Sustainable Aviation Fuel Bill: HL Bill 138 of 2024-26
The Sustainable Aviation Fuel Bill is a government bill. It was introduced in the House of Lords on 20 October 2025 and is due to receive its second reading on 20 November 2025. The bill would introduce a revenue certainty mechanism to support the production of sustainable aviation fuel (SAF) in the UK. It would do this by designating a counterparty (a company wholly owned by the government) to engage in contracts with SAF producers to guarantee the price of the sale of eligible SAF. The government has said that SAF is one of the most effective ways to reduce greenhouse gas emissions from aviation, as SAF is a ‘drop-in fuel’ that does not require modifications to existing aircraft. Current supply of SAF is limited. The government has claimed the bill would support SAF production in the UK by providing revenue certainty and thereby reducing risk to investors in SAF production facilities. There was broad cross-party support for the bill during its House of Commons stages.
The Sustainable Aviation Fuel Bill is a government bill. It was introduced in the House of Commons on 14 May 2025 and completed its third reading on 15 October 2025. The bill was introduced in the House of Lords on 20 October 2025 and is due to receive its second reading on 20 November 2025. The Department for Transport has produced explanatory notes (ENs) for the bill.
The bill would introduce a revenue certainty mechanism to support the production of sustainable aviation fuel (SAF) in the UK. It would do this by designating a counterparty (a company wholly owned by the government) to engage in contracts with SAF producers to guarantee the price of the sale of eligible SAF. To finance the revenue certainty mechanism the bill would introduce a levy on conventional aviation fuel suppliers.
Conventional aviation fuel is predominantly made from crude oil. Sustainable aviation fuel is a lower-carbon alternative produced from sources such as used cooking oils and fats, municipal waste, or from renewable energy sources. Development and production of SAF is capital intensive and global supply is limited.
The UK government currently imposes a ‘SAF mandate’ on the aviation industry that 2% of aviation fuel used in the UK must be SAF. This target is set to rise to 10% by 2030 and 22% by 2040.
Transport accounted for around 30% of the UK’s greenhouse gas emissions in 2023, and aviation was the second largest contributor of that figure. The government has said that SAF is one of the most effective ways to reduce greenhouse gas emissions from aviation, as SAF is a ‘drop-in fuel’ that does not require modifications to existing aircraft. The government has claimed the bill would support SAF production in the UK by providing revenue certainty and thereby reducing risk to investors in SAF production facilities.
During the bill’s House of Commons stages there was broad cross-party support for the bill, and it passed with only minor, technical government amendments.
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