UK Government announces Advanced Fuels Fund investment, RCM following SAF mandate implementation
UK's Chancellor of the Exchequer Rachel Reeves announced (29-Jan-2025) the government plans to invest GBP63 million into the Advanced Fuels Fund for 2025/26. Ms Reeves stated the award will support sustainable aviation fuel (SAF) producers across the UK in areas including Teesside and Humberside. The Department for Transport also published the government's response to the consultation on a revenue certainty mechanism (RCM), following the implementation of its SAF mandate in Jan-2025. The government confirmed:
- A guaranteed strike price mechanism will be progressed;
- The first tranche of signed revenue certainty mechanism contracts will be with United Kingdom">UK SAF projects that produce using non-HEFA technology and feedstocks;
- The counterparty will need to be a government backed entity.
Ms Reeves stated: "Once implemented, [the RCM] will encourage investment into the nascent UK SAF industry. Next steps on the RCM will be set out imminently. Taken together, our SAF commitments will support thousands of jobs, bring down our transport emissions, support our energy security and make the UK a clean energy superpower". [more - original PR] [more - original PR - II] [more - original PR - III] [more - original PR - IV]
Background ✨
The UK Government's SAF mandate, effective from 01-Jan-2025, requires 2% of jet fuel to be sustainable, with plans to increase this to 10% by 20301. Airlines UK CEO Tim Alderslade highlighted the mandate as a practical tool for reducing emissions and stressed the importance of expanding eligible feedstocks and cost-cutting incentives2. The UK has also introduced a revenue certainty mechanism to encourage investment in new SAF plants3.