German automakers to rethink their business models, putting millions of jobs at risk.

An ongoing bloodbath

Let’s start with Volkswagen. The company’s operating profit fell 9.5% in the April-to-June period ‌to 3.5 billion euro (USD 3.98 ⁠billion). With revenues of 82.4 billion euro, the group was somehow able to keep its operating margin within the 4.0% to 5.5% target range for the full year, at 4.2% in the second quarter.

The group no longer expects revenue growth, and instead the automaker is bracing up for profit decline of up to 3% in 2026.

CEO Oliver Blume has been uncompromising on the need of the automaker becoming competitive against Chinese rivals, both at home and abroad, by large-scale cost-cutting.

Blume believes Volkswagen is facing more than 150 Chinese competitors right now, with some of them even challenging the German giant successfully in its home turf.

Blume’s restructuring plans have met with resistance from the powerful labour unions. They believe that, more than job cuts, ​progress on technology and product development will help the company stage a comeback.

Mercedes-Benz, another German major, has seen its core ​car business suffering an 8% fall ‌in the second quarter. In China, the sales drop ​was a whopping 30% compared to the ​same period in 2025.

The automaker posted a higher Q2 profit, as the figure rose 22% to 1.5 billion euro (USD 1.7 billion), thanks to its financial services and vans.

As per CEO Ola Kaellenius, Mercedes’ German factories are in need of ​an intense push for leaner production (read potential job losses). The automaker is already diversifying its operations to open up new profit streams.

It is boosting its production presence in cheaper Eastern European countries, such as Hungary and Poland. In Argentina, during May this year, the company inaugurated a USD 110 million industrial truck plant, with the goal of ​producing up to 10,000 units per ⁠year.

No one is spared

BMW too will cut ​several thousand jobs in Germany by 2027-end in response to a squeeze in profits and weak demand.

The automaker’s Q2 deliveries shrunk by 4.9% and following the loss-making patterns of its domestic peers, BMW saw heavy sales drop in China. A 30.2% downfall in the world’s largest auto market couldn’t be offset by the combined 19.5% growth seen in the American and European markets.

The automaker will now trim its product portfolio, reviewing model variants in certain markets as electric vehicle adoption diverges between ​countries such as China, where EVs ​dominate, and the US, ⁠where combustion-engine vehicles remain popular.

It has also signed a long-term deal with Qualcomm to acquire chips ​for its future digital ‌cockpit and advanced driver-assistance systems, that will come as built-in features for its next-generation vehicles.

The company has concluded a USD 1.7 billion investment in its ​production plants in South Carolina, gearing ‌up for the launch of EV production in the United States.

Luxury carmaker Porsche will cut around one in five jobs by 2035, ​with 9,000 positions to be axed in total (from the total workforce of 42,600), toeing the restructuring line of parent Volkswagen and its ‌brands.

⁠Michael Leiters, who became the CEO earlier 2026, has been ​tasked with overhauling the business, with sales in Porsche’s once highly lucrative China market collapsing and its EV strategy stalling.

Porsche has given its workers the guarantee of keeping sites open for another five years, until the end of 2035, as well as 2.1 billion euro (USD 2.39 billion) in investments in ​its main factory in ​Stuttgart-Zuffenhausen and its ⁠R&D centre in Weissach.

Things spill at supply chain front too

The automotive sector is the backbone of the German economy, with an estimated three million people directly and indirectly employed by household names, including Volkswagen, Mercedes and BMW.

According to a June 2026 report published by the Boston Consulting, “For decades, Europe’s car industry had underpinned the continent’s most powerful manufacturing networks with deep supplier systems, highly skilled labour, and scale-driven efficiency but that stability had been turned upside down.”

The study found that Europe’s production capacity now exceeded demand by ‘more than five million vehicles a year’, or the equivalent of ‘35 production sites’ across the continent.

Both Europe and China have one common enemy: overcapacity. However, China has found a solution, by exporting and selling cheap EVs on a global scale, including in Europe, while the continent’s automakers have failed to generate enough demand in their backyard, resulting in poor financials.

In Germany’s case, the mess has spilled over to the supplier level too.

Bosch, a global engineering and technology giant, that operates across mobility (auto parts and software) and industrial technology (factory automation), received a massive jolt in June as Volkswagen walked away from a 1.5-billion euro (USD 1.7 billion) investment in its automated driving partnership with the supply chain giant, citing a sweeping cost-cutting drive.

Since then, things have not gone smoothly for the supply chain giant. It has decided to cut roughly 13,000 to 22,000 jobs through 2030, due to a 2.5-billion euro cost gap, weak market demand, and intense price competition from Chinese EV and tech manufacturers.

The rubber and plastics division of Continental recently reached an agreement with German labour representatives on a cost-saving programme involving around 1,600 job cuts. Following ​the agreement, Continental will launch a ​voluntary programme offering eligible employees at the ⁠ContiTech business the option to leave under ​agreed conditions.

German ​machine and car parts maker Schaeffler has cut its ‌medium-term sales target, citing weaker market expectations, particularly for passenger cars and light commercial vehicles. The company now expects 2028 sales ​between 24 billion euro and 26 billion euro (USD 27.6 billion and USD 29.9 billion), respectively, down ⁠from an earlier range of 27 billion euro to 29 billion euro.

For Schaeffler, to make matters worse, major American ​customers have withdrawn component orders, something that the CEO Klaus Rosenfeld said was not included in the venture’s 2025 planning assumptions.

While Schaeffler, despite cutting its sales outlook, confirmed its 2028 group targets for an adjusted operating profit ⁠margin ​of 6% to 8%, and adjusted ​free cash flow of 400-600 million euro, it has decided to move ahead with its partial retirement programme in Germany to lower costs at its domestic sites.

The measure, expected to be taken up by ⁠around 1,300 workers, had been agreed with employee representatives, and would result in ​a one-off charge of about 51 million euro (USD 59 million) in 2026, with savings expected from 2027.

A financial analysis by Strategy&, PwC’s German consulting arm, found average interest expenses at ​Germany’s leading auto suppliers rising for a ​fourth consecutive year in 2025 to 102% of ⁠operating earnings, far exceeding levels in the rest ​of Europe and China.

Apart from severe debt loads, the study also discovered another pressing financial problem for these companies: lower ​average equity ratios than their competitors, leaving them more exposed to ‌financial ⁠stress.

Suppliers themselves are ​under pressure to compete, with Strategy& terming the ​cost ⁠gap between German and Chinese suppliers as a ‘widened one’ between 2019 and 2025.

“While German suppliers’ overhead costs worsened during that ⁠period, ​Chinese competitors became more efficient, reducing ​both overhead and manufacturing costs as a share of revenue,” the analysis noted.

China looms large

Europe’s auto market, especially the EV segment, saw sales growth in June 2026, offsetting a ​sharp decline in petrol and ​diesel sales, according to data from the European ⁠Automobile Manufacturers’ Association (ACEA).

While total car registrations ​rose 13.1% to 1,407,332 vehicles, battery-electric, plug-in hybrid and hybrid ‌car ⁠registrations climbed 51%, 22.7% and 17.1%, respectively, together accounting for almost 70% of all new vehicles.

The uptick helped Chinese brands expand their footprint further across the European Union, Britain and the ​European Free Trade Association.

BYD, Chery and Leapmotor sold ​almost three and six times ​more ⁠than what they did in 2025. SAIC and Geely witnessed their sales rising more than 50% and 11%, ⁠respectively.

Registrations ​at Renault, Stellantis and ​Volkswagen rose between 3.6% and 7.3%, which are nowhere close to their Chinese rivals.

The EU’s tariffs on Chinese BEVs, which can add up to 45.3% in costs , have done little to blunt the cost advantage. BYD’s Dolphin Surf Boost is priced in Europe from 26,990 euro (USD 30,800), still 3% cheaper than the comparable Renault 5 E-Tech.

Closely following the European market trends, the automaker is increasingly leaning on plug-in hybrids (PHEVs), which escape the additional tariff altogether. The strategy change resulted in the automaker’s May sales growing by 140%.

