The King’s speech sets out the programme of legislation that the government intend to pursue in the forthcoming parliamentary session. The latest speech delivered on July 17th included the statement ‘A Bill will be introduced to support sustainable aviation fuel production [Sustainable Aviation Fuel (Revenue Support Mechanism) Bill].
As reported in the June edition of BIFAlink, Sustainable Aviation Fuel (SAF) is an important part of the strategy to decarbonise air transport. It can be used in existing aircraft, and it emits on average 70% fewer greenhouse gas emissions than using fossil jet fuel on a life cycle basis.
This announcement is a further important step in confirming that, subject to Parliamentary approval, they will introduce a SAF mandate to start from 1 January 2025. This would make the UK one of the first countries in the world to legislate in this way.
Government state that the latest announcement is good for aviation, the environment and for the UK overall. SAF production is estimated to add over £1.8 billion to the economy and over 10,000 jobs across the country while supporting decarbonisation. The SAF mandate will drive demand for SAF in the UK, deliver emission reductions up to 2.7 MtCO2e in 2030 and up to 6.3 MtCO2e in 2040.
The SAF Mandate
The SAF mandate will start in 2025 at 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.
The mandate will encourage the innovation of advanced fuels that can generate greater emission reductions and the diversification of feedstocks to reduce dependencies on scarce resources. The mandate will also include a mechanism to incentivise supply while protecting consumers where suppliers are unable to secure a supply of SAF. They also set a maximum price for the scheme and will therefore deliver emission reductions at an acceptable cost.
SAF Revenue Certainty Mechanism
The bill announced on 17 July will introduce a revenue certainty mechanism (RCM) for SAF producers who are looking to invest in new plants in the UK. This builds on the SAF mandate, which will create demand for SAF by setting targets on fuel suppliers to use a proportion of SAF. There are several SAF projects being developed across the UK. Bringing in a revenue certainty mechanism will help to reduce risk, giving investors the confidence they need to invest in UK SAF plants. It will increase the likelihood that SAF plants will be built in the UK, thereby securing a supply of SAF for the UK aviation sector and supporting the delivery of the SAF mandate.
For more information, please visit the GOV.UK Website: Sustainable aviation fuel initiatives (www.gov.uk)
