The Department of Transport claims it would be ‘grossly unfair’ for the taxpayer to cover the costs of the UK’s SAF production ambitions.
The letter, organised by Transport & Environment and endorsed by a host of environmental campaign groups and think tanks, calls on the government to follow through on its commitment to become a “world leader” in SAF production with its revenue certainty mechanism, but urges that the cost of this should not fall on the UK taxpayer.
The revenue certainty mechanism was announced in September and aims to provide investors with greater certainty in the industry and drive financing and investment in future SAF production. It had been suggested that the funding of the mechanism would come from the industry, but this remains unclear.
The letter stresses that the treasury, and by extension the taxpayer, should not be burdened with the cost of financing SAF production, since the, “majority of the population travels by plane rarely.”
According to the Department for Transport’s annual National Travel Survey, in 15 out of the last 17 years, the majority of British citizens did not fly abroad. Of those who did fly, most only travelled once per year.
As a result, the letter suggests that shouldering the financing burden on the taxpayer would mean that those who do not fly would be indirectly subsidising the aviation industry’s transition to SAF, which it deems to be ‘grossly unfair,’ especially during a cost of living crises.
While the initial proposal claims that the new revenue support mechanism will be “industry-funded,” the authors want to ensure that this cost is not passed on to the general public.
They recommend that “industry-funded” should be interpreted to mean that the aviation sector should bear the full cost of the mechanism, meaning that no existing or future taxes on the sector should be earmarked to fund it, such as Air Passenger Duty or emissions trading scheme revenues.
Additionally, there should be no possibility of using Treasury funds to cover any scheme costs. The scheme should be administered by an independent body, similar to how the Low Carbon Contracts Company manages renewable energy generation.
A sustainable aviation future
SAF has emerged as a promising solution to address the environmental challenges posed by the airline industry, a sector that contributes approximately 2% of global greenhouse gas emissions.
While improvements, such as waste management and airport efficiency enhancements, can contribute to emission reductions, the majority of these emissions stem from the fuel consumed by aircraft.
Earlier this year, Virgin Atlantic, in collaboration with Boeing and Rolls-Royce, completed the world’s first transatlantic flight using SAF. This achievement showcased the industry’s capability to utilise this sustainable alternative, which boasts up to an 80% reduction in greenhouse gas emissions compared to traditional jet fuel.
Despite its promising potential, SAF is in its infancy, and its high cost remains a significant barrier to widespread adoption among airlines.
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