The UK SAF mandate has been signed into law and will come into effect on New Year’s Day.
The SAF obligation will start at 2 per cent of the UK’s total aviation fuel requirements and increase linearly to 10 per cent by 2030 and then to 22 per cent by 2040.
From 2040, the obligation will remain at 22 per cent until SAF supply becomes more certain.
The mandate will encourage innovation in advanced fuels that produce greater emission reductions and diversification of feedstocks to reduce dependence on scarce resources by including the following in the mandate:
– A cap on the feedstock used in the Hydrogenated Ester and Fatty Acid (HEFA) process, but not until other types of SAF are also commercially viable to recognise the important role that HEFA SAF will play in the 2020s. Under this provision, HEFA supply would not be constrained in the first two years, falling to 71 per cent in 2030 and still contributing 35 per cent in 2040.
– A separate obligation for power-to-liquid fuels from 2028 would amount to 3.5 per cent of total aviation fuel requirements by 2040.
The provision will include buyout mechanisms for both the primary obligation and the power-to-liquid obligation to incentivise supply while protecting consumers in the event that suppliers are unable to secure SAF supplies.
These will be set at £4.70 (€5.60) and £5 (€6) per litre of fuel respectively. This provides a significant incentive for fuel suppliers to supply SAF to the market rather than pay buyout fees. They also set a maximum price for the scheme, so emissions reductions were achieved at an acceptable cost.
The scheme includes a review mechanism to help minimise the impact on passenger fares.
We will also work closely with the Government to secure the supply of feedstock to ensure it is used in a sustainable and efficient way.