Legislation Advances to Detailed Scrutiny
The Sustainable Aviation Fuel Bill is scheduled to begin its committee stage in the House of Lords on Wednesday, December 10, 2025, with further sessions planned for December 17, 2025. This critical phase involves a 'line by line examination' of the bill, allowing members to propose and consider amendments to its clauses.
The primary objective of the bill is to foster the production of sustainable aviation fuel (SAF) within the United Kingdom. It seeks to achieve this by introducing a revenue certainty mechanism, designed to mitigate financial risks for companies investing in SAF manufacturing facilities.
Revenue Certainty Mechanism and Funding
The proposed revenue certainty mechanism involves a government-owned counterparty entering into contracts with SAF producers. These contracts will guarantee a stable 'strike price' for SAF over a specified period. Should the market price for SAF fall below this agreed strike price, the government entity will compensate the producer for the difference. Conversely, if the market price exceeds the strike price, the producer will return the surplus to the government.
Funding for this mechanism will be generated through a levy imposed on aviation fuel suppliers, aligning with the 'polluter pays' principle rather than relying on general taxation. This approach aims to create a predictable financial environment essential for attracting significant investment into the nascent UK SAF industry.
Complementing the UK's SAF Mandate
The Sustainable Aviation Fuel Bill works in conjunction with the UK's existing SAF Mandate, which officially came into force on January 1, 2025. This mandate legally obliges aviation fuel suppliers to incorporate an increasing proportion of SAF into their fuel mix:
- 2% of total jet fuel demand by 2025
- 10% by 2030
- 22% by 2040
The mandate also includes specific targets for Power-to-Liquid (PtL) fuels, starting at 0.2% in 2028 and reaching 3.5% in 2040, and implements caps on HEFA-based SAF to encourage the development of more advanced technologies.
Economic and Environmental Impact
The aviation industry has largely welcomed the bill, having advocated for a revenue certainty mechanism to support investment in SAF production. Proponents suggest that a thriving UK SAF industry could contribute significantly to the economy, potentially generating £16.7 billion per year in exports by 2050 and supporting approximately 130,000 jobs.
Environmentally, SAF is crucial for decarbonizing aviation, offering an average reduction of 70% in greenhouse gas emissions over its lifecycle compared to conventional jet fuel, with some advanced SAF types achieving over 90% reduction. The bill represents a key step in the UK's 'Jet Zero' strategy, aiming for net-zero aviation by 2050.
5 Comments
Mariposa
Another hidden tax on air travel. Consumers will pay the price for this 'green' initiative.
Muchacha
It's good to see the UK investing in future industries and jobs. However, the success hinges entirely on manufacturers actually delivering SAF at scale and competitively.
Bella Ciao
The revenue certainty mechanism is clever for attracting investment, but the government needs robust oversight to ensure taxpayers aren't left footing a massive bill if the market tanks.
Bermudez
Government picking winners again. This 'certainty' mechanism sounds like corporate welfare.
Africa
This bill is a step in the right direction for greener flights, but it shouldn't distract from the bigger picture. We still need to explore demand reduction strategies alongside technological solutions.