Germany, in the beginning of the year, introduced a new incentive, worth up to 6,000 euro for BEVs and PHEVs, while Sweden and Italy have expanded their own policy support. The consumer response got reflected in the continent’s Q1 2026 sales numbers. Total electrified vehicle market share sat at 67.5%, with China emerging as the winner.

Given the intense pace of the global protectionism, local production is emerging as the new reality, and the Chinese are again aware of that. Leapmotor is set to assemble SUVs at a Stellantis plant in Spain. Chery recently opened a European headquarters in Barcelona.

Chinese players are consolidating their grip

Beijing hosted the world’s largest auto show this year too, amid the growing shadow of the global energy crisis in the backdrop of the Iran war and the Hormuz disruption. The 2026 edition featured 1,451 vehicles, including 181 world premieres and 71 concept cars, across a record-breaking 380,000 square metres of exhibition space.

Instead of competing with the Western carmakers on the internal combustion engine front, China decided to take the game to the next level: electric. In May 2014, the then Communist Party Chairman Xi Jinping (and now the President) outlined the goal during a visit to SAIC Motor. What followed was a series of priority state fundings and an international talent recruitment program.

During the Covid years, as international executives stayed away from China, the domestic industry made remarkable advances, both on the vehicle and the supply chain fronts. It resulted in CATL and BYD now dominating global battery supply chains, apart from leading in innovation and disruption fronts, with low-cost sodium batteries all set to come to market in 2026.

China excels in making small, affordable EVs, without compromising on the feature front. It has beaten its global peers on the innovation front. Every 18–24 months, a new vehicle emerges, against the global average of five–seven years. While Tesla developed a 48V architecture for its Cybertruck (up from 12V), Chery is believed to have put the vehicle’s Chinese counterpart under mass production.

Bugatti, which had held the all-time speed record for six years, with its W16 hitting 489 kilometres per hour, got beaten by BYD’s Yangwang U9 Xtreme, that did 496 kilometres per hour with four electric motors and a 1,200V lithium iron phosphate battery pack. The Xtreme was reportedly built in just 18 months.

BYD, ranked as China’s second-largest battery manufacturer, recently broke new ground by developing a car battery with what it calls ‘Megawatt charging technology’. In just five minutes of charging, this battery can travel up to 250 miles.

Chinese EV brands are now branching out into batteries, semiconductors, and other products related to their industry, to expedite their own vehicle manufacturing. Their global peers, including the Germans, are dependent on external partners. Vertically-integrated supply chains, or the lack of it, have become the make-or-break factors here.

China vs Germany: A statistical comparison

The harsher side of China’s rise as a global EV powerhouse has been its domestic front. As per Carscoops, apart from BYD, Xiaomi, and Leapmotor, no more than four additional companies are expected to break even by 2030.

The challenging earnings environment has pushed automakers to expand more aggressively into overseas markets. Data from the China Passenger Car Association showed that sales of BEVs and PHEVs, in the world’s largest car market, totalled 1.04 million units in June, down 7% from the same month in 2025.

Sales for the first half of 2026 fell 13% year-on-year to 4.73 million vehicles. The reason? A dampened consumer demand due to economic uncertainty, expectations of further price declines, and the gradual withdrawal of government support.

Beijing has revised its subsidy programme, phasing out tax incentives for EV manufacturers, a process that will be completed in January 2027.

Analysts estimate the vehicle export tally to be around 10 million by the end of 2026, a 41% increase from 2025.

The removal of tax rebates has hit German ventures too. The sales share held by Volkswagen, Audi, BMW, Mercedes-Benz, and Porsche went down to just 1.6%. That is the lowest on record, with only 19,200 new EVs from these brands registered between January and March, a 55% drop year-over-year.

Volkswagen’s EV sales alone fell by more than 72%, while BMW dropped nearly 65%, and that of Mercedes-Benz slipped by around 14%.

However, it would be unfair to blame the lack of tax rebates alone.

Let’s take BMW as an example. The company is betting on its ‘Neue Klasse’ electric cars to revive its fortunes in China after two years of declining sales. But shareholders and analysts see the five-year development process as a slow one, against the break-neck R&D speed of its Chinese rivals.

Supporters of German cars may say their favourite brands excel on quality. So does China. Nio reportedly drove ​its flagship ET9 sedan over speed bumps with a tower of champagne glasses balanced on the bonnet, without spilling a drop, to showcase the vehicle’s ⁠advanced suspension system.

While Chinese premium brands are openly targeting customers of BMW, Audi, Porsche and Mercedes, only about 5% of BMW’s sales in the world’s largest automobile market have remained fully electric, according to Global Mobility data.

In a market where EVs account for 46% of vehicle sales, the stat is more than disappointing. And that has resulted in BMW’s China sales going down in both 2024 and 2025. Sales at Mercedes and ​Volkswagen’s Audi brand have also been down, dropping 28% and 19%, respectively, in the H1 2026.

According to Shanghai consultancy LandRoads, BMW’s average transaction price in China in 2025 was 341,000 yuan ($50,200), below local brands such as Nio, Aito and Denza. Among German premium brands, only Audi was priced lower, at 287,000 yuan.

Predicting the situation ahead

German brands are now tightening ties with Chinese automakers in an effort to steady the numbers. Audi launched its China-only AUDI brand with SAIC in 2025, and is currently preparing a third all-electric model. Volkswagen has teamed up with Xpeng and recently unveiled the ID. Aura T6 and ID. Unyx 09 at the Beijing Auto Show. Developing these cars locally has cut costs by at least 40%, a figure that explains much of the strategy.

Mercedes will sell its all-electric GLC EQ and the new electric C-Class in China, while partnering with a local company to produce models exclusively for the country. Similarly, BMW has gone it alone with the new iX3 and i3, both of which will be sold in China in long-wheelbase form.

Volkswagen, apart from its aggressive cost-cutting, now sees a revised product offering as a solution, including a new pick-up truck, an avenue for expansion in the United States. Pick-up trucks and large SUVs are in strong demand in the world’s largest economy. As per reports, while the automaker doesn’t offer pick-up truck in its line-up, it plans to bring one into the US market before the end of the decade.

While the American market remains attractive for sellers of combustion engine trucks and SUVs, Volkswagen will face stiff competition from Ford, Ram-maker Stellantis and General Motors.

As of now, it looks like collaboration with Chinese players and expansion elsewhere in the world have emerged as preferred survival options for German automakers.

The post Automobile conundrum: Germany’s industrial crown jewel under pressure appeared first on International Finance.

The numbers alone justify the attention. At USD 5.1 billion, Wynn Al Marjan is more than a resort; it’s a statement of intent by an emirate that until recently was best known as Dubai’s quieter, cheaper neighbour. The property will have 1,530 rooms and suites, 22 restaurants, a 101-berth marina built for superyachts, and a licenced gaming floor of more than 20,000 square metres, plus a second ‘sky casino’ on the 22nd floor.

Analysts have pencilled in annual property cash flow in the USD 450-600 million range, comparing favourably with Wynn’s existing Macau and Boston properties. The company has spoken of revenue potential north of a billion dollars a year once the property matures.

This isn’t a discreet card room appended to a beach resort. It’s designed, unapologetically, to compete with Macau, Singapore and Las Vegas for a slice of Asia’s gaming dollar.

That ambition explains why the project has taken as long as it has to get off the ground, and why it’s worth examining critically. Financing alone required a USD 2.4 billion construction facility (reportedly the largest hospitality financing deal in UAE history) on top of equity contribution from Wynn, Marjan and RAK Hospitality Holding.

Wynn holds a 40% stake in the joint venture, a structure that limits its financial exposure but also its control, more typical of an emerging-market bet than a flagship.

And the ‘modest delay’ language is corporate understatement for a project that’s already weathered a construction pause, materials rerouted around a closed Strait of Hormuz, and a workforce of more than 22,000 labouring through a live regional conflict at its doorstep.

