UK Government publishes full policy SAF mandate

The government states the mandate ‘will drive demand for SAF in the UK, secure emission reductions and provide investor confidence.’

Following extensive consultations with the industry, the SAF mandate will deliver emission reductions of 2.7 MtCO2e in 2030 and 6.3 MtCO2e in 2040 and create high value jobs, particularly in the production of the most advanced fuel types. The government will lay secondary legislation this summer so that the scheme comes into effect on 1 January 2025.

The UK government first consulted on the introduction of a SAF mandate in July 2022 and subsequently confirmed it would be introduced from 2025. This suggested at least 10% of UK aviation fuel should come from sustainable sources by 2030 and included key elements, such as robust sustainability criteria, to ensure fuels drive genuine benefits and sub-targets to incentivise diverse SAF production pathways.

A second consultation, in March 2023, focussed on the details of the scheme, key policy parameters and design of the SAF mandate. 

The mandate will start in 2025 at 2% of total UK jet fuel demand, increase on a linear basis to 10% in 2030 and then to 22% in 2040. From 2040, the obligation will remain at 22% until there is greater certainty regarding SAF supply.

The mandate will also include a cap on the feedstocks that are used in the hydroprocessed esters and fatty acids (HEFA) process. HEFA is currently the only commercially available SAF, however, it is dependent on limited feedstocks that cannot deliver our long-term SAF goals alone, the government states, adding that HEFA SAF has an important part to play in the 2020s alongside the commercial development of advanced fuels that are less dependent on limited feedstocks. Today’s publication confirms that HEFA supply will not be limited under the mandate trajectory for the first two years, before falling to 71% of the total in 2030 and 33% in 2040. This will allow SAF demand to be met while incentivising the development of new SAF technologies. 

To drive innovation and diversification, a separate obligation on power-to-liquid fuels will be introduced from 2028 and will reach 3.5% of total jet fuel demand in 2040. This will accelerate the development of this high-tech fuel, which is less dependent on feedstocks and can generate greater emission reductions. The government SAF mandate includes buy-out mechanisms 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, respectively. The government states that these 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, and therefore deliver emission reductions at an acceptable cost.

 The UK Government goes on to say this plan is part of its approach to ensure that the rationing of flights through ‘demand management’ is ruled out. The plan includes a review mechanism to help manage prices and minimise the impact on ticket fares for passengers. The government also has the power to change key limits within the mandate to block higher price rises in the case of SAF shortages – keeping the impact on consumers to a minimum.

Providing sufficient SAF is available, any increases in airfares as a result of SAF will fall well within the range of usual fluctuations in prices we see every year and the government has plans in place to prevent any major hikes.