UK Government Channels £63 Million into Sustainable Aviation Fuel Projects

The UK Government has announced a new wave of funding, £63 million, aimed at accelerating the production and use of sustainable aviation fuels nationwide. This investment comes as part of a broader strategy to decarbonise the aviation sector. It follows the implementation of the UK's Sustainable Aviation Fuel Mandate, which went into effect earlier this year.

Under the new mandate, at least 2 per cent of the UK’s total jet fuel must come from sustainable sources by 2025. That figure is set to rise to 10 per cent by 2030 and reach 22 per cent by 2040. These are ambitious targets, backed by a combination of regulation and direct government support.

Aviation Minister Mike Kane said: “This £63m is lift off for Britain’s green aviation revolution. We’re not just backing brilliant British innovation, we’re creating thousands of high-skilled jobs and positioning the UK at the forefront of the global sustainable aviation market.

“From the labs of Sheffield to the runways of the future – this is how we kickstart economic growth, secure energy independence, and make Britain a clean energy superpower.”

So far, the Government has committed £198 million through its Advanced Fuels Fund to help scale up next-generation aviation technology. The latest £63 million will be allocated among 17 projects nationwide. These include major initiatives, such as LanzaTech’s rollout of commercial-scale SAF plants and a demonstration facility at the University of Sheffield, which will combine SAF production with carbon capture technology.

The funded projects are exploring a variety of sustainable fuel options—from waste-derived fuels and green hydrogen to fuels created from industrial residues and innovative methanol-to-jet-fuel conversions. It’s a broad and diverse portfolio, reflecting the complex challenge of replacing conventional jet fuel on a large scale.

Sustainable aviation fuel is expected to play a central role in helping the UK reduce its aviation-related greenhouse gas emissions. The government estimates that SAFs could help cut up to 6.3 million tonnes of CO₂ equivalent by 2040. By 2030, the country aims to utilise around 1.2 million tonnes of SAF annually, enough to power over 3,000 long-haul flights each year.

The economic case is strong too. The SAF mandate is forecasted to contribute £1.8 billion to the UK economy while creating approximately 10,000 jobs. The latest funding round alone is expected to support around 1,400 roles across the 17 selected projects.

To help de-risk the market, the Government introduced a Revenue Certainty Mechanism in May. This tool enables SAF producers to secure a fixed price for their product. If market prices drop below that level, the Government will cover the difference. If prices go above it, the producers return the extra earnings. The goal is to provide financial stability for early-stage producers and encourage long-term investment in the sector.

Still, the road ahead isn’t without its hurdles. While government support is strong, demand for SAF has yet to catch up with projected supply. Some projects are struggling to secure the capital needed to move forward. Meanwhile, critics continue to raise concerns about the actual climate impact of specific SAF production pathways, questioning whether the full lifecycle emissions are sufficiently low to justify a large-scale rollout.

For now, the UK is relying on SAF as a key component of its aviation decarbonisation plan. With the right investment and innovation, these fuels can shift from being an experimental option to a mainstream solution for cleaner skies.