None of this is disqualifying – delays are the rule rather than the exception for integrated resorts at this scale – but the project’s fortunes are tied to a neighbourhood that remains volatile in ways Macau and Singapore simply aren’t.

A licence, not a liberalisation

The regulatory story here matters as much as the architecture. Wynn Al Marjan holds the first, and, so far only, land-based commercial gaming licence issued by the UAE’s General Commercial Gaming Regulatory Authority, a federal body created by decree in 2023 and chaired by Jim Murren, the former chief executive of MGM Resorts.

The GCGRA’s design is deliberately narrow: Each of the UAE’s seven emirates may opt in to a single land-based casino licence and a single online gaming licence, no more. Only Ras Al Khaimah has done so for a physical casino; Dubai, notably, has not, despite MGM Resorts building a large non-gaming hotel there, and reportedly circling an Abu Dhabi application.

Abu Dhabi and Ras Al Khaimah have between them allowed one online operator, Play971, to go live, quietly, in late 2025. This is regulated scarcity, not a free market – a model that borrows more from Singapore’s tightly capped duopoly than from Macau’s crowded strip.

It’s also required real legal engineering. Gambling contracts were, until this year, technically void under the UAE’s civil code even where a GCGRA licence existed. A decree-law that took effect on June 1, 2026, finally removed that contradiction, giving licenced gaming contracts the enforceability investors need – while leaving unlicenced gambling, online and off, a criminal offence.

It’s a narrow, surgical liberalisation: Permission for one heavily vetted operator in one Emirate, wrapped in anti-money-laundering and responsible-gaming obligations pitched, the regulator says, at standards comparable with New Jersey and the UK.

Who exactly will be allowed onto the gaming floor remains one of the project’s more interesting unresolved questions. Early analyst notes assumed Emirati citizens – roughly 10%-11% of the UAE’s population – would be barred outright, consistent with the religious sensitivities involved. More recent regulatory guidance suggests no nationality-based restriction has actually been written into the rules, only an age floor of 21 and valid identification, with final entry conditions to be confirmed closer to opening.

That ambiguity is itself telling: It suggests Abu Dhabi is deliberately keeping its options open rather than committing either way, aware that the answer carries real domestic sensitivity.

Gambling and the Islamic conscience

That sensitivity is not incidental. Gambling – maisir – is explicitly proscribed in the Quran, grouped with intoxicants as a corrupting influence on society, and Islamic jurisprudence across schools treats it as unambiguously haram (forbidden).

It’s this consensus that has kept the Gulf casino-free for decades, and that makes the UAE’s move genuinely startling to many in the region. Riyadh’s approach makes a useful mirror (see sidebar): It shows there’s no single ‘Islamic’ answer here, only a spectrum of political calculations about how far economic diversification can be allowed to stretch religious tradition.

Commentary across the Arab press has been sharp. Critics have accused Abu Dhabi of prioritising tourism revenue over religious and cultural tradition, and of building what amounts to a two-tier system: A foreign-facing playground for tourists, expatriates and global elites – who make up roughly 89% of the UAE’s population – insulated from a citizenry with little formal say in the decision.

Supporters counter that this simply extends a model the UAE has run for decades, from alcohol licencing to Dubai’s nightlife economy: Permissive enough to draw global capital and visitors, calibrated carefully enough not to disturb the domestic social contract.

The market case

The commercial logic isn’t hard to see. Estimates put the UAE gaming market’s potential at $3-5 billion in annual gross gaming revenue, and industry analysts increasingly talk of the country becoming a fourth major global gaming hub behind Macau, Las Vegas and Singapore.

The addressable market is enormous and under-served: Wealthy travellers from India, Pakistan, Iran and the wider Gulf currently fly to Macau, Genting Highlands or, further afield, Las Vegas to gamble. A resort 50 minutes from Dubai International Airport intercepts that demand far more efficiently, alongside European and Russian high rollers already resident in the Emirates.

Wynn’s acquisition of London’s Aspinalls casino, rebranded Wynn Mayfair, looks explicitly designed as a feeder property, channelling British clientele toward Ras Al Khaimah. Regional trend lines support the bet too: Gambling revenue across the Middle East and Africa remains a sliver of the global total but is forecast to grow faster than almost anywhere else through 2031, with the Gulf specifically tipped for growth above 4% annually.

There’s also a wider Asian dimension worth noting. Japan’s own long-delayed integrated-resort experiment in Osaka, and Thailand’s on-again, off-again casino legislation, show how difficult it is even for governments without religious constraints to translate gaming ambition into open floors – years of licencing battles, community pushback, and financing hurdles are the norm, not the exception.

Ras Al Khaimah’s advantage is that it faces none of that domestic political friction: A single ruling family, a compliant federal regulator, and no electorate to persuade. That’s precisely what has let the Emirate move from announcement to near-completion in barely five years, a pace unmatched anywhere else attempting to build an integrated resort from scratch.

Whether Ras Al Khaimah becomes the Macau of the Middle East or a well-financed cautionary tale will depend on execution as much as appetite – on whether the delayed opening holds through 2027, on how strictly access is policed, and on whether Abu Dhabi’s calculated ambiguity toward its own citizens survives contact with a fully operational casino floor. What isn’t in doubt is that the Gulf’s relationship with gambling, quietly settled for half-a-century, has just been reopened for negotiation.

The post UAE’s USD 5.1 billion bet on a casino off Ras Al Khaimah appeared first on International Finance.

A growing tier of companies has decided it does not need a full-time chief anything. It needs the judgement, two days a week, on a monthly invoice. The global fractional executive market has topped USD 5.7 billion, and is growing at roughly 14% a year, with North America accounting for 43.7% of that value at about USD 4.1 billion in 2025. What began as a stopgap for cash-poor startups has become a deliberate sourcing strategy for the mid-market.

The numbers behind the shift are unusually blunt. Gartner expects more than 30% of mid-size enterprises to have at least one fractional executive on retainer by 2027. Some 72% of chief executives say they plan to increase their use of fractional leaders within the next 12 months. A quarter of US businesses already hire this way, a figure projected to reach 35% by the end of 2026, with demand up 46% year on year.

The maths that broke the full-time hire

The arithmetic driving this is not complicated. A full-time chief marketing officer typically costs between USD 275,000 and USD 400,000 a year once salary, bonus, equity and benefits are loaded in. For a business turning over USD 20 million, that is a substantial fixed cost attached to a single person whose value is concentrated in a handful of strategic decisions a quarter.

The fractional alternative re-prices that exposure. Average monthly retainers sit between USD 6,000 and USD 15,000, with hourly rates generally ranging from USD 150 to USD 350 depending on function and complexity. Industry estimates put the saving at 40% to 60% against a full-time equivalent, with no equity dilution and no severance risk.

Sara Daw, chief executive of The CFO Centre, has described the gap plainly. A lot of ‘companies need CFOs but can’t afford them full-time’, she told Forbes, and fractional arrangements are built precisely for that space.

Crucially, this is not consulting rebadged. A fractional executive is embedded leadership accountable for outcomes, not a vendor who hands over a slide deck and walks away. They sit in leadership meetings, own a roadmap, and answer to the board. The difference from a permanent hire is cadence and cost, not scope.

Finance and marketing built the category

Two functions matured first, and both did so for the same reason. Their value is legible on a spreadsheet.

Finance leads. The US market for fractional chief financial officers exceeds USD 3.2 billion in 2026 and is projected to double to USD 6.4 billion by 2028. Marketing follows close behind. The fractional CMO market reached USD 1.27 billion in 2026, with projections of USD 2.68 billion by 2031.

Chief Outsiders, one of the earliest firms to industrialise the model, now fields a network of more than 120 fractional chief marketing officers and chief sales officers across the United States. Its West region managing partner, Karen Hayward, argues that most mid-market chief executives are working from an outdated picture of their own customers, ‘managing growth on assumptions that no longer reflect how buyers actually buy’.

That diagnosis explains the appeal. The problem such companies face is rarely a shortage of marketing activity. It is a shortage of senior pattern recognition, and pattern recognition does not require a desk five days a week.

