Logistics UK responds to government's plans to introduce Sustainable Aviation Fuel Bill

SAF is one of the keyways to decarbonise air travel and this legislation proposal is aimed at helping to drive the government's pledge to kickstart economic growth and make Britain a clean energy superpower, delivering the government’s manifesto commitment to secure the UK aviation industry's long-term future, including through promoting SAF.

This Bill will support SAF production in the UK by providing revenue certainty to encourage investment in the construction of SAF plants across the UK.

Sustainable aviation fuel production is estimated to add over £1.8 billion to the economy and could support over 10,000 jobs across the country while supporting decarbonisation, building on the SAF mandate, which will create demand for SAF by setting targets on fuel suppliers to use a proportion of SAF.

The proposed legislation is something Logistics UK has been pushing for, and Ellis Shelton, Senior Policy Advisor, Logistics UK said: "It is encouraging to see the government reaffirm its commitment to SAF as the principal immediate path to decarbonise aviation.

"Delivering the revenue certainty mechanism at pace is now the critical next step to attract the investment required to kickstart SAF production in the UK.

"Decisive government action will ensure the whole country benefits from the green jobs and growth that SAF brings."

SAF 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. The introduction of a SAF mandate is set to start from 1 January 2025 at 2% of total UK jet fuel demand, increasing on a linear basis to 10% in 2030 and then to 22% in 2040.

The SAF mandate will deliver emission reductions up to 2.7 MtCO2e in 2030 and up to 6.3 MtCO2e 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, by including in the mandate:

- Hydroprocessed esters and fatty acids (HEFA) supply will not be limited under the mandate for the first two years, fall to 71% in 2030 and still contribute 35% in 2040.

- A separate obligation on power to liquid fuels from 2028 that reaches 3.5% of total jet fuel demand in 2040.

The mandate will include a buy-out mechanism for both the main and power to liquid obligations to incentivise supply while protecting consumers where suppliers are unable to secure a supply of SAF.

These will be set at £4.70 and £5.00 per litre of fuel. These prices provide a significant incentive for fuel suppliers to supply SAF into the market rather than pay the buy-out. They also set a maximum price for the scheme.

Published On: 25/07/2024 13:26:30

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