The Sustainable Aviation Fuels Mandate

With the final Sustainable Aviation Fuels (SAF) Mandate design published today, coming into effect in January 2025, the government has ticked an important Jet Zero box for this parliament.

This is ‘Version 1’ of the SAF Mandate, and it’s key the entire sector remains engaged and communicates.

Both the government and industry are balancing multiple challenging priorities that include legal net zero duties, the UK’s investment viability, feedstock availability, and protecting consumers from unpopular shocks in the cost of their holiday.

Driving the SAF Mandate forward

Deployed correctly, SAFs improve emissions reductions for today’s largest, longest haul flights. Unlike the automotive sector, nearly every airframe you see at an airport today will still be flying in 2050, so we can’t solely rely on technology improvement.

Typically, SAFs are created by using a chemical process, often using hydrogen, to convert non-fossil fuel feedstocks like waste, biological material and captured carbon into fuel suitable for existing aviation infrastructure. The net emissions produced by their combustion in flight, accounting for altitude effects, are reduced, even if not entirely eliminated.

By 2030 suppliers of aviation fuel must derive 10% of the aviation fuels they sell from sustainable sources. Or, they must buy traded certificates from producers to cover their obligation.

There’s also a cash ‘buy-out’ if there’s simply not enough supply to meet demand, although this is capped and monitored by government.

The final design confirms today what counts as SAF, and what doesn’t, for the purposes of sustainability, with a SAF Clearing House acting to measure and confirm new fuels. Crop-derived SAFs, which would compete with food supply chains and harm biodiversity, are strongly disincentivised.

By implementing a SAF Mandate, the aim is to give its producers confidence to invest in new projects, enabling airlines to reduce their emissions. Multiple large plants with differing technologies and feedstocks are already proposed in the UK, but relatively few (compared to demand) have begun construction, partly due to uncertainty about revenues and regulation, so the UK Government hopes a SAF Mandate changes this.

Communicating the SAF Mandate beyond its launch

The SAF Mandate is unlikely to be perfect upon launch, and will require improvement over time. Comparable previous decarbonisation mandates with tricky balancing acts, like the Renewable Transport Fuel Obligation, first launched way back in 2008, have evolved significantly over time as the nature of technologies, supply and demand shifted.

Multiple important challenges remain untested in practice, and the government – particularly post-election - will need to know where change is needed to get this right. Where might a SAF Mandate go next, and what does industry need to engage government on?

• There’s still a significant political challenge to manage. While estimates vary, the cost of introducing SAFs will increase the cost of airline tickets. How this is communicated to the public, and where the costs fall, is a problem. The government has said it will engage with producers, suppliers and airlines to carefully monitor the cost of the ‘buy-out’ level to ensure the additional cost to flights isn’t politically unmanageable. But, in the process, it risks legal challenge to its net zero trajectory.
• In the short term, the UK’s SAF Mandate enables the scale up of waste-derived feedstocks, like black bin waste and used cooking oils, with a cap delayed to enable more advanced technologies to scale up in time. Transport & Environment anticipate that feedstocks for municipal waste face serious competition from other sectors, which could restrict the UK’s supply of affordable SAFs, resulting in fuel suppliers using the buy-out and a sub-optimal outcome.
• If the UK’s supply of SAFs isn’t sufficient, will other forms of carbon removal – BECCS, DACS - be paid for using the buy-out to maintain the UK’s legal commitments? Can removals be used to tackle residual emissions from SAFs to drive further improvement?
  
  

Pressure on Jet Zero

Finally, will the government see the scale of new project investment required, without needing to spend more taxpayer money on SAFs?

Or, will investors seek further public incentives?

With an update on Jet Zero due in 2025, and the 7^th Carbon Budget likely to find the UK’s aviation decarbonisation is running behind plan, there’ll certainly be pressure.

As a result of the Energy Act 2023, the government is obliged to consult and update parliament on whether a further revenue support scheme – like CfDs, or tax credits – is required for the UK’s SAFs sector to succeed, but this will be expensive and challenging politically. This is potentially too expensive for government to implement, and today, the consultation proposes a ‘guaranteed strike price’ for SAFs – but where this price sits is likely the difference between it making industry happy, and giving government concern.

Today’s step forward on SAFs is an important milestone for Jet Zero, but it’s by no means the last word.

If you'd like to speak to someone on the Net-Zero Transition team, drop us a line at [email protected].