Revenue leadership is the next segment to mature. The population of fractional sales leaders across the US and Canada grew from 5,000 in 2020 to 9,000 in 2024, an increase of 80%.

The AI officer is the new frontier

Nowhere is the pressure sharper than in artificial intelligence, where demand for leadership has comprehensively outrun supply.

IBM’s 2026 CEO Study, covering 2,000 chief executives across 33 geographies, found that 76% of organisations now have a chief AI officer, up from 26% a year earlier. Postings for chief AI officer and equivalent senior titles grew roughly 400% between 2023 and early 2026.

The role is measurably useful. Organisations with a CAIO scale 10% more AI initiatives and move generative-AI prototypes into production at a rate of 44%, against 36% for those without one.

A full-time CAIO commands a median base salary of USD 353,220, with a typical range of USD 264,915 to USD 494,507, according to Glassdoor’s June 2026 data.

Once bonus, equity, benefits and the team they must build are included, the first-year investment can easily exceed USD 1.5 million to USD 2 million. Other estimates put the salaried cost of a full-time CAIO at USD 400,000 to USD 700,000 before the search even begins.

Few companies below $300 million in revenue can justify that, and fewer still can fill the seat. Fractional CAIOs typically work one to four days a week for USD 10,000 to USD 30,000 a month, an annual cost of roughly USD 180,000 to USD 480,000 with no equity attached.

Paul Okhrem, a Prague-based fractional chief AI officer who advises boards across the US, UK, Europe and the Gulf, frames his own value against the advisory industry. “Most AI consultants will tell you what to buy.”

His counter-argument is operating credibility. He has run production AI inside two companies he founded, Elogic Commerce and Uvik Software, reporting roughly 30% operational efficiency gains. Fractional CAIO engagements start from $30,000 a month, typically running six to eighteen months at one to three days a week.

Why the executives are opting in

The demand story only works because the supply story changed first. Senior leaders are choosing this deliberately, and in numbers.

LinkedIn profiles combining ‘fractional’ with a C-suite title rose from roughly 2,000 in 2022 to more than 110,000 by late 2024, an increase of about 5,400%. The wider fractional professional population doubled from 60,000 in 2022 to 120,000 in 2024, with projections above 200,000 by 2027.

This is not a holding pattern between permanent jobs. Heidrick & Struggles’ 2026 Talent Lens Survey found that 85% of interim leaders have worked independently for more than a year, while new entrants to the field jumped from 6% in 2020 to 15% in 2025. Roughly 72.8% of fractional leaders have 15 or more years of experience, and 92.8% win clients through referral.

The pull factors are familiar to anyone who has watched senior professionals reassess their working lives since 2020. Multiple clients means diversified income and reduced single-employer risk.

Portfolio work suits leaders with grown children, slowing partners, or simply no appetite for another decade of internal politics. More than half of fractional professionals report six-figure annual incomes, which removes the obvious objection.

Karen Hayward’s own trajectory is illustrative. She held executive posts at EarthLink Business, CenterBeam, Accelio, BeyondWork and Xerox Canada before joining Chief Outsiders, converting three decades of operating experience into a repeatable practice rather than a single seat.

Britain becomes the second centre of gravity

The model is not confined to North America. UK fractional jobs have grown 340% since 2019, and 78% of British scale-ups have either used a fractional executive or are considering one, with day rates running between 800 pound and 1,500 pound and London commanding the top of the band.

Europe is following, though more slowly, and the pattern is broadening by sector. Finance, manufacturing and healthcare are now the fastest-growing buyers, displacing technology as the category’s centre. More than 40% of US small and mid-market companies are projected to use fractional leadership by the end of 2026.

Where the model strains

None of this makes fractional leadership a universal answer, and the sector’s own advocates concede as much.

Bandwidth is the obvious constraint. An executive splitting attention across three or four clients cannot absorb a crisis at all of them simultaneously. Cultural embedding is harder part-time, and a leader with no equity and a 30-day notice period has structurally less skin in the game than one whose net worth depends on the outcome.

There is also a data problem for anyone reporting on the category. Much of the market sizing originates with the platforms and firms that profit from growth. Methodologies vary widely, and figures for the same segment can differ by an order of magnitude.

ZipRecruiter’s fractional CAIO index alone spans USD 111,000 to $800,000, because the label covers everyone from one-day-a-week advisers to interim full-time executives. The direction of travel is unambiguous. The precision is not.

The more durable point is structural. The broader executive search market stands at USD 58.13 billion in 2025 and is forecast to reach USD 94.73 billion by 2030, and interim solutions are increasingly sold alongside permanent placement rather than against it. Companies are not abandoning the full-time C-suite. They are learning to buy leadership in units smaller than a career.

For a generation of executives who spent twenty years earning the title, that turns out to be an opportunity rather than a demotion.

The post Renting the C-suite, and why the fractional executive era has arrived appeared first on International Finance.

According to Natasha Hamilton-Hart, Professor in the Department of Management and International Business at the University of Auckland Business School, rules may turn detrimental when they hinder one’s ability to perform effectively. Even though they are supposed to regulate power and provide control, rules do not always lead to people being accountable for their actions. Therefore, Natasha claims that the solution is to have more authority within the organisation, which enables individuals to make decisions, and delete those rules that are unnecessary. Too many rules are an issue in many organisations as they prevent them from making progress and hamper leaders’ actions. With no authority, it is even harder for leaders to work with people and evaluate their performance.

Professor Natasha Hamilton-Hart has extensively published on governance systems in Southeast Asia, focusing on state institutions and property rights. Her current research explores the relationship between the economics-security nexus in East Asia, as well as the role of hierarchy, which she wrote about extensively in her recently released book ’Stupid Rules: Reducing Red Tape and Making Organisations More Effective and Accountable’ (Agenda Publishing). Natasha earned her PhD from Cornell University and has previously held positions at the Australian National University and the National University of Singapore.

In an exclusive interview with International Finance, Professor Natasha Hamilton-Hart discusses the negative impact of too many rules on organisational effectiveness, claiming that accountability is better achieved through proper delegation of authority. She stresses how rules-based organisations tend to discourage decision-making, inhibit leadership, and impede progress, accentuating the importance of hierarchical empowerment, which allows people to make decisions and remove bureaucratic barriers.

In your book ’Stupid Rules: Reducing Red Tape and Making Organisations More Effective and Accountable’, you argue that some rules reduce productivity. What led you to question rule-heavy systems in the first place?

I returned to New Zealand after many years working in Singapore, and found processes surprisingly cumbersome. I had far less control over several aspects of my work, and the rule book was much longer. I then noticed that much of the country seemed to be ’stuck’, unable to deliver public infrastructure efficiently, bogged down in litigation, and many people were fearful of action in case they broke the rules.

In what ways does authority make people more responsible for their decisions?

It is perhaps paradoxical, but if someone has clearly defined authority, meaning they can make decisions based on discretionary judgement, then they can be held to account for those decisions. In contrast, if a manager is reduced to only following and enforcing rules, he or she is not really accountable when things go wrong despite rule-following.

Organisations often introduce new rules after mistakes occur. Why does this response fail to address the underlying issue?

In some cases, a new rule may fix the problem, if the situation really does call for a non-discretionary rule. We can consider a few examples where this might apply, such as speed limits for driving or the requirement to file expense claims within a certain number of days. But often, the problem is a ’mistake’ that is unlikely to be fixed with a simple rule. That could be because the person who made the ’mistake’ has bad judgement, or is a bully, or something like that. In that scenario, a longer, more detailed rule book on its own won’t fix the problem. It just means everyone, including high-functioning personnel, is tied down by red tape, and you still have the incompetent or abusive person to deal with. In other situations, it may be that sometimes mistakes are inevitable, and it does not necessarily signal that the person is incompetent. There are simply situations where the correct decision is not obvious. It is a classic insight originally put forward by Frank Knight, that management in a hierarchy is there to make decisions under uncertainty. Sometimes, the decision may turn out to be the wrong one. It is up to the organisation’s more senior levels to figure out whether the manager is not up to the job, or whether the decision was in fact a reasonable one in the circumstances.

