Recommendation 13

HM Government Deferred

Fuelling the future: motive power and connectivity 13 incentive mechanism to drive demand for SAF but will also provide price support that should stimulate a domestic SAF market. On 30 March 2023, the Government launched its second consultation on the UK SAF mandate, providing industry with detail on how it will work. In addition, Government’s grant funded competitions, including the Advanced Fuels Fund (AFF), which will take UK SAF plant projects through to construction, are critical to driving investment in a UK SAF market. The first round of funding of the AFF awarded funds to five projects in December 2022; and subject to Ministerial agreement, the Government expects to launch a second round shortly. The Government has been considering what longer term actions might need to be taken to stimulate SAF investment in the UK. This includes considering options to provide revenue certainty to SAF producers and investors, including a version of Contracts for Difference model used for low carbon electricity generation. In October 2022, the Government commissioned an independent evaluation into ‘Developing a UK SAF industry’ to identify the conditions necessary to create a successful UK SAF industry and recommendations to support it. On 17 April 2023, the Government published the report summarising the evaluation and a response, which sets out how the Government is already taking action to address some of the report’s recommendations, and what more could be done to secure meaningful investment in UK SAF production. It also states next steps including that the Government will work together with industry through the Jet Zero Council to consider the best way to support the aviation industry to decarbonise, including considering options for additional revenue certainty for a UK SAF industry to be provided via an industry funded intervention. If required, following further engagement, the Government will launch a formal consultation this summer. The Government continues to support the development of new low and zero carbon aerospace technology, including hydrogen aircraft, through the Aerospