UK Government's New SAF Strategy Drives Expansion in Aviation Sector

Recently, the UK government announced new targets to ensure that by 2030, 10% of all jet fuel used in flights departing from the UK will be sourced from sustainable alternatives as part of its Sustainable Aviation Fuel (SAF) mandate. Pending parliamentary approval, this mandate is set to take effect in January 2025, positioning the UK as a global leader in the push for decarbonizing air travel. This initiative follows the historic event of the world's first 100% SAF-powered transatlantic flight from Heathrow in November, which received up to £1 million in government funding.

After thorough industry consultations, the government has set robust yet attainable goals. It aims to supply approximately 1.2 million tonnes of SAF annually to the UK airline industry—enough to encircle the globe 3,000 times.

These efforts are beneficial for the aviation sector and the environment and are poised to significantly boost the UK economy. The SAF industry is expected to contribute over £1.8 billion and create more than 10,000 jobs nationwide.

This progress comes on the heels of an allocation of £135 million from the Advanced Fuels Fund, which is facilitating the development of 13 pioneering SAF projects across the UK.

Acknowledging the higher costs of SAF compared to traditional jet fuels in the short term, the government is committed to advancing decarbonization without unduly burdening consumers. The strategy includes a plan to avoid flight rationing through 'demand management' and incorporates a review mechanism to regulate prices and lessen any potential increase in airfares.

Moreover, the government retains the authority to adjust critical parameters within the mandate to prevent significant price surges in the event of SAF shortages, thereby minimizing the financial impact on consumers.

Assuming adequate availability of SAF, any resultant increases in airfares are expected to remain within the regular yearly price fluctuations, with measures in place to prevent substantial fare hikes.

This initiative is a crucial component of the government's broader strategy to meet its ambitious net zero targets while adopting a pragmatic and balanced approach that reduces unnecessary burdens on the public.

Transport Secretary Mark Harper said: 

"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.

"As part of our plan to grow the economy, the measures announced today 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."

SAF is celebrated for producing up to 70% less carbon emissions than traditional fossil fuels that power most commercial flights. It is derived from various waste materials and by-products, including household refuse, industrial gases, and used cooking oil.

In addition to these initiatives, the government initiated a consultation on several potential strategies for a SAF revenue certainty scheme. This scheme aims to ensure stable revenue for SAF, thereby bolstering confidence among new and existing producers and investors in the sustainable fuel sector.

Central to the consultation is a Guaranteed Strike Price (GSP) proposal, which would establish a pre-set price for SAF sold in the UK market. This measure assures producers of receiving a specific price for the SAF they produce, encouraging continued investment in this emerging industry.

The strategies outlined in the SAF mandate have received broad endorsement from the aviation industry. Airlines, airports, and SAF producers have expressed support, appreciating the clear direction provided as the sector strives to expand and adapt to these innovative and environmentally focused changes.

Karen Dee, Chief Executive of the Airport Operators Association, said:

"Sustainable aviation fuel is a key part of the decarbonisation of air travel, and a domestic SAF industry will create jobs and 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 that 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."

Tim Alderslade, CEO of Airlines UK, said:

"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 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."

Gaynor Hartnell, Chief Executive of the Renewable Transport Fuel Association, said: 

"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."

Luis Gallego, CEO of IAG, said:

"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."

The mandate further emphasizes that SAF must be produced in environmentally responsible ways, advocating for methods such as power-to-liquid, which converts renewable energy into fuel. It also promotes using diverse waste materials, including forest by-products like sawdust and bark, to address broader environmental challenges such as deforestation, biodiversity loss, and conflicts with food production. Simultaneously, it introduces restrictions on SAF derived predominantly from used cooking oil, which, while being the most economical and established method, will now be capped to encourage diversity in raw material sources.

These initiatives were unveiled today as part of the UK's ongoing commitment to environmental stewardship, marked by the announcement that the nation is now halfway to achieving its net zero goal. This milestone reflects substantial advancement towards the UK's carbon reduction targets. It illustrates a more balanced approach that reduces the impact on British citizens while continuing to address global environmental issues.