Having studied governance systems in Southeast Asia for more than two decades, how did that research shape your views on authority and bureaucracy?

Southeast Asia showcases a huge variety of bureaucratic systems, both in government and business. Some systems are very informal in practice, meaning that a person’s actual authority may not correspond to their position on the organisation’s chart. Other systems can deliver in a purposeful and disciplined manner. What I noticed was that these more purposeful organisations were not actually rule-bound: decision-makers had quite wide latitude to make choices. But they were still constrained to pursue organisational purpose (rather than their own whims or private interests) by the hierarchy above them.

Some people worry that giving more authority could lead to abuse of power, so how can organisations balance authority with democratic accountability?

Accountability mechanisms are definitely important. But not every organisation needs to be a democracy. Inside the organisation, the primary accountability mechanism should be a well-functioning hierarchy, with oversight and understanding systems that hold managers responsible for detecting and dealing with bad behaviour, such as fraud or harassment. But then, organisations themselves need to be held accountable to ensure their purpose is aligned with what society accepts. My view is that this alignment is best ensured by democratic mechanisms for making and enforcing laws, which may include delegating authority to regulatory agencies or the police, but which ultimately places the decisions about what is or is not acceptable in the hands of the voting public. But other mechanisms might serve the same functions. In some theories, the threat of war or rebellion creates incentives for good government. But this obviously does not always work.

Modern organisations frequently give leaders responsibility without real authority. How does this gap influence decision-making and performance?

Responsibility without authority is a terrible mix. There is a quote in the book from Edmund Burke, who detected this problem in the aftermath of the French Revolution. If you have responsibility but lack the authority to execute, you will either get nothing done or be forced to deliver by taking shortcuts that can have disastrous consequences. It results in poor quality outputs and places undue pressure on staff, ultimately leading to low morale and burnout.

People sometimes resist decision-making authority even while complaining about too many rules. Why do individuals feel uncomfortable with that responsibility?

Well, it probably depends a bit on cultural habits. In societies like New Zealand’s, which is quite egalitarian and conflict-averse, people often find it uncomfortable to tell others what to do, or to point out that their work was not up to standard. So, they prefer to be able to point to a rule book or set of independent, supposedly objective standards, as a kind of backup. And of course, if you don’t exercise personal discretion, you are less to blame if things go badly.

If organisations or governments want to reduce “stupid rules,” what practical steps should they take first?

The first place to look is probably the areas where rules (including standards) or procedural requirements have grown lengthy and complex. The ten-page dress code that General Motors used to have is a light-hearted example. It was reduced to two words: ’dress appropriately’. A simple rule, but it needs a dose of authority as a backstop. In technical areas, there could well be a need for complexity and detail. But if detailed standards and procedures appear to be trying to specify and standardise things that are really context-specific or uncertain, then rule proliferation or increasingly detailed formalised standards could well be replaced with something much simpler: a basic statement of purpose. That allows people the discretion to exercise their professional judgement and skill at all levels in the hierarchy.

The post Responsibility without authority fails, says Professor Natasha Hamilton-Hart appeared first on International Finance.

International Finance asked Thomas Engelmann, Head of Energy Transition at KGAL Investment Management GmbH & Co., regarding what should be the ideal implementation roadmap for “ReFuelEU Aviation.” Engelmann-led KGAL invests in energy transition-related projects and companies working in the domain. Thomas also acts as Managing Director for PtX Development Fund, the Power-to-X GmbH.

Previously, he was Global Head of Transaction and Investment Management, Infrastructure Equity, at Allianz Global Investors GmbH. Between 2008 and 2013, he worked for KGAL as Senior Director in the Renewable Energies and Infrastructure department, helping to build up the Renewable Energies portfolio. Engelmann gained his in-depth industry experience through various global senior management positions at Siemens AG and Siemens Financial Services (SFS).

He has held leadership positions in corporate M&A, as commercial director of industrial power plants, and as senior investment director, which show his significant know-how in technology-driven sustainable impact investments. He holds a Master’s in Business Administration and was a member of the Siemens Technical Graduate Programme. He is also a qualified Chartered Financial Analyst (CFA) and a Chartered Alternative Investment Analyst (CAIA).

Synthetic sustainable aviation fuel is in the spotlight as European airlines prepare to challenge the EU’s 6% usage mandate by 2030. What is your view on this?

Understandably, airlines are concerned about costs and competitiveness. But the direction of travel is clear: decarbonising aviation requires scaling sustainable fuels, and some of the cost will ultimately be reflected in ticket prices.

Against geopolitical uncertainty and accelerating climate impacts, the EU’s 2030 targets are a key part of improving both climate performance and energy resilience. ReFuelEU provides a predictable timeline — what matters now is execution across the value chain.

European carriers may face penalties by the end of 2026 for missing emission targets. With the sector already under strain from the Middle East crisis, will this EU rule add further pressure?

ReFuelEU places the formal compliance obligation primarily on fuel suppliers: if blending requirements are not met, penalties apply at that level. Airlines buy the blended fuel, so the impact is mainly through fuel prices.

The practical way to reduce pressure is to lock in supply early. Long-term offtake agreements between fuel suppliers and SAF/e-SAF producers help bring projects to financial close, scale production, and avoid penalties and volatility.

In December 2025, IATA projected just 2.4 million metric tonnes of SAF availability in 2026, about 0.8% of total aviation fuel demand. Is the 2030 target realistic given this slow growth?

For conventional, biogenic SAF, the ramp-up is feasible because the pathways are proven and projects are already delivering volumes, especially from waste-based feedstocks.

The tougher part is e-SAF (synthetic fuels). Those projects are capital-intensive and typically need long-term purchase commitments to secure financing. If the industry converts the mandate into bankable offtake contracts now, the 2030 target is achievable. If not, supply will remain constrained.

The EU began phasing out free carbon permits for airlines in 2025. Will this make the transition to SAF significantly more expensive for carriers?

Phasing out free allowances will make carbon costs more visible, and part of that will be reflected in fares. That said, the transition to lower-carbon fuels cannot be postponed if aviation wants to deliver real CO2 reductions this decade.

As a rough order of magnitude, meeting the 2030 blending targets could add around €20 to a typical return ticket, with variation by route and fare type. For very low fares, the percentage impact can look larger — but delaying action risks higher costs and a more abrupt adjustment later.

Aviation also has an important advantage: meaningful emission reductions are possible through fuel switching without waiting for a full fleet renewal. Other industries must invest in parallel into the production progress (e.g. green steel production facilities).

SAF is central to aviation’s 2050 decarbonisation goals, yet production remains limited. What key factors are holding back supply?

The bottleneck is not the mandate — it’s the speed at which long-term offtake agreements are signed. Those contracts are what unlock financing and investment in new production capacity, especially for e-SAF.

Biogenic SAF can scale where sustainable waste feedstocks are available at a competitive cost. e-SAF needs new, capital-intensive plants and typically requires 10-year purchase commitments to reach financial close.

In short: stable policy plus bankable contracts equal new supply. Without contracts, projects slip, and volumes for 2030 remain out of reach. The prices per tonne can only go down, if scale effects are kicking in.

IATA has criticised the EU’s SAF mandate as costly and constrained by limited regional availability. Should the EU reconsider its 2030 target?

In my view, the EU should keep the 2030 target stable. Changing the rules now would undermine confidence and slow investment just as the market is starting to scale.

Today’s aircraft can already use blended fuels. SAF is one of the fastest routes to near-term CO2 reductions in aviation. Europe also has strong strategic reasons to build domestic e-SAF capacity and reduce dependency.

The priority is execution: convert mandated demand into long-term purchase commitments, bring projects to financial close, and build supply.

A 2025 Boston Consulting Group report found that airlines are allocating only 1% to 3% of their budgets to SAF. How much more investment is needed to scale up effectively?

