Introduction

The UK government has released long-awaited details of its intention to implement a SAF mandate from 1 January 2025 that aims to deliver emission reductions of 2.7 MtCO2e in 2030 and 6.3 MtCO2e in 2040 through the use of sustainable aviation fuels. From 2025, SAF will have to make up at least 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, says the government. A separate mandate will be introduced from 2028 on power-to-liquid (PtL) fuels, with a 0.2% obligation that will rise to 3.5% in 2040. The mandate provides for a buy-out mechanism for both fuels where suppliers are unable to secure SAF or PtL supplies, set at £4.70 ($5.90) and £5.00 ($6.30) per litre of fuel respectively. The government has also started a consultation process on introducing, possibly by 2026, an industry-funded revenue certainty mechanism to help provide investor confidence in UK commercial-scale SAF production.

Using powers under the Energy Act 2004, the government aims to lay secondary legislation this summer, ahead of an anticipated UK general election in the autumn, so that the UK SAF Mandate scheme can enter into effect at the start of next year.

“Sustainable aviation fuel protects the future of UK aviation, the thousands of British jobs that depend on it, and the holidays and business travel flights that we all rely on,” said Transport Secretary Mark Harper, unveiling details of the mandate. “As part of our plan to grow the economy, the measures announced will give both UK aviation and the UK SAF industry the certainty they need to keep creating skilled British jobs, while giving passengers the freedom to continue travelling by air in a way that’s fit for the future.”

The legislation will include a five-yearly review mechanism from 2030 that the government says will help manage prices and minimise the impact on ticket fares for passengers, with powers to change key limits within the mandate to block higher price rises in the case of SAF shortages. Any increases in air fares as a result of SAF will fall within the range of usual fluctuations of fuel prices, it adds.

“While we recognise SAF may be more expensive than traditional jet fuel in the immediate term, we’re ensuring decarbonisation doesn’t come at the expense of consumers,” said Harper. “This plan is part of our approach to ensure that the rationing of flights through demand management is ruled out.”

UK aviation used an estimated 81 million litres of SAF in 2023, up from 48 million litres in 2022 (a 0.4% share of all jet fuel supplied), and the 2% obligation in 2025 is equal to around 230,000 tonnes (approximately 290 million litres) of SAF. “Based on a continuation of this trend, forecasted global production capacity and the impact of a comprehensive SAF programme in the UK, we are confident that this 2025 target and the trajectory to 2030 strike the right balance,” says the government.

The commitment to at least 10% SAF in 2030, higher than the EU’s target of 6%, “is the most ambitious SAF obligation in the world,” it argues.

To meet the obligation, certificates will be issued to jet fuel suppliers for the supply of SAF, which must achieve a minimum GHG emissions reduction of 40%, in proportion to GHG emissions reduction delivered. The mandate will include a certificate trading scheme, with three types of certificates: PtL certificates, standard certificates and HEFA certificates. Those suppliers that invest in SAF and supply beyond their obligation level will be able to sell their excess certificates to those that have a shortfall.

The Transport Secretary will act as the Administrator of the scheme, with responsibility delegated to an administration unit within the Department for Transport. To ensure compliance with the scheme, the Administrator will have the right to apply “proportionate sanctions”.

A complexity of the mandate is striking the right balance between the use of HEFA fuels – used cooking oil and fats, for example – that make up nearly all current commercial supplies of SAF, while encouraging the development and use of advanced fuels. The government has decided that HEFA can contribute a maximum amount (100%)  of SAF demand in 2025 and 2026, before applying a cap so that HEFA use decreases to 71% in 2030 and 35% in 2040.

In order to be eligible under the mandate, the government will impose “strict” sustainability criteria that SAF must meet. They must be made from sustainable, non-recyclable wastes or residues (for example, used cooking oil or forestry residues), recycled carbon fuels (for example, unrecyclable plastics) or PtL fuels made using low carbon (renewable or nuclear) electricity. SAF produced from food, feed or energy crops will not be eligible.

“We will monitor developments in SAF technologies and feedstocks, and keep under review broadening the list of eligible fuel types and feedstocks, for example, to include sustainable crops and cover crops,” says the government.

It adds that policy will operate alongside the UK Emissions Trading Scheme so that airlines can continue to make emissions reduction claims under the ETS for eligible SAF. It also pledges to work closely with policymakers in other states “to ensure that our policy works effectively to support global decarbonisation.”

The government recognises that commercial-scale, domestic SAF plants will be important to supply the levels of SAF needed to keep pace with demand and meet the mandate obligations. It is aiming for five such plants to be under construction by the end of next year, although this is uncertain despite the grants that it has awarded to a number of projects under its Advanced Fuels Fund.

For non-HEFA based SAF plants, advanced SAF projects require major investment that comes with risks. The government has therefore opened a public consultation on implementing a revenue certainty mechanism (RCM) with proposals on four possible options. A Guaranteed Strike Price (GSP) and Buyer of Last Resort (BOLR) are two mechanisms that would require primary legislation, while the Mandate Floor Price (MFP) and Mandate Auto-Ratchet (MAR) are regulatory mechanisms applied to the SAF mandate and could be implemented through additional secondary legislation.

The consultation document also carries a detailed assessment of the options for RCMs against three overarching principles: investibility, deliverability and affordability. Against these criteria, the first two private law contract-based options (GSP and BOLR) scored the highest, with a GSP coming out highest overall. However, the choice of mechanism involves a trade-off between the deliverability timeline and level of certainty provided.

