Measures have been introduced to present the UK aviation and SAF industries the knowledge to proceed creating expert British jobs whereas making certain air journey is match for the longer term.
This Authorities is immensely happy with the success of the UK aviation {industry} – and needs to make sure it continues to develop and prosper sooner or later. Decarbonisation is essential to that future, and at present (25 April 2024) we’re taking one other necessary step in direction of attaining that by publishing the total coverage particulars of a leading sustainable aviation fuel (SAF) mandate, which is able to provide 10% of all jet gasoline on flights from Britain from sustainable sources by 2030 and 22% by 2040. It will likely be one of many first on this planet to be handed into legislation and, topic to parliamentary approval, can be carried out from 1 January 2025, placing Britain as soon as once more on the forefront of air journey decarbonisation. We’re additionally launching one at present consultation on an industry-funded revenue security mechanism to assist funding within the UK SAF manufacturing {industry}.
As we speak’s bulletins are good for aviation, the setting and Britain basically, with the SAF {industry} estimated so as to add over £1.8 billion to the financial system and create greater than 10,000 jobs throughout the nation . The SAF mandate will increase demand for SAF in Britain, safe emissions reductions and supply investor confidence. A income safety mechanism will even encourage funding in UK SAF manufacturing, boosting progress within the UK, securing the availability of UK SAF and sustaining the UK’s place as a world chief.
That is a part of the Authorities’s plan to satisfy our internet zero commitments whereas making certain we take a realistic and proportionate method that minimizes pointless burdens on the general public.
SAF mandate
After in depth session with {industry}, the SAF mandate will ship emissions reductions of two.7 MtCO2e by 2030 and 6.3 MtCO2e by 2040 and create high-quality jobs, particularly within the manufacturing of probably the most superior gasoline varieties. The federal government will undertake secondary laws this summer time, in order that the scheme will come into impact on January 1, 2025.
The federal government first consulted on the introduction of a SAF mandate in July 2022 and subsequently confirmed that it will be launched from 2025. This steered that no less than 10% of UK aviation gasoline ought to come from sustainable sources by 2030 and included key components corresponding to strong sustainability standards to make sure fuels ship actual advantages and sub-targets to drive various SAF manufacturing pathways. A second session, in March 2023, centered on the small print of the scheme, key coverage parameters and the design of the SAF mandate. As we speak the federal government confirms a trajectory for the mandate from 2025 to 2040 that’s formidable however practical. The mandate will kick in at 2% of complete UK aviation gasoline demand in 2025, rising linearly to 10% in 2030 after which to 22% in 2040. From 2040, the mandate will stay at 22% till there may be extra certainty concerning the SAF provision.
The mandate additionally features a ceiling on the uncooked supplies used within the hydroprocessed esters and fatty acids (HEFA) course of. HEFA is presently the one commercially obtainable SAF, however depends on restricted uncooked supplies that can’t obtain our long-term SAF targets alone. HEFA SAF will play an necessary function within the 2020s alongside the business improvement of superior fuels which can be much less depending on restricted uncooked supplies. As we speak’s publication confirms that HEFA provide won’t be restricted throughout the mandate trajectory for the primary two years, earlier than falling to 71% of the overall in 2030 and 33% in 2040. This may enable SAF demand to be met and the event of recent merchandise is concurrently stimulated. SAF applied sciences. The UK already produces HEFA SAF and we welcome the additional improvement of this UK {industry} alongside extra superior SAF applied sciences. We acknowledge that there’s a wider international HEFA market and subsequently there is no such thing as a restrict to the quantity of HEFA that may be produced within the UK.
To encourage innovation and diversification, a separate obligation on power-to-liquid fuels can be launched from 2028, reaching 3.5% of complete jet gasoline demand in 2040. This may allow the event of this high-tech gasoline, which is much less depending on uncooked supplies and might result in higher emission reductions. The mandate contains buyout mechanisms for each the principal and power-to-liquid obligations to stimulate provide whereas defending customers when suppliers fail to safe provide of SAF. These are set at £4.70 and £5.00 per liter of gasoline respectively. These present a big incentive for gasoline suppliers to carry SAF to market fairly than pay for the buyout. Additionally they set a most worth for the scheme, thereby making certain emissions reductions at an appropriate price.
Whereas we acknowledge that SAF could also be costlier than conventional jet gasoline within the quick time period, we’re making certain that decarbonization doesn’t come on the expense of customers. This plan is a part of our method to make sure that flight rationing by means of demand administration is eradicated. The plan features a evaluation mechanism to assist handle costs and reduce the affect on ticket costs for passengers. The federal government additionally has the facility to alter key limits throughout the mandate to dam increased worth will increase within the occasion of shortages of SAF, minimizing the affect on customers.
Supplied there may be ample SAF obtainable, any will increase in airfares as a result of SAF can be properly throughout the vary of the same old worth fluctuations we see yearly, and the federal government has plans in place to stop massive will increase. That is a part of the Authorities’s plan to ship on our formidable internet zero commitments whereas making certain we take a realistic and proportionate method that minimizes pointless burdens on the general public.
Revenue safety mechanism
The Authorities dedicated in September 2023 to introducing an industry-funded income safety mechanism for UK SAF energy stations and setting out how this could possibly be achieved by the tip of 2026. The launch of at present’s session demonstrates the Authorities’s efforts to ship on our promise within the Vitality Act. ambition to develop a SAF {industry} in Britain. Such a mechanism will construct confidence within the sector and assist promote funding in UK SAF factories.
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The session units out 4 choices developed with stakeholders by means of boards such because the Jet Zero Council. It gives an in depth evaluation of those 4 choices, a variety of things from how rapidly a mechanism could possibly be delivered to the dimensions of funding it’s prone to generate. The views of stakeholders throughout the availability chain can be crucial to the following section of the work and we welcome responses from all events.