Sustainable aviation fuel (SAF) is an important part of the strategy to decarbonise air travel. It can be used in existing aircraft, and it emits on average 70% fewer greenhouse gas emissions than using fossil jet fuel on a life cycle basis.
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.
Today (22 July 2024), in addition to the announcement we have already made in the King's Speech on 17 July that a bill will be introduced to support sustainable aviation fuel production, we are taking a further important step in confirming that, subject to Parliamentary approval, we will introduce a SAF mandate to start from 1 January 2025. We will be one of the first countries in the world to legislate in this way. We are also today confirming the full policy detail of the mandate.
Today's announcement is good for aviation, the environment and for the UK overall: sustainable aviation fuel production is estimated to add over £1.8 billion to the economy and over 10,000 jobs across the country while supporting decarbonisation. The SAF mandate will drive demand for SAF in the UK, deliver emission reductions up to 2.7 MtCO2e in 2030 and up to 6.3 MtCO2e in 2040 and provide investor confidence that the UK will be a place to produce, use and supply SAF.
SAF mandate
The SAF mandate will start in 2025 at 2% of total UK jet fuel demand, increase on a linear basis to 10% in 2030 and then to 22% in 2040. From 2040, the obligation will remain at 22% until there is greater certainty regarding SAF supply.
The mandate will encourage the innovation of advanced fuels that can generate greater emission reductions and the diversification of feedstocks to reduce dependencies on scarce resources, by including in the mandate:
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A cap on the feedstocks used in the hydroprocessed esters and fatty acids (HEFA) process, but not until other types of SAF are also commercially viable to recognise the important part that HEFA SAF will play in the 2020s. HEFA supply will not be limited under the mandate for the first 2 years, fall to 71% in 2030 and still contribute 35% in 2040.
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A separate obligation on power to liquid fuels from 2028 that reaches 3.5% of total jet fuel demand in 2040.
The mandate will include a buy-out mechanism for both the main and power to liquid obligations to incentivise supply while protecting consumers where suppliers are unable to secure a supply of SAF. These will be set at £4.70 and £5.00 per litre of fuel, respectively. These provide a significant incentive for fuel suppliers to supply SAF into the market rather than pay the buy-out. They also set a maximum price for the scheme, and therefore deliver emission reductions at an acceptable cost. The plan includes a review mechanism to help minimise the impact on ticket fares for passengers.
We will also work closely across government on feedstock availability to ensure that feedstocks are used in a sustainable and productive way.
SAF revenue certainty mechanism
The bill announced on 17 July will introduce a revenue certainty mechanism (RCM) for SAF producers who are looking to invest in new plants in the UK. This builds on the SAF mandate, which will create demand for SAF by setting targets on fuel suppliers to use a proportion of SAF. This new sector will create jobs and growth opportunities in the UK, help secure a supply of SAF for UK airlines, and enhance energy security.
There are a number of SAF projects being developed across the UK. Bringing in a revenue certainty mechanism will help to reduce risk, giving investors the confidence they need to invest in UK SAF plants. It will increase the likelihood SAF plants will be built in the UK, thereby securing a supply of SAF for the UK aviation sector and supporting the delivery of the SAF mandate.
These 2 SAF initiatives will drive the government's mission-driven plan to kick start economic growth and make Britain a clean energy superpower.
