UK to offer additional SAF project funding, responds to public consultation on SAF subsidies
SOURCE: U.K. Department for Transport
February 6, 2025
BY Erin Voegele
The U.K. Department for Transport on Jan. 29 announced it will investment £63 million ($78.35 million) over the next year under its Advanced Fuels Fund to support sustainable aviation fuel (SAF) producers. The agency also issued the government’s response to its consultation on a revenue certainty mechanism for SAF.
The Advanced Fuels Fund provides grant funding to first-of-a-kind commercial and demonstration-scale SAF projects in the U.K. Past award winners include Velocys plc, LanzaTecgh U.K. Ltd., Fulcrum BioEnergy Ltd., Alfanar Energy Ltd., Zero Petroleum, Willis Sustainable Fuels, OXCCU Tech, Nova Pangaea Technologies, Esso Petroleum Co., Carbon Neutral Fuels, Arcadia e-Fuels, Alfanar Energy, and Abundia Biomass-to-Liquids. The agency did not disclose when it will begin accepting applications for the upcoming round of funding.
Advertisement
U.K. Department of Transport on April 25 launched a public consultation on revenue certainty options to support the SAF industry in the U.K. The revenue certainty mechanism aims to reduce the risk of uncertain revenues for emerging SAF plants, helping to attract investment to U.K. SAF projects and increase domestic SAF production.
The public consultation set out four options for the revenue support mechanism along with details that describe how quickly each of the four mechanisms could be delivered and the scale of investment each is likely to bring forward. The government accepted public comments on the four options through June 20, 2024.
The agency has now released its response to that public consultation process. The response confirms that the government will move forward with a guaranteed strike price mechanism; the first tranche of signed revenue certainty mechanism contracts will be with U.K. SAF projects that produce using non-HEFA technology and feedstocks; and that the counterparty will need to be a government-backed entity.
Advertisement
Related Stories
The U.S. Energy Information Administration maintained its 2025 and 2026 forecasts for biodiesel, renewable diesel and “other biofuel” production, which includes SAF, in its latest Short Term Energy Outlook, released May 6.
Sunoco LP on May 5 announced a definitive agreement to acquire all outstanding shares of Parkland Corp. The Burnaby refinery, which recently began to produce SAF, is among the assets subject to the transaction.
The Canadian International Trade Tribunal on May 5 announced that a preliminary investigation launched earlier this year did not find evidence that imports of U.S. renewable diesel are causing harm to Canada’s domestic renewable diesel industry.
SAF production is growing in the U.S. as new capacity comes online. U.S. production of “other biofuels,” the category the U.S. EIA uses to capture SAF data in its reports, approximately doubled from December 2024 to February 2025.
Reps. Mike Carey, R-Ohio, and Mariannette Miller-Meeks, R-Iowa, on May 1 introduced legislation that aims to retroactively extend the biodiesel blenders tax credit (BTC) and the second-generation biofuel producer tax credit.
Upcoming Events