Most of the investment need is upstream — in new SAF and especially e-SAF production capacity — rather than on airline balance sheets. Airlines will mainly feel the effect through fuel prices and supply contracts.

To give an illustration, meeting the 2030 e-SAF ramp-up in Europe likely requires multi-billion-euro annual fuel purchase commitments and double-digit billions in capital investment for new plants. The exact numbers depend on technology, electricity prices, and project location.

What turns those figures from “aspirations” into steel in the ground is straightforward: long-term, bankable offtake agreements.

What about claims by airlines that fuel producers are inflating SAF prices while failing to scale supply?

In the short term, prices are being shaped by tight supply, regulatory uncertainty, and high financing costs for new projects. The real question is whether higher prices are accompanied by measurable progress in contracted volumes and delivered supply.

To reduce both costs and volatility, the market needs transparency and long-term contracts that enable producers to invest. Clear certification and reporting also help ensure that SAF premiums are linked to verified blending and emissions reductions.

Willie Walsh, the Director-General of the IATA, has argued that transporting SAF to Europe could increase its overall carbon footprint. Do you agree with this concern?

Transport emissions matter and should be reflected transparently in lifecycle accounting. But that does not automatically argue against imports — it argues for smart supply chains and robust sustainability criteria.

At the same time, Europe should scale domestic SAF and e-SAF capacity wherever feasible. Otherwise, it risks trading one dependency for another. One- third of SAF and e-SAF production in Europe should be feasible.

To meet the 2030 target, should stakeholders, including the EU, IATA, and airlines, collaborate on a revised and unified roadmap?

Stakeholders should align on implementation—but within a stable policy framework. Reopening the mandate would create uncertainty and likely slow investment in a market that still needs scale.

The most useful “roadmap” is practical: long-term contracting, clear certification and reporting, infrastructure readiness, and mechanisms that accelerate bankable e-SAF projects. If we want supply to grow, we need to turn targets into purchase commitments that projects can finance against.

Done well, this is not only a climate policy — it is also an industrial and energy resilience opportunity for Europe.

The post Clean flight needs fuel scale: Thomas Engelmann appeared first on International Finance.

Trade group Airlines for Europe (A4E) has taken an adversarial stand against the SAF norms. Calling eSAF a ’nascent technology,’ A4E said projects would only produce 0.7% of volumes needed to meet the climate targets set by EU for the industry.

The use of eSAF falls under the “ReFuelEU Aviation” initiative, that sets requirements for aviation fuel suppliers to gradually increase the share of SAF blended into the conventional aviation fuel supplied at EU airports. The rule made it mandatory for regional airports to have 2% SAF in their overall fuel mix, a ratio which must rise to ⁠6% in 2030. By 2050, every European airport should have 70% SAF in their fuel mix.

Hurdles to eSAF

As per the aviation industry, the supply of synthetic jet fuel is not abundant, and the planned production facilities won’t come online any time soon to meet the mandate.

While cooking ⁠oil and animal waste have been the preferable raw materials for the fuel, the resultant SAF costs three to five times more than traditional jet fuel, while making up a paltry 0.3% of global jet fuel supply. The synthetic version (eSAF) is made from renewable energy sources, like captured carbon dioxide or green hydrogen, which too are expensive.

Another vocal critic has been the European Regions Airline Association (ERA). In October 2025, ERA stated that the policy’s implementation would create structural disadvantages for smaller regional carriers. The association revealed that the SAF’s supply is massively concentrated at the major European aviation hubs, leaving smaller, regional airports without access, thereby exposing Europe’s most remote communities to rising costs, complex compliance burdens, and the risk of reduced connectivity.

Even the International Air Transport Association (IATA), the industry’s apex trade association, is not impressed by ’ReFuelEU Aviation’. Willie Walsh, the Director-General, publicly panned the policy, by stating, “SAF production growth fell short of expectations as poorly designed mandates stalled momentum in the fledgling SAF industry. If the objective is to increase SAF production to further the decarbonisation of aviation, then they need to learn from failure and work with the airline industry to design incentives that will work.”

“Fuel costs remains a key driver of airline profitability, accounting for roughly 30% of operating expenses. Any increase, whether linked to SAF or other factors, naturally draws close attention. The recent Iran crisis is a good illustration of how sensitive airlines are to fuel price fluctuations. A4E recently pointed out that scaling SAF successfully will require not just higher production volumes, but also lower production costs and thus lower prices. For the EU’s ambitions to materialise, attracting private investment will be essential, which in turn depends on clear and stable market conditions for project developers,” according to Catherine Galano, Executive Director at Frontier Economics, and Stefan Rohm, Senior Principal at Frontier Economics.

Free carbon permits effectively mean that using fossil fuels carries no additional cost. As these permits are phased out, the cost of inaction increases.

This changes the equation: the cost gap between fossil jet fuel and SAF narrows, which can support SAF uptake. Over time, rising carbon prices combined with more efficient SAF production could even make fossil fuels more expensive than their decarbonised alternatives.

That said, this does not fully address competitiveness concerns. Policy measures need to be designed as part of a coherent and consistent overall framework.

Dishing out the mathematics

As per the IATA’s updated estimates for Sustainable Aviation Fuel (SAF) production, in 2025, SAF output was expected to reach 1.9 million tonnes (2.4 billion litres), nearly double the 1 million tonnes produced in 2024. In 2026, production growth is projected to slow, reaching 2.4 million tonnes.

Despite this increase from the 2024 tally, SAF will account for only 0.6% of total jet fuel consumption in 2025, rising to 0.8% in 2026. At current prices, the SAF premium was estimated to add approximately $3.6 billion in fuel costs for the airline industry in 2025.

“Mandates in the EU and UK have failed to accelerate SAF production and adoption. In Europe, ReFuelEU Aviation has sharply increased costs amid limited SAF capacity and oligopolistic supply chains. Fuel suppliers have raised profit margins so that airlines pay up to five times the price of conventional jet fuel and double the market price of SAF, without guaranteeing supply or consistent documentation. In the UK, SAF mandates have also triggered price spikes, forcing airlines to absorb significant costs. In total, airlines paid a premium of $2.9 billion for the limited 1.9 million tonnes of SAF available in 2025,” according to the report.

“Competitiveness is a legitimate concern for European carriers, especially when compared with airlines based outside Europe. This is at the core of arguments that SAF rules risk creating an uneven playing field. That said, it is important to consider what alternative Net Zero policies may be and wider implications for the sector. We find that alternative narrative oftentimes rely on the reduction of demand as a decarbonisation lever, which would ultimately harm the entire sector, including passengers. From an economic perspective, incentives matter. Penalties can encourage faster investment in SAF, fleet renewal, or innovative business models. In that sense, they can also create an opportunity for European carriers to be trailblazers, as suggested in the Draghi report. This does not mean regulatory distortions disappear. There is still a strong case for funding mechanisms to support the SAF value chain and for continued R&D in aeronautics. These tools can help share risks and sustain competitiveness over the medium to long term,” according to Catherine Galano and Stefan Rohm of Frontier Economics.

“In the EU, a lack of financial support, specifically for more nascent technologies like those used to produce cellulosic SAF and e-fuels is limiting SAF supply. We call these nascent technology fuel pathways ’advanced SAF’. In a 2025 study, we find that lack of revenue certainty is the primary barrier for advanced SAF production coming online in the EU. High upfront capital costs and market uncertainties continue to delay final investment decisions,” Chelsea Baldino, Fuels Program Lead at The International Council on Clean Transportation, told while speaking with International Finance.

Airlines also have a role to play. In that respect, it is encouraging that A4E has not ultimately challenged the 6% mandate as strongly as initially feared. Walsh sees a SAF supply shortfall, and that, in his opinion, will force airlines to review their 2030 SAF commitments.

“Regrettably, many airlines that have committed to use 10% SAF by 2030 will be forced to re-evaluate these commitments. SAF is not being produced in sufficient amounts to enable these airlines to achieve their ambition. These commitments were made in good faith, but simply cannot be delivered,” he observed.

