UK Announces SAF Mandate

The United Kingdom government has announced a legislative proposal aiming to ensure that by 2030, 10% of jet fuel used in UK-originating flights will be sourced from sustainable avenues. This initiative, known as the Sustainable Aviation Fuel (SAF) mandate, is contingent on parliamentary approval and is expected to be enacted in January 2025.

The mandate directly responds to the increasing need for the aviation sector to reduce its carbon footprint. It builds on the momentum of previous initiatives, including a government-backed transatlantic flight powered entirely by SAF that took off from Heathrow in November.

According to the mandate’s specifications, the aviation industry is to be supplied with an estimated 1.2 million tonnes of SAF annually. This volume is projected to enable aircraft to travel a distance equivalent to 3,000 global circumnavigations cumulatively.

The mandate includes provisions to regulate the use of feedstocks in the hydroprocessed esters and fatty acids (HEFA) process, the currently available commercial method for producing SAF. The mandate allows for unrestricted HEFA supply in the initial two years, followed by a planned reduction to 71% of the total by 2030 and further down to 33% by 2040, encouraging the development of more advanced SAF technologies.

From 2028, the mandate will also introduce an obligation for power-to-liquid fuels, targeting a 3.5% share of the total jet fuel demand by 2040. This fuel type offers a reduced dependency on feedstocks and can achieve more significant emission reductions.

The mandate provides for buy-out mechanisms priced at £4.70 and £5.00 per litre for the main and power-to-liquid obligations respectively. These mechanisms act as financial incentives for fuel suppliers to integrate SAF into the market and establish a ceiling on the maximum cost of the scheme.

The economic benefits of the SAF industry are substantial, with an estimated increase of £1.8 billion to the UK economy and the creation of more than 10,000 jobs. The government has also allocated £135 million from the Advanced Fuels Fund to support 13 SAF projects.

The government has integrated a price review mechanism into the mandate to mitigate potential impacts on consumer airfare costs due to the higher price of SAF compared to traditional jet fuel. This mechanism permits the government to adjust the mandate’s key limits to avoid significant airfare increases in the event of SAF shortages.

The UK’s Transport Secretary, Mark Harper, has expressed the measures as critical to safeguarding the future of UK aviation and associated employment while facilitating sustainable air travel.

Concurrently, the government has launched a consultation regarding a SAF revenue certainty scheme, which includes a guaranteed strike price (GSP) to establish a fixed price for SAF produced for the UK market, aiming to bolster investor confidence in the SAF industry.

SAFs, manufactured from waste materials or by-products, are known to potentially reduce carbon emissions by up to 70% compared to traditional fossil fuels. The aviation sector has broadly welcomed the clarity and direction the SAF mandate provides.