UK government to launch SAF revenue support scheme

The U.K. Department for Transport on Sept. 4 announced plans to introduce a revenue certainty mechanism to support domestic sustainable aviation fuel (SAF) production. The initiative aims to bolster the development of SAF and drive further investment, supporting the government’s goal of having at least five commercial SAF projects under construction by 2025.

The Department for Transport said it will launch a public consultation on the design and delivery of the revenue certainty scheme. According to the agency, the scheme will be funded by industry and aims to “give the aviation sector the launchpad to confidently invest in SAF and transition away from fossil fuel reliance.”

A delivery plan published by the Department for Transport sets out timelines associated with the design and implementation of the scheme. According to that plan, the agency expects to open a public consultation period on the scheme during the first half of next year, with the scheme complete as early as 2026.

The revenue certainty scheme complements a proposed U.K. SAF mandate that would require jet fuel suppliers to blend SAF into aviation fuel starting in 2025. A public comment period on the proposed SAF mandate closed in June.

Velocys plc has applauded the Department for Transport’s announcement, stressing the revenue support scheme would benefit its proposed 20 MMgy Altalto Immingham facility, which aims to produce SAF from municipal and commercial solid waste.  

“Yesterday’s announcement is very positive for the U.K. SAF industry and especially for the Altalto project,” said Henrik Wareborn, CEO of Velocys. “Thanks to our progress with engineering and licensor engagements, Altalto is leading the way as the furthest developed within the group of projects supported under the Advanced Fuels Fund. It stands to benefit from the revenue certainty scheme as well as from the SAF mandate.

“This commitment from the government is a major step towards unlocking the capital required to further fund SAF projects in the U.K.,” he continued. “As noted by the Department for Transport (DfT), this revenue certainty will provide SAF producers greater assurance over the earnings from the SAF produced in projects such as Altalto, enabling projects to attract the necessary finance. We look forward to engaging further with the DfT and seeing more detail on the mechanism and the timescale in order for the Government target of five plants in construction by 2025 to be met.”