Walsh also said that transporting SAF to Europe could increase its overall carbon footprint.

On this, Catherine and Stefan told International Finance, “From an economic perspective, SAF should be produced where it is most cost-effective and abundant, considering the footprint of logistics as well as the decarbonisation performance of various fuel types. For instance, importing competitively priced eSAF with higher emissions reduction potential could, in some cases, deliver greater overall benefits than relying on alternatives such as HEFA produced locally.”

“That said, the carbon footprint of imports does support the case for developing a European SAF value chain. More broadly, energy sovereignty and security, highlighted by the Ukraine and Iran conflicts, also strengthen the argument for domestic production,” they remarked.

Also, EU is reportedly mulling over completely phasing out free carbon emissions allowances for the aviation sector, moving to full auctioning by 2026 to align with climate goals.

SAF production: A Bumpy Ride

A study from the International Council of Clean Transportation (ICCT), published in October 2025, found SAF costing between two to five times more than fossil jet fuel, with mechanisms like public and private investment and cost sharing being crucial for building a deep ecosystem, that will in turn make airlines’ green transition a budget-friendly one.

“Although SAF can be made from many different materials and conversion processes, all of them are currently costlier than fossil jet fuel. The European Union Aviation Safety Agency estimated that the average production cost of SAF in 2024 ranged from €1,461 per tonne (for biofuels) to €7,695 per tonne (for e-fuels). We calculate that this is a cost premium of 2.1–10.6x compared with fossil jet fuel by converting fossil jet production costs from the International Energy Agency, reported in US dollars per litre, into equivalent units,” according to the report.

“Meeting EU targets will require what could be described as an ‘investment shock’ to scale production capacity. Today’s SAF output, despite exceeding the EU’s 2% mandate in 2025, is largely based on biofuels such as HEFA, which face feedstock limitations and are unlikely to cover more than about 10% of global demand even under optimistic assumptions. Given the scale of investment needed, attracting private capital is critical. But investors need long-term visibility on demand and revenues. This is precisely what mandates and penalties are designed to provide. The current slow growth could mean that the signal from mandates is still too weak. But it may also reflect uncertainty about how firmly these policies will be enforced. This highlights the importance of regulatory stability, alongside targeted support mechanisms to improve project financeability,” Catherine and Stefan told the International Finance.

Investigating the reason behind SAF’s high price, ICCT found a correlation with high value of feedstocks that power the production. Virgin vegetable oil is more expensive than kerosene. Making waste-based SAF, on the other hand, with high cellulosic content is expensive due to inefficient supply chains for sourcing raw material and the enzymes needed to break down feedstocks into “’drop-in’” fuel.

eSAF requires high quantities of renewable electricity to produce renewable hydrogen (i.e., hydrogen produced via electrolysis using 100% renewable electricity) and extract diluted carbon dioxide from the atmosphere.

Then add the project mismanagement. As per ICCT, SAF projects take minimum five years to reach final investment decision (a critical stage during project development that indicates whether projects are ready to move forward to construction), and many projects fail before reaching this stage. The ratio of SAF projects reaching final investment decision, as per consulting group BCG, was at dismal 30% in 2025.

Noting that helping advanced SAF producers reach financial investment decision in the EU is an urgent priority for the bloc’s policymakers, Baldino remarked, “The EU’s Sustainable Transport Investment Plan (STIP) announced several measures the EU is taking to address economic issues. The Commission will launch pilot projects, including one that sets up a double-sided auction for e-SAF. This double-sided auction will establish a “’market intermediary’” that connects SAF suppliers and consumers, offering long-term contracts to provide revenue certainty to fuel producers as well as short-term contracts on the offtake side. The Commission also commits to assessing the feasibility of an EU-wide double auction to support both aviation and marine sustainable fuels. If designed and implemented quickly, such measures could provide the certainty needed to get today’s advanced SAF projects off the ground and accelerate progress toward fulfilling ReFuelEU SAF targets.”

While the ICCT study validated IAF’s apprehensions about SAF shortfall, Boston Consulting Group’s March 2026 estimates couldn’t promise a better future either.

The report, prepared after interviewing more than 500 executives at about 200 aviation-related companies, found that airlines and airports are investing only 1% to 3% of revenue or budget allocation to SAF, with high production costs and fuel prices remaining the major challenges to adoption.

“While SAF supply increased 1,150% worldwide over the last three years, announcements for new production facilities fell by 50% to 70% from 2022 to 2023, largely due to economic uncertainty, and higher energy and operating costs,” BCG stated, while projecting the fuel’s supply to fall 30% to 45% short of commercial aviation’s 2030 targets.

Giving their take on the BCG report, Catherine and Stefan said, “Airlines are only one part of the investment landscape. Aircraft and engine manufacturers, airport operators, and private investors are also contributing. Public funding – through EU instruments like the Hydrogen Bank or national programmes – already plays a role as well. Beyond reducing uncertainty, the key challenge is how to allocate risk efficiently across all these stakeholders. Incentives and risk-bearing capacities differ along the value chain. Airlines are central because they ultimately drive demand, but they are not the only actors that matter.”

All the studies had one thing common: they pointed out the massive cost of E-kerosene and other SAF raw materials.

Baldino answered, “There are several options for the EU to address these economic concerns. First, the ETS includes a mechanism where 20 million allowances from the ETS go towards reimbursing airlines to cover a percentage of the price gap between SAF and fossil fuels between 2024 and 2030. Assuming an EU-ETS price of 80 €/tCO2e, the total subsidy fund would come to €1.6 billion. However, given that the vast majority of SAF on the market is commercial Hydro processed Esthers and Fatty Acid (HEFA), and the programme only runs until 2030, it is likely that most, if not all, of this ETS funding will not help close the cost gap for advanced SAF. The ETS is currently under review, though, so the Commission has an opportunity to expand the SAF allowances programme and earmark some of the SAF allowances for advanced SAF pathways.”

EU presses ahead

Despite industry concerns, it seems that EU is in mood to slow down on its SAF game. It has already launched the “’eSAF Early Movers Coalition’,” bringing together member states that have committed to scaling up the fuel’s production. Austria, Finland, France, Germany, Luxembourg, Netherlands, Portugal and Spain have so far announced their participation, with the goal of mobilising at least €500 million ($580 million) for large-scale eSAF projects.

In December 2025, one of Europe’s leading SAF innovators, Metafuels, awarded construction firm McDermott a contract for its eSAF plant in Rotterdam. Metafuels will construct the plant at the Evos terminal in the Port of Rotterdam. It will utilise Metafuels’ high-yield methanol-to-jet technology, “’aerobrew’,” and serve as a blueprint for large-scale eSAF production across Europe.

Finnish venture Liquid Sun too launched what it claims is Europe’s eSAF pilot plant in Espoo. The unit will convert biogenic carbon dioxide and hydrogen produced with renewable electricity into synthetic crude oil, which will be then refined into eSAF.

Yes, the continent is scaling up its eSAF efforts. But, two questions remain: Will enough eSAF be available to each and every European airport by 2030? Will the green journey be budget-friendly for both airlines and the passengers?

The immediate priority for the EU will be to take the aviation sector stakeholders into confidence, and make sure that the journey to a carbon-free future remains on track.

The post SAF is new flashpoint between EU and airlines appeared first on International Finance.

AI took centerstage in the event, with Huawei introducing an in-car voice-activated agent dubbed Celia. CATL, on the other hand, grabbed headlines through its flying car concept, apart from displaying a lighter-weight product offering over 1000-km range, with the product reportedly possessing charging capability from 10% capacity to 98% in under seven minutes.

The Chinese electric vehicle giant BYD rewrote the innovation playbook, by making a giant freezer the main piece of attraction in its pavilion. Inside of the freezer, a car dripping with icicles showed the company’s new fast-charging system’s ability to power up a battery even in temperatures of -30° Celsius.

Western automakers up for collaboration

Despite the Chinese automobile industry being known for its brutal price wars and overcapacity, both Chinese companies and their foreign counterparts are gung ho about their prospects.

