The UK government’s planned “revenue certainty mechanism” intended to incentivize companies to invest in boosting the availability of sustainable aviation fuel (SAF) would be funded by jet fuel suppliers, under proposals distributed for industry consultation this month. Until March 31, the Department of Transport is taking comments on its proposals for the SAF Revenue Support Mechanism.
Intended to address barriers to SAF production in the UK, the proposed mechanism is also designed to support the government’s SAF mandate, which went into effect on January 1. It requires that at least 2% of all aircraft fuel delivered to aircraft operators at UK airports will need to be SAF from this year, rising to 10% in 2030 and 22% in 2040.
By the end of 2025, the government is aiming to have introduced all the required supporting legislation for the revenue certainty mechanism. It is proposing that jet fuel suppliers would pay a levy that would cover the cost of payments made to SAF producers to increase their output through investments in facilities that can range from £600 million ($775 million) and £2 billion before they achieve the required economies of scale.
The proposals indicate that the levies would vary over time in response to shifts in prices for UK-produced non-HEFA SAF.