A New Era for Clean Skies
Aviation has long been cast as a high-flier in carbon emissions, with few viable alternatives to fossil-based jet fuel. Yet, a new UK legislative initiative—the Sustainable Aviation Fuel Bill 2024-25—is setting a course toward change. Introduced in May 2025, this bill offers more than regulation—it presents a stabilising force in an unpredictable market.
Beyond Mandates: Understanding the SAF Puzzle
The UK’s current SAF mandate requires 2 percent of aviation fuel to come from sustainable sources by 2025, with targets scaling to 10 percent by 2030. But mandates, while directional, are not motivational for producers facing high investment risks and volatile pricing.
What this bill proposes is not just another policy layer—it is a fundamental shift in how the government supports emerging technologies. It introduces a revenue certainty mechanism, a safeguard that could finally unlock large-scale investment in sustainable aviation fuel infrastructure.
What Is the Revenue Certainty Mechanism?
The bill’s core innovation is a strike price model: a pre-agreed price at which producers can sell SAF. If the market price falls short, the government-owned counterparty makes up the difference. If prices soar, the producer pays back the excess.
This approach mimics the Contracts for Difference model used successfully in renewable energy, and now adapted to aviation. It provides a stable return profile—essential in attracting long-term private capital.
A Vote for Homegrown Innovation
Unlike older HEFA fuels—derived from used cooking oils and already commercially viable—the bill prioritises contracts for second and third generation SAF. These include waste-based fuels and cutting-edge e-fuels made with green hydrogen. This focus is not incidental. It acknowledges both the environmental limitations of HEFA and the global race to lead the next generation of SAF technologies.
Who Pays and Who Gains?
The bill outlines that SAF revenue support would be funded through a levy on aviation fuel suppliers. This levy could ultimately pass through to ticket prices, sparking debate on cost equity. Yet, the structured framework introduces predictability for all stakeholders—from investors to airlines—enabling them to plan around known costs rather than speculative future markets.
Critics, such as the International Air Transport Association, argue for funding mechanisms tied to emissions trading revenues instead. However, the bill’s firm design offers clarity and momentum in a sector that urgently needs both.
Stakeholders Signal Lift-Off
Industry response has been broadly positive. Airlines UK welcomed the bill and signalled readiness to support a competitive and transparent bidding process. Climate groups, while praising the exclusion of commercially mature HEFA SAFs, have pushed for stricter sustainability thresholds.
The government anticipates the first contracts to be awarded by 2026, suggesting a tight legislative schedule that, if met, could place the UK among global leaders in sustainable aviation development.
Conclusion: Not Just a Bill, a Blueprint
This bill is more than an economic instrument. It is a signal of strategic intent—a commitment to decarbonisation not just through regulation, but through reliable market frameworks.
By marrying legislative authority with financial predictability, the UK is crafting a future where sustainable aviation fuels can thrive. In doing so, it acknowledges that the decarbonisation of aviation is not only a technological challenge but also a financial one. The Sustainable Aviation Fuel Bill 2024-25 might just be the blueprint needed to bridge that gap.
Download Document File Here: Sustainable Aviation Fuel Bill 2024-25