Reaction:

“UK airlines support a SAF mandate as a vital step towards the net-zero transition as SAF will be one of the important technologies to achieve aviation’s net zero commitments. However, it is vital that the government now puts the right measures in place to incentivise production and reduce the cost of SAF as seen in the EU and US, as quickly as possible. Without these, the UK will be at a competitive disadvantage with consumers at risk of higher fares. We welcome the delay to and subsequent increase in the cap on HEFA-based SAF to allow producers time to scale-up more advanced fuels, but the government must keep the buy-out price under regular review to avoid disproportionate price increases for consumers. Ministers must also introduce legislation for a revenue certainty mechanism in the next Kings Speech to drive investment in UK SAF production and increase supply. Only then can we keep UK aviation competitive as we decarbonise.”
Tim Alderslade, CEO, Airlines UK

“Sustainable aviation fuel is a key part of the decarbonisation of air travel and a domestic SAF industry will create jobs, wealth and help the UK secure its energy independence. We are pleased that the government has brought forward proposals for a mandate and revenue certainty scheme, which will send the message to investors that the UK is serious about developing its own production facilities. Government and industry must now work together to keep this momentum towards delivery going so that we can grow sustainably and meet our carbon targets.”
Karen Dee, Chief Executive, Airport Operators Association

“The mandate, in combination with guaranteed pricing, will see the UK start to produce SAF within the next couple of years. There are many ways of making SAF, and all have a vital role to play. Many of the plants our members will build will be ground-breaking, first-of-a-kind installations. The UK policy aims specifically to encourage SAF made from wastes, which presents an opportunity for innovation and ultimately the export of technology and expertise.”
Gaynor Hartnell, Chief Executive, Renewable Transport Fuel Association 

“We will continue to support the work of the Jet Zero Council to deliver the revenue certainty scheme so that much-needed SAF plants can start to be built here in the UK.”
Luis Gallego, CEO, International Airlines Group

“Both ministers and the aviation industry like to make out that alternative fuels will be the big solution for tackling aviation emissions. But the truth is that these fuels will be in limited supply and most of them will be produced using wastes. That doesn’t even reduce CO2, it just takes carbon, like plastic bottles, that’s laying in a rubbish dump and puts it back in the atmosphere. So it’s actually not even sustainable. If this mandate means the government finally acknowledging the aviation emissions problem can’t be solved without some policy action, then perhaps it’s a step in the right direction. But what we really need is a reduction in aviation emissions. A percentage mandate for alternative fuel in an industry hungry for growth can’t guarantee that. So for the time being, it remains the case that the best way to cut emissions from flying is to fly less. On the revenue certainty mechanism, whatever form this takes, the important thing is that it’s airlines, not the public, who pay for any fuels or technologies designed to help cut emissions. With no tax on aircraft fuel and no effective emissions charges for flights outside Europe, it’s about time we made the polluters pay.”
Cait Hewitt, Policy Director, Aviation Environment Federation

“An ambitious sustainable fuels mandate is central to driving forward production and use of alternative fuels for aviation and moving the sector away from the fossil fuels of today – but with the UK government only mandating that 22% of jet fuel is ‘sustainable’ by 2040, that is not what the sector has received. It’s also the case that not all alternative fuels are made the same, and it’s crucial to make sure that we’re incentivising the right ones. That is why it is disappointing to see the UK showing such low ambition and falling behind the EU’s ReFuelEU Aviation target of 1.2% synthetic fuels by 2030 by only mandating the use of 0.5% power-to-liquid fuels by 2030. These fuels, produced using green hydrogen, have the greatest potential to lower emissions, but supply of them will only be driven to the scale needed with ambitious regulation. That’s why we need to see an increase in ambition and higher mandates for the roll-out of power-to-liquid fuels from future iterations of the SAF mandate. Alongside the mandate for power-to-liquid fuels, we’re disappointed that the mandate does not cap the use of HEFA fuels for aviation at 0% but instead allows these fuels to comprise up to 71% of fuel supplied in 2030. By leaving HEFA on the table for fuel producers, the industry lacks an additional incentive to drive the development of alternative, more sustainable options such as power-to-liquid fuels. Further, by enabling the use of HEFA fuels for aviation we risk seeing the diversion of feedstocks away from industries where they are already widely used, such as road transport.”
Nuala Doyle, Policy Officer, The SASHA Coalition

“The government is clearly attempting to strike a careful balance between reducing emissions, in line with its Jet Zero strategy, and mitigating inflation in air ticket prices if the aviation industry is primarily expected to foot the bill for the increased costs of SAF production – it aims to do this by incentivising SAF production and reducing the long-term cost of this fuel. However, it is a fine line to tread. The extent to which the government adequately supports the aviation industry through this transition and protects its long-term viability will be key to this new mandate’s eventual success. The aviation industry will be carefully scrutinising the proposals in the consultation on the SAF revenue certainty scheme to see what these proposals could ultimately mean for fuel suppliers, airlines and passengers.”
Andrew Williams, Partner, Norton Rose Fulbright

“We strongly support the continued push to decarbonise air travel with today’s announcement that, by law, 10% of all plane fuels will be low-carbon 2030. Getting there will take time and state funding to help give certainty and momentum to companies, and shield them from the risk of making losses while developing these new fuels. But ministers have also announced another consultation with industry, asking what kind of funding scheme to use. A very similar consultation in 2022 concluded that a ‘contracts for difference’ scheme was industry’s preference – where companies receive capital for upfront costs of developing low-carbon fuels and guarantees on the price they can charge when the fuel comes on stream. This was also the Committee’s recommendation in 2023. So with this further round of consultation, I would urge the Department for Transport to carry it out quickly, and crack on.”
Iain Stewart MP, Chair of House of Commons Transport Committee