Tom Oldham, Aerospace Policy Adviser at ADS, explains why sustainable aviation fuel is gaining traction
2025 is a landmark year for the UK’s aviation industry as it continues to make the transition to net zero. Recognised as a carbon-intensive sector, aviation faces a steep challenge to cut emissions. Yet meeting those objectives in lockstep with increasing global demand represents a significant opportunity for UK aerospace, which continues to be at the cutting edge of engine technology, wing production, aerostructures and design.
The truth is that the transition to net zero will be met by a cocktail of solutions. The global aircraft fleet is already 80% more fuel efficient than it was half a century ago, while each new generation of aircraft is 15-25% more fuel efficient than the preceding model.
That said, if more efficient and quieter aircraft are one solution, are there others? Airspace modernisation and contrail avoidance will go some way to reducing emissions. Disruptive technologies such as hydrogen and battery-powered aircraft will also support the transition. But hydrogen-powered aircraft for long-haul flights are not likely to arrive before 2050, and electric aircraft will serve a different purpose, operating at a smaller, regional scale.
Perhaps the most significant near-term solution, more efficient aircraft notwithstanding, is sustainable aviation fuel (SAF). SAF reduces greenhouse gases by 70% on a lifecycle basis compared to kerosene. Further, in being compatible with existing infrastructure and technology, SAF represents an ideal alternative.
2025 is a big year for SAF in the UK. At the start of this year, a SAF Mandate was introduced, requiring fuel suppliers to use SAF for 2% of the fuel blend this year. This increases linearly to 10% by 2030, setting a guaranteed level of demand and supporting increased SAF production.
Sustainable aviation fuel policy priorities
The UK Government expects industry to require approximately 286 million litres of SAF this year to meet the mandate. But industry is already delivering above and beyond expectations, with provisional statistics from the Department for Transport revealing that 330 million litres were supplied to the UK last year alone. For the first time, the statistics also showed that the UK took delivery of 2 million litres of second-generation SAF, that is to say, organic municipal solid waste and sewage sludge.
With that said, almost all the SAF being supplied to the UK is derived from vegetable oils, fatty acids and waste cooking oils. While that represents the cheapest and most plentiful SAF, policies must be introduced to support advanced SAFs, which do not draw on valuable feedstocks. Action is also required to drive domestic SAF production, ensuring the UK does not miss out on a prized economic opportunity. Contextually, the Department for Transport estimates that SAF production could support up to 10,000 jobs by 2035 and generate £1.8 billion gross value added every year.
That is why Parliament is currently considering a Bill to introduce a Revenue Certainty Mechanism (RCM). This will give industry the confidence it needs to invest in SAF production by setting a General Strike Price, the same mechanism used to incentivise investment in renewable energy through the Contracts for Difference Scheme.
The aviation and aerospace sectors warmly welcome this initiative. Access to a reliable, affordable stream of SAF will be critical in the years ahead. However, the UK is competing in a global market where other nations are also standing up their own SAF industries.
It is, therefore, disappointing that the RCM will be funded by a levy on aviation fuel suppliers when the sector already pays for sustainability initiatives through the Emissions Trading Scheme (ETS). The UK also levies the highest rate of air passenger duty in Europe by a considerable margin. While we accept the ‘polluter pays’ principle, industry levies can only be used a few times before the UK’s international competitiveness is fundamentally compromised.
In internationalised sectors like aerospace and aviation, companies are highly mobile and operate out of those countries with favourable tax regimes and business environments. The UK should not risk future competitiveness by assuming industry has boundless scope to fund sustainability initiatives.
The single biggest thing the Government must do, however, is pass the Bill quickly. Currently, the Government have committed that the Bill will be enacted by the end of 2026. However, this leaves too little time for industry to respond before the SAF Mandate’s Power to Liquid obligation comes into force in 2028. Given the scale of a SAF plant, it is doubtful that the industry can navigate the planning process, complete construction, and operationalise in such a short period.
Succeeding in the global race to supply the SAF industry
The window of time for getting this right is narrow and closing quickly. While we are encouraged that the UK Government’s policy direction of travel is the right one, there is no time to waste if we are going to succeed in the global race to supply the SAF industry’s needs to meet its obligations.