The UK government has committed to introducing a revenue certainty mechanism to support the production of sustainable aviation fuel (SAF) in the country.
The mechanism, which was announced this week by the Department for Transport (DfT), is intended to be funded by industry, will give producers greater assurance about earnings from the SAF they produce. It comes as part of the government’s broader plan to achieve net zero emissions from aviation by 2050, known as ‘Jet Zero’.
SAF is a cleaner alternative to traditional jet fuel and can be produced from a variety of sustainable feedstocks, such as waste cooking oil, biomass, and electricity. It is seen as a key technology for decarbonising the aviation sector, which is responsible for around 2% of global greenhouse gas emissions.
While SAF has the potential to significantly reduce emissions from air travel, its uptake has been slow due to its high cost, typically three to four times more expensive than traditional jet fuel. Despite this, airlines and governments are taking steps to incorporate the fuel into their operations.
In late 2022, Ryanair announced a partnership with Shell to secure 360,000 tonnes of SAF from 2025 to 2030. And in May 2022, the UK government announced plans to fly the world’s first net zero emissions transatlantic flight using 100% SAF. This flight is scheduled to take off from London Heathrow to New York JFK on a Boeing 787 Dreamliner on 28 November 2023.
The revenue certainty mechanism is designed to help overcome the high cost of producing SAF, by providing producers with a guaranteed price, based on the cost of producing traditional jet fuel. This will give producers the confidence to invest in SAF production, helping to drive down costs and make the fuel more competitive.
According to the government, this scheme, along with the introduction of a SAF mandate in 2025, will provide fuel security, grow the economy and help to create over 10,000 jobs by 2030, rising to 60,000 by 2050.
“Not only will sustainable aviation fuel bring countless economic opportunities, including creating thousands of green jobs, this certainty will allow the industry to harness its full potential, bringing us closer to net zero flying,” said Aviation and Maritime Minister, Baroness Vere.
The new mechanism is supported by the UK government’s Advanced Fuels Fund, which was announced in 2022 and pledges £165 million in grant funding to support UK advanced fuels projects until March 31, 2025.
The DfT will launch a consultation on the scheme’s design and delivery in 2023, with the project expected to be completed by the end of 2026.
Jonathon Counsell, Chair of the Jet Zero Council SAF Delivery Group, said that the industry is ‘ready to take part’ in the process of determining the appropriate mechanism.
