UK’s Sustainable Aviation Fuel (SAF) mandate faces production hurdles
UK’s Sustainable Aviation Fuel (SAF) mandate faces production hurdles
Questions around feedstock, technology and investment will have to be ironed out for the mandate to work.
The United Kingdom has unveiled its SAF mandate for the aviation sector. It sets annual targets for jet fuel suppliers that begin at 2% in 2025 and gradually increase to 22% by 2040. However, will there be enough feedstocks and refineries to meet those targets?
Speaking at the Sustainable Aviation Fuel Supply Chain Initiative in London. Hazel Schofield, Deputy Head of Low Carbon Fuels at the Department for Transport, outlined the mandate's primary objective. According to Schofield, it aims to reduce greenhouse gas emissions and supports the UK's net zero commitment, aligning with the Jet Zero Strategy by establishing a long-term incentive for SAF supply.
A gradual restriction on HEFA fuels
Under the mandate, eligible fuels encompass biofuels derived from waste or residues, recycled carbon fuels, low-carbon hydrogen, and power-to-liquid fuels. The amount of HEFA (hydroprocessed esters and fatty acids) fuels that can be used is also capped.
Though HEFA fuels currently form the vast majority of SAF supply in the UK and Europe, Schofield discussed the need to foster “generation two” fuels sourced from feedstocks such as municipal solid waste.
The HEFA cap will restrict HEFA to 71% of the UK’s SAF supply by 2030, decreasing to 35% by 2040.
The mandate has elicited mixed reactions from industry stakeholders. Matt Finch, UK Policy Manager at Transport & Environment (T&E), said he was “underwhelmed”, criticising the "measly 3.5% PtL sub-mandate in 2040," which is far less ambitious than the European Union's 10% E-Fuels 2040 sub-mandate.
Finch also raised concerns about whether the 22% SAF mandate by 2040 would be sufficient to keep pace with the potential growth of UK aviation.
On the other hand, Lara Maughan from the airline industry body IATA commended the mandate as "pragmatic and helpful," acknowledging the necessity to prioritise SAF scale-up while recognising the evolving nature of the SAF ecosystem.
Feedstocks mean little without production capacity
Speaking later that afternoon, Alastair Blanshard, Director of Sustainable Aviation at ICF, cautioned that while there is a global consensus that enough bioenergy feedstocks are, in theory, available for SAF, the allocation of these resources remains a point of contention among various sectors.
At the same time, he noted that the Energy Transitions Commission (ETC) and the International Energy Agency (IEA) both agree that aviation should have access to some of these feedstocks.
Blanshard said the UK possesses significant potential for SAF production, ranging from 3.5 to 10.7 million tonnes, but this largely hinges on policy decisions that allocate feedstocks to aviation.
However, Blanshard emphasised that the primary bottleneck in the industry is not feedstock availability but rather refining capacity:
"A feedstock is only a feedstock in theory if we don't have the technology or the commercial capability to turn that into a fuel."
Attracting investors and ensuring revenue
In practical terms, an investment of at least $500 million is needed to create a commercial-scale SAF plant. That magnitude of investment requires reasonable certainty of a financial return, with a supportive regulatory approach combining mandates to create demand and incentives to encourage investment.
Currently, the UK has only one SAF facility operating at a commercial scale, the Phillips 66 plant at Humberside, which supplies British Airways at its main London Heathrow (LHR) hub.
To partially address this issue and to attract investors to UK SAF projects, the UK government has published a consultation on a revenue certainty mechanism, with the guaranteed strike price emerging as the preferred option.
This approach entails the government guaranteeing SAF from refineries at a predetermined price to give investors and energy companies the confidence they need to construct these facilities.
The conference highlighted several innovative generation two and three SAF projects in the pipeline, including LanzaTech's Project Dragon facility in Wales, Lighthouse Green Fuels owned by Saudi Arabia's AlFanar, waste-to-fuel company Avioxx, and PtL start-ups Carbon Neutral Fuels, Zero and Oxccu (see our pieces on Carbon Neutral Fuels and Zero).
Though there needs to be a note of caution, as none of them have actually broken ground on a SAF plant yet, these projects demonstrate the potential for the UK to develop a robust domestic SAF industry that can serve the needs of airlines operating in the UK.