Department for transport announces new sustainable aviation fuel initiatives

After the announcement made in the King’s Speech last week that a bill will be introduced to support sustainable aviation fuel (SAF) production, the Department for Transport and Rt Hon Louise Haigh MP announced yesterday that, subject to Parliamentary approval, they will introduce and confirm the full policy details of a SAF mandate to start from 1st January 2025. This would make the UK one of the first countries worldwide to implement such a legislation. 

The statement claimed: “Developing, using and producing SAF will help drive our missions to kickstart economic growth and make Britain a clean energy superpower, delivering the government’s manifesto commitment to secure the UK aviation industry’s long-term future, including through promoting sustainable aviation fuels.” 

The production of sustainable aviation fuel is predicted to contribute over £1.8 billion to the economy and create more than 10,000 jobs nationwide, aiding in decarbonisation efforts. The SAF mandate will boost demand for SAF in the UK, enabling emission reductions of up to 2.7 MtCO2e by 2030 and up to 6.3 MtCO2e by 2040. This mandate will also instill investor confidence, affirming the UK's position as a hub for the production, use, and supply of SAF. 

The SAF mandate will commence in 2025, starting at 2% of the total UK jet fuel demand and gradually increasing to 10% by 2030 and 22% by 2040. The 22% requirement will stay in place beyond 2040 until there is greater certainty about SAF supply. 

The mandate aims to encourage innovation in advanced fuels that offer higher emission reductions and diversify feedstocks to reduce dependence on scarce resources, through key provisions such as a cap on the feedstocks used in the hydro-processed esters and fatty acids (HEFA) process, a separate obligation for power-to-liquid fuels, a buy-out mechanism for both the main and power-to-liquid obligations to incentivize SAF supply while protecting consumers if suppliers cannot secure SAF, and a review mechanism to minimize the impact on passenger ticket prices. 

The bill will introduce a revenue certainty mechanism (RCM) for SAF producers, encouraging investment in new UK plants. This builds on the SAF mandate by creating demand and setting usage targets for fuel suppliers. The RCM will reduce investment risk and boost investor confidence in UK SAF plants, and increase the likelihood of SAF plant construction, securing SAF supply for UK airlines and enhancing energy security. 

The SAF mandate and RCM initiatives aim to drive economic growth and position Britain as a clean energy superpower. 

Find out more here.