Germany’s Volkswagen, the largest overseas automaker by market share in the world’s second-largest economy, unveiled its new electric ID.UNYX 08. It has tied up with Xpeng to develop the vehicle’s electrical architecture, while Horizon Robotics took part in realising the in-car AI agent.

Huawei, in 2026 alone, will be investing 18 billion yuan ($2.6 billion) in smart driving research and development. Its software and components are currently used in some 50 models, with the company anticipating the number to double to 100 by the year-end. CATL, which increased its research budget by 19% to $3.2 billion in 2025, will be raising another $5 billion in the coming days.

Despite industry profit falling 18% in Q1 2026, along with dipping sales profit margin, revenues and outputs, the Chinese automotive sector is in no mood to back down on the R&D front, while foreign automakers are collaborating with local ecosystem players to ramp up their technology game in the biggest global car market.

Many of the vehicles, which made their debut in Beijing Auto Show, will likely end up being in European markets in the coming days.

“The stronger presence and engagement of global companies at the Beijing Auto Show highlights China’s rising importance as a centre for automotive innovation, and one of the world’s fastest-evolving car markets, especially as the industry speeds up its transition toward electric and smart mobility technologies,” Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), told the Global Times.

There was a change in tone among Western automakers during the auto show. Andreas Mindt, Volkswagen’s Head of Design, dubbed the event as ‘arguably the world’s largest’, while noting positive developments like more participants, global premieres, and new car launches, alongside rapid progress in EVs, battery technology, and self-driving systems.

“Volkswagen Group has been part of Auto China since 1990. No other international automotive player has such a great history like we have in China. China is like a fitness centre for the automotive industry. We saw it, we embraced it, and we changed ourselves,” said Oliver Blume, the German automaker’s CEO.

Volkswagen, with the goal of defending its position as China’s top-selling foreign automaker, will be launching over 20 new energy vehicle (NEV) models in the world’s largest vehicle market, a tally which will reach around 50 by 2030.

Volkswagen’s German peer, Mercedes-Benz, too is making electrification and intelligent technologies as pivots of their vehicle line-ups in China, while putting equal focus on luxury and high-end custom offerings.

As per Cui, the increasing engagement between global automakers and their Chinese counterparts only shows the evolution of the world’s largest vehicle market as a key hub for innovation, testing, and competition across new ideas, products, and business models.

“More and more domestic and overseas car brands are putting more investment into electrification, a move that clearly demonstrates there is no such thing as ‘overcapacity’ because the market demand is huge and expanding,” he noted.

US opting for tested protectionism

While the Beijing Auto Show gave a glimpse of the changing reality of the global automobile sector, with European automakers now seeing their Chinese counterparts as peers more than rivals, their American counterparts have taken a different direction.

Ford CEO Jim Farley doesn’t want Chinese companies on American shores, citing the move to be ‘devastating’ to domestic manufacturing. General Motors boss Mary Barra shares this view. In early 2026, she called the deal by Canada to allow Chinese EVs into the North American country a risk to the continent’s auto manufacturing sector, jobs and national security.

Both Farley and Barra found support within the Alliance for Automotive Innovation (AAI). AAI, that represents the US Big Three (General Motors, Ford Motor Company and Stellantis) and several other US manufacturers, has been stating that China poses a real threat to the American automotive sector.

In December 2025, AAI had urged Congress to maintain the Joe Bidenera ban on import of certain Chinese technologies and software, including vehicles produced in the world’s second-largest economy.

As per Rivian CEO RJ Scaringe, two factors: extremely low cost of capital due to heavy government subsidies and equally cheaper labour costs, compared to the figures in the United States, are giving Chinese EVs massive advantages over their Western counterparts. While current American tariffs do help balance prices and protect US manufacturing, Scaringe still wants a long-term protectionist solution.

Farley previously described Chinesemade cars as an ‘existential threat’ to the US auto market, citing technological advances, along with subsidies and labourinfrastructure support that reduce production costs. Despite Washington imposing tariffs of over 100% on Chinese vehicles, the Ford CEO strictly advised the Donald Trump administration against changing import rules, as China manufacturing EVs in the US will end up affecting American automakers on consumer price points.

As per Bloomberg data, in 2025, BYD surpassed Ford in total global vehicle sales, by dispatching approximately 4.6 million units, while Ford’s global wholesales declined nearly 2% to 4.4 million units.

However, there is an irony. Ford reportedly discussed the potential of joint ventures between the American auto company and Beijing-based Xiaomi with President Donald Trump, with the plan of allowing China to manufacture electric vehicles in the United States and sell them through a US-controlled joint venture. Ford denied the reports.

Ford also held talks with BYD to expand battery-supply partnerships, and explored manufacturing collaborations in Europe with Hong Kong-based Geely Automobile Holdings.

In January 2026, in the middle of the US-Canada trade war, Canada granted China an annual quota of 49,000 EVs, while stating that vehicles within this quota would enjoy the most-favoured-nation (MFN) tariff rate of 6.1% and be exempted from the 100% additional tariff.

The move from the Mark Carney government had one motive: catalysing considerable new Chinese joint-venture investment in Canada, with Ottawa itself taking the lead by working with Chinese auto manufacturers on timely vehicle certifications.

However, both Washington and Ottawa have an intertwined supply chain, with car parts and vehicles moving with ease under trade pacts first enacted three decades ago. China’s entrance in North America is bothering Uncle Sam given the fact that Canada is a major sales driver for Detroit’s carmakers. In 2025, Ford Motor, GM and Jeep maker Stellantis sold more than 700,000 vehicles combined in Canada.

Things have changed in Trump 2.0, with Canada’s auto industry taking a massive hit due the Trump administration levying tariffs on vehicles and parts made there. American automakers, to save themselves from the punitive measure, scaled down manufacturing in the neighbouring country.

Chinese players have jumped in to fill the void. As per reports, Chery, by end of April 2026, shipped the first vehicles to the North American country, including J5 from the sub-brand Omoda and Jaecoo. BYD, in March, registered its passenger vehicle manufacturing plants with Transport Canada’s Appendix G preclearance registry, the first Chinese automaker to do so in the Northern American country’s consumer vehicle segment. Expect others to follow suit.

There has been opposition against the Canada-China EV deal. CVMA (Canadian Vehicle Manufacturers’ Association) President Brian Kingston, apart from warning about Chinese automakers benefiting from ‘weak or non-existent labour rights’ that suppress wages and distort competition, informed the House of Commons that the 49,000-vehicle quota is “equivalent to 30% of the total number of EVs sold in Canada last year”. The lobby group has also backed the Conservative Party’s proposal to scrap the Chinese EV quota.

However, what is trumping these concerns is the vehicle buying preference of the Canadians. A poll by Nanos Research Group for Bloomberg News, conducted among 1,009 Canadians in early 2026, saw 53% of the participants stating the China factor would have no effect on their buying decision.

An intense battle ahead

A rare political consensus was witnessed on April 28, with more than 70 Democrat lawmakers urging Trump not to permit Chinese automakers to build or sell cars in the United States, with the urge of “not ceding the American auto industry to a strategic competitor ⁠intent on global dominance” emerging as the common theme.

The following day, Republican Bernie Moreno and his Democrat colleague Elissa Slotkin introduced bipartisan legislation to harden the American ban further. These political actions might have been triggered by Trump’s January statement, in which he expressed his openness to Chinese automakers building vehicles in the United States.

However, warning signs have already started showing up. Despite Pete Hoekstra, US Ambassador to Canada, announcing that Chinese-made EVs entering Canada will be barred from crossing into the United States, a Daily Mail report claims that ‘cheap Chinese Cars’ have been spotted in Texas towns bordering Mexico, despite a January 2025 executive order (that banned building or selling of Chinese vehicles in the US).

“Chinese-manufactured vehicles are legal in Mexico. El Paso residents are just miles from the southern border and have seen Chinese vehicles, such as Geely Auto and BYD, slip into the city,” according to the report. The information, if authenticated, could unsettle policymakers and industry players.

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