In a significant move to decarbonise the aviation sector, the UK Government has announced the introduction of a Sustainable Aviation Fuel (SAF) Revenue Certainty Mechanism. This initiative aims to provide financial stability for investors and producers in the SAF industry, encouraging the development of domestic production facilities and reducing reliance on imported fuels.[1]
What is the Sustainable Aviation Fuel Revenue Certainty Mechanism?
The Revenue Certainty Mechanism is a policy tool designed to guarantee a minimum price for SAF, thereby mitigating market risks for producers and investors. By ensuring a stable return on investment, the mechanism seeks to stimulate the construction of SAF production plants within the UK, and is expected to be funded through a levy on jet fuel suppliers, adhering to the ‘polluter pays’ principle. This approach mirrors successful strategies employed in the renewable energy sector, such as Contracts for Difference (CfDs), which have been instrumental in scaling up wind energy production.[2]
The Department for Transport (DfT) has confirmed that the RCM will be implemented by the end of 2026, subject to parliamentary approval. The first contracts under this scheme will prioritise projects utilising non-hydrotreated esters and fatty acids (non-HEFA) technologies, promoting innovation and diversification in SAF production methods.[3]
Why is the Revenue Certainty Mechanism important for the UK’s aviation sector?
The aviation industry is a significant contributor to greenhouse gas emissions. Transitioning to SAF, which can reduce lifecycle carbon emissions by up to 70 per cent compared to conventional jet fuel, is crucial for meeting the UK’s net-zero targets by 2050.[4]
However, SAF is currently more expensive than traditional fuels, and domestic production is limited. The Revenue Certainty Mechanism aims to address these challenges by providing financial incentives for producers, thereby increasing the availability and affordability of SAF.[5]
Investing in SAF production is capital-intensive, with estimates ranging from £600 million to £2 billion for new commercial plants. The RCM addresses the main barrier to investment – revenue uncertainty. By ensuring a stable income stream, the mechanism makes SAF projects more attractive to investors, facilitating the growth of a domestic SAF industry.[6]
This financial assurance is particularly vital as the UK prepares to implement its SAF mandate in 2025, which requires a gradual increase in SAF usage, reaching 10 per cent of total jet fuel by 2030.
What are the current challenges facing SAF production in the UK?
Despite the Government’s clear commitment to developing a domestic Sustainable Aviation Fuel (SAF) industry, several significant challenges remain. High production costs continue to be a major barrier, with SAF currently costing around twice as much as conventional jet fuel – making it a less viable option for airlines with tight margins. The UK also suffers from limited domestic capacity, with only one operational SAF refinery and most fuel still being imported, particularly from China. Infrastructure plans have faced delays; initial ambitions to have five refineries under construction by 2025 have not materialised. Furthermore, uncertainty around the timeline for introducing the Revenue Certainty Mechanism has raised concerns in the industry, with some fearing the necessary legislation may not be passed until 2027.[7]
How will the Revenue Certainty Mechanism impact consumers and the environment?
While the mechanism is expected to boost SAF production, it may also lead to increased airfares. Virgin Atlantic CEO Shai Weiss estimated that ticket prices could rise by £20 to £40 per sector by 2030 due to the higher costs associated with SAF.[8]
Nevertheless, the environmental benefits are significant. Increased use of SAF will substantially reduce the aviation sector’s carbon footprint, contributing to the UK’s broader climate goals. Moreover, developing a domestic SAF industry will create jobs and stimulate economic growth.[9]
What are the anticipated economic and environmental benefits?
The implementation of the RCM is expected to catalyse significant economic growth within the UK. The Government anticipates the creation of over 10,000 green jobs by 2030, with this number potentially rising to 60,000 by 2050.[10] Environmentally, increased SAF production and usage will contribute substantially to the UK’s net-zero targets. SAF can reduce lifecycle greenhouse gas emissions by up to 85 per cent compared to conventional jet fuel, making it a cornerstone in the decarbonisation of aviation.[11]
What are the next steps for the UK Government and the aviation industry?
The Government has committed to a timeline that sees the RCM fully operational by the end of 2026. This includes ongoing consultations with industry stakeholders to refine the mechanism’s design and implementation. In parallel, the DfT continues to support SAF development through the £165 million Advanced Fuel Fund, aiming to have at least five commercial SAF plants under construction by 2025.[12]
To make the Revenue Certainty Mechanism a success, the UK Government has some clear priorities. It needs to move quickly on setting out timelines and regulations so that investors know what to expect and can plan with confidence. There’s also a pressing need to back infrastructure—specifically, to help get SAF production facilities off the ground with proper funding and faster, simpler planning processes. Just as importantly, the Government should be working closely with industry to make sure everyone is pulling in the same direction and learning from each other. Done right, these steps could help the UK lead the way on cleaner aviation while supporting jobs and economic growth at home.[13]
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[1] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[2] Financial Times, UK forecasts small role for green airline fuel by 2040 despite Reeves’ claims, 29 April 2025, Link
[3] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[4] The Times, Green flying will mean higher prices. Can it take off?, 21 July 2024, Link
[5] The Times, Green flying will mean higher prices. Can it take off?, 21 July 2024, Link
[6] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[7] Financial Times, UK forecasts small role for green airline fuel by 2040 despite Reeves’ claims, 29 April 2025, Link
[8] The Times, Green flying will mean higher prices. Can it take off?, 21 July 2024, Link
[9] Financial Times, UK forecasts small role for green airline fuel by 2040 despite Reeves’ claims, 29 April 2025, Link
[10] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[11] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[12] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
[13] Department for Transport, Sustainable aviation fuel revenue certainty mechanism, 28 April 2025, Link
