New measures to help the UK take-off as world-leader in
Sustainable Aviation Fuel (SAF), supporting the growth in the
industry and jobs across the country were introduced today in
Parliament (Wednesday 14 May).
With decarbonisation key to accelerating expansion plans, the
Government has also announced an additional £400,000 of funding
for producers so that new clean fuels can get to market quicker,
speeding up the UK's path to green flying.
SAF is an alternative to fossil jet fuel which reduces greenhouse
gas emissions on average by 70% on a lifecycle basis. While the
fuel is more costly to produce than jet fuel, the Government's
SAF measures protect industry and consumers from excessive costs.
In addition, the Revenue Certainty Mechanism (RCM) will keep
ticket price changes minimal – keeping fluctuations to £1.50 a
year on average – and will be industry funded through a levy on
aviation fuel suppliers. The Department for Transport will
continue to engage with industry on the details of the RCM,
including pricing.
A new round of Government funding is also being announced, to
offer fuel producers a share of £400,000 to support the testing
and qualification of green fuels, helping to get them to market
quicker. This support for producers follows £63 million of
funding made available through the Advanced Fuels Fund this year.
Taken together, the Government's commitments on green fuels will
help deliver on its missions to kickstart economic growth via job
creation, become a clean energy superpower, and will allow
the UK to go further and faster with expansion plans,
giving a boon to the tourism industry.
Aviation Minister, said:
“I want to see a golden age for green aviation and today sees
take-off for sustainable flights.
“Aviation continues to be one of the fastest growing and most
integral parts of the UK's economy, offering more jobs across
engineering, tourism and hospitality – and as we support aviation
expansion, we need to move at full throttle towards
decarbonisation.
“We are making the UK one of the best places in the world to
produce sustainable aviation fuel, putting the pedal down on
growth and boosting job opportunities across the country as part
of the Plan for Change.”
The new legislation will help industry meet its requirements
under the SAF mandate, introduced in January this year, which
specifies that at least 10% of all jet fuel used in flights
taking off from the UK from 2030, be made with sustainable fuel,
rising to 22% by 2040.
The new financial mechanism is another display that the UK is
rock-solid in its commitment to building a prosperous hub for
homegrown sustainable fuel production. Furthermore, this vital
update provides SAF producers and the industry at large the
confidence and stability to plough investment into clean
energy.
The Government's approach on low carbon fuels could add up to £5
billion to the economy by 2050 and position the UK as a global
hub for SAF production.
Tim Alderslade, Chief Executive of Airlines UK,
said:
“This is a welcome announcement given the
importance of the RCM to commercialising and scaling-up SAF
production in the UK, a technology key to decarbonising aviation
by 2050. A UK SAF industry, kick-started by the RCM and SAF
mandate, can create tens of thousands of jobs across the country
whilst supporting our world-class aviation sector to deliver
economic growth.
“We look forward to working with Government on scheme design and
how contracts are allocated, so that we balance the need to
deliver the SAF required to support mandate compliance, whilst
keeping costs as low as possible through a competitive and
transparent bidding process that places the consumer at its
heart.”
, Chief Executive of
Sustainable Aviation, said:
“We hugely welcome the publication of this
important legislation. SAF is a crucial element in the plan to
decarbonise aviation as it can be used in existing aircraft with
existing infrastructure. The challenge now is to scale the
industry, ensuring we have enough SAF to meet the mandate whilst
keeping costs low and create thousands of jobs in the process.
This legislation will help to do
that.”
Notes to Editors:
- On Wednesday 14 May, the Secretary of State for Transport
will lay the SAF Bill in Parliament, taking another step towards
delivering the Revenue Certainty Mechanism (RCM).
- The RCM provides price certainty, helping ensure a steady
income flow for producers, even if the price of SAF fluctuates.
This will unlock investment in UK SAF production, provide good
green jobs, and help us reach our climate change targets.
- The mechanism operates by SAF producers signing a contract
with a counterparty (wholly owned by government) that guarantees
a price (the ‘strike price') for the eligible fuel they sell. If
producers sell SAF above the strike price, they pay the
difference back to the counterparty. However, they are protected
when the market price falls below the strike price and the
counterparty pays the producer the difference.
- This round of SAF Clearing House funding opens on 14 May and
will close on 1 September 2025.
