The latest issue of SEB's Sustainable Finance Outlook presents insights on how the war in the Middle East is accelerating the global energy transition. The report also explores sustainable financing of clean alternatives to fossil fuel in the chemical, transport and logistics sectors, and highlights the impacts of carbon and sustainable aviation fuel costs on Europe's aviation sector.  

"Europe is, for the second time in 5 years, suffering from its dependence on other countries energy supplies." says Thomas Thygesen, Head of Strategy and ESG in SEB Equity Research at SEB. "The long-term effect is likely to be an accelerated transition to a non-fossil energy system and an electrified transportation system. Grids and batteries are the bottlenecks and face an investment supercycle as a result."  

"The closure of the Strait of Hormuz has also exposed how deeply embedded oil is in many other parts of our mass production economy like jet fuel, chemicals, plastics or fertilizers," says Thygesen. "Alternative fuels are needed for those activities that cannot be directly electrified". 

The report also features an update on the sustainable finance market and sustainable aviation.  

"Despite rising geopolitical tensions, global sustainable bond issuance reached USD 503 billion in Q1 2026, marking a 14% increase year-on-year," says Samantha Arpas, Sustainable Finance Specialist at SEB. "Sustainable bond issuance by the chemicals, airlines, and transportation & logistics remains below 1% of the broader market, indicating the challenges of scaling alternative fuels." 

"Since the war began, kerosene prices have nearly doubled." says Gregor Vulturius, Lead Scientist and Senior Advisor in Climate & Sustainable Finance at SEB. "With the industry now fully exposed to carbon pricing, airlines are being forced to rethink how they diversify and decarbonise their jet-fuels."  

"Sustainable fuels are more expensive than conventional fuels, and together with rising carbon cost will put considerable pressure on airlines' finances," says Gregor Vulturius. "The aviation sectors ability to mitigate rising costs will rely on pass-through to customers, fleet network optimisation, policy certainty, and improved access to competitively priced SAF and carbon removals." 

About the Sustainable Finance Outlook

The Sustainable Finance Outlook delivers insights and market intelligence for navigating the sustainability transition. Issued four times per year, the report engages a readership exceeding 3000, comprising financial institutions, corporates, and decision-makers within SEB's primary markets.