To boost the UK’s production of sustainable aviation fuel (SAF), the government has promised to implement a revenue certainty mechanism. The goal is to have industry funding for this.
According to our strategy, which is subject to parliamentary time, this system can be implemented by the end of 2026. In order to further encourage investments in SAF in the UK, the government has proposed an amendment to the Energy Bill that pledges to consultation on potential possibilities for an income certainty system.
The UK should play an essential part in the development, manufacturing, and deployment of SAF because the government recognizes the strategic value of the UK sustainable aviation fuels economy and intends to see the UK take a significant portion of the worldwide SAF market.
As we decarbonize aviation, increasing local SAF production capacity offers not only a substantial economic opportunity, including the creation of thousands of highly skilled jobs, but also a method to improve our energy security.
The SAF program run by the UK government has become one of the most extensive in existence. Substantial signals from the market and incentives are provided by our policies to encourage the production of and demand for SAF derived from sustainable sources.
The UK SAF obligation, that will go into effect in 2025 and give investors a long-term indication of the important function SAF is going to have in the UK, will be the primary factor driving demand for SAF.
The mandate, which calls for a minimum of 10% of aircraft fuel to be produced from environmentally friendly feedstocks by 2030, will lay out an extended trajectory for SAF adoption in the UK.
The plan will use price support from marketable certificates having a monetary value to incentivize the development of SAF. Strong sustainability standards regarding the feedstocks & SAF approaches that are eligible for support are part of the UK SAF mandate. By requiring the utilization of SAF, they are able to reduce carbon emissions while also establishing a market for SAF in the UK.
The objective of the government is for a local SAF market to supply the need.
Investors are already feeling confident enough to invest in the expansion of UK SAF production thanks to the the government’s £165 million Advance Fuel Fund. Additionally, it assists in realizing our goal to have 5 commercial SAF facilities in the United Kingdom by 2025.
With the negotiations that the government’s Department for business & Trade (DBT) is conducting with foreign investors, the federal government is further promoting UK investments in SAF projects. A collaborative effort between DBT and Number 10, the Office for Investments offers assistance to promote investments in the government’s top priority areas, including the creation of SAF projects.
The government investigated a number of ways to provide additional assistance for a strong UK SAF industry after making commitment to the SAF mission and its Advanced Fuels Fund. We hired Philip New in October 2022 to oversee an impartial assessment of creating a UK SAF sector. The research and the government’s reaction, which acknowledged revenue stability as a major impediment to investment, were both released on April 17, 2023. The government’s commitment was outlined in the response, which included options for further income certainty to promote the development of a UK SAF sector. The government will collaborate with sector through the Jet Zero Commission to determine the best strategy for assisting the aviation industry’s decarbonization.
The government is aware as the UK SAF mandate will offer a significant amount of price support but that it might not offer enough long-term income certainty to maximize the investment in SAF production facilities as a result of the work done through the Jet Zero Commission and Philip New. In order to increase investor confidence in SAF manufacturing in the UK and provide additional assurance regarding future revenues, we have committed to implementing a revenue certainty system.