SAF industry estimated to boost the economy by £1.8 billion and create more than 10,000 jobs across the UK by 2030
SAF industry estimated to boost the economy by £1.8 billion and create more than 10,000 jobs across the UK by 2030
The UK Department for Transport government's new Sustainable Aviation Fuel Mandate sets new targets to ensure that 10% of all jet fuel in aircraft taking off from the UK comes from sustainable sources by 2030. The UK’s SAF mandate will come into force in January 2025 and be one of the first in the world to be put into law, subject to approval by parliament. The move follows the world’s first commercial 100% SAF transatlantic flight taking off from Heathrow in November – backed by up to £1 million in government investment.
The government has committed to ambitious but achievable targets that will see around 1.2 million tonnes of SAF supplied to the UK airline industry each year – enough to circle the globe 3,000 times. The plans are good for aviation, the environment and for the UK overall with the SAF industry estimated to add over £1.8 billion to the economy and create over 10,000 jobs across the country.
£135 million of funding was recently allocated through the Advanced Fuels Fund, with the aim of supporting the growth of 13 groundbreaking SAF projects across the UK.
It is recognised that SAF is likely to be more expensive than traditional jet fuel, at least in the immediate term, the plan ensures decarbonisation doesn’t come at the expense of consumers as the rationing of flights through ‘demand management’ is ruled out in the plan.
The plan includes a review mechanism to help manage prices and minimise the impact on ticket fares for passengers. The government also has the power to change key limits within the mandate to block higher price rises in the case of SAF shortages – keeping the impact on consumers to a minimum.
Providing sufficient SAF is available, any increases in air fares as a result of SAF will fall well within the range of usual fluctuations in prices we see every year and the government have plans in place to prevent any major hikes.
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 produces up to 70% less carbon emissions than the traditional fossil fuels used in most commercial flights. It is made from waste materials or by-products – like household waste, industrial gases or used cooking oil.
The government has also launched a consultation into a range of options for a SAF revenue certainty scheme, which looks to guarantee revenue from SAF and provide new and existing producers and investors with the confidence to continue investing in the industry.
The consultation includes a preferred option of a guaranteed strike price (GSP), which guarantees a pre-agreed price of SAF supplied to the UK market – giving producers the confidence that they will receive a certain price for the SAF they make.
The plans set out in the SAF mandate have been widely welcomed by the aviation industry, with airlines, airports and SAF producers now having a clear vision as the sector continues to grow.
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, 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."
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 will also ensure SAF is created in ways that are better for the environment, encouraging techniques that turn renewable energy into fuel, known as power-to-liquid.
It will also incentivise the use of different types of waste to produce fuel, like sawdust and bark from forests, to tackle global issues such as deforestation, biodiversity and competition with food production – while placing a cap on fuel primarily made from cooking oil, which is the cheapest and most developed SAF pathway.
OXCCU Co-Founder and CEO, Andrew Symes comments: "The DfT announced its guidance on the recent Sustainable Aviation Fuel (SAF) mandates, including new targets for ensuring 10% of all jet fuel in flights leaving the UK will come from sustainable sources by 2030. At OXCCU, we’re particularly excited to see the PtL sub mandate in the guidance as it signifies that fuels are starting to receive the foundational support required to produce SAF at scale and reduce global aviation emissions to meet global targets.With theoretically unlimited carbon dioxide feedstocks available, PtL technology provides the path to making low-cost, scalable alternatives to existing fuel products. With the right funding and mandates in place, we can start building more efuel plants in the UK.This announcement affirms the UK's position as a leader in sustainable aviation, and with the support of new technologies like OXCCU, future generations can experience the continued use of hydrocarbon fuels but without their climate impact"
OXCCU, a spinout from Oxford University, has revolutionised the process of creating sustainable, economically efficient, and scalable Jet fuel in a groundbreaking one-step process. They are manufacturing novel catalysts and designing novel reactors to convert CO2 and H2 to long-chain hydrocarbons with high conversion and selectivity for use as carbon neutral fuels, chemicals and plastics, most notably Sustainable Aviation Fuel, called OXEFUEL. Their fuel uses PtL (power-to-liquid) technology, and it has been independently tested and verified in collaboration with Imperial College London, finding that the novel process reduces the capital cost by 50%.