Sustainable Aviation Fuel Revenue Certainty Mechanism

Sustainable aviation fuel is integral to reaching net zero aviation by 2050. It reduces greenhouse gas emissions by around 70% on average over the lifecycle of its production and use when replacing fossil kerosene. It is also an enabler of growth, and can provide good, skilled jobs across the UK.

That is why this Government has taken rapid action to support SAF. Just weeks into office, we reiterated our commitment to the SAF mandate. In November, we signed it into law, and it has been in place since January.

The SAF mandate is the UK’s key policy mechanism to secure demand for SAF. It delivers GHG emission savings by encouraging the use of SAF within the aviation industry. It does this by setting a legal obligation on fuel suppliers in the UK to supply an increasing proportion of SAF over time. Suppliers receive certificates for the SAF they supply. Certificates are issued in proportion to the level of GHG emission reductions that the fuel delivers—that is, the greater the savings, the greater the number of certificates they receive. The SAF mandate started at 2% of total UK jet fuel demand in 2025 and increases linearly to 10% in 2030 and then to 22% in 2040. It could deliver up to 6.3 million tonnes of carbon savings per year by 2040.

We are also committed to developing the UK SAF industry to secure a UK supply of SAF, attract investment and create good green jobs across the UK.

In January, we announced an additional £63 million of funding for the advanced fuels fund, our grant funding programme for UK SAF production, extending the programme for another year.

We are also introducing a revenue certainty mechanism to help attract investment into UK SAF production. Under the SAF revenue certainty mechanism, SAF producers will enter into a private law contract with a Government-backed counterparty. These contracts will set a strike price for SAF. If producers sell their SAF for below the strike price, the counterparty makes payments of the difference; if the SAF is sold for above the strike price, the producer makes payments of the difference to the counterparty. This addresses the most significant constraint on investment in SAF production and sends a clear signal to investors: that this is a serious UK investment opportunity.

This Government have made significant progress towards delivering the revenue certainty mechanism. We announced in the King’s speech that we will be introducing a revenue certainty mechanism Bill in the first Session of this Parliament and will have the legislation in place by the end of 2026 at the very latest.

In 2050, up to 15,000 jobs and £5 billion gross value added in the UK could be supported with future low-carbon fuel production for the domestic and international markets. The revenue certainty mechanism, along with the Government’s modern industrial strategy, will provide a launchpad for this sector to drive growth and investment.

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