UK set to introduce SAF bill

New bill to encourage the uptake of sustainable aviation fuel (SAF) was included in the King’s Speech setting out the legislative agenda of the new Labour government in the UK.

“A bill will be introduced to support sustainable aviation fuel production (Revenue Support Mechanism),” according to the new legislative programme.

Earlier in April, the UK finally confirmed the long-awaited SAF mandate requiring all flights taking off from the country to use 10% SAF by 2030.

Today’s proposed SAF bill will set out the rules governing revenue certainty mechanism announced at the same time as the publication of final details on the UK SAF mandate.

“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,” according to additional details shared by the government on the bill.

“There are several reasons why revenue certainty remains a key barrier to projects reaching Financial Investment Decision for some forms of SAF. Firstly, there is no clear UK or global market price for advanced SAF, as it is not yet being produced in large scale anywhere. A nascent and variable price means predicting the price that SAF will trade at in the UK over the short and medium to long term (the next 10 to 20 years) is uncertain.”

The government said that with number of SAF projects being developed across the UK, revenue certainty mechanism will help reduce risk by giving investors the confidence they need to invest in UK SAF plants.

Meanwhile, the UK Government has said that the costs pertaining to revenue certainty mechanism will be industry funded.

UK’s SAF mandate is subject to parliamentary approval and will come into force in January 2025.

Department for Transport (DtT) said that the mandate was finalised after extensive consultations with the industry and committed to ambitious but achievable targets that will see around 1.2m tonnes of SAF supplied to the UK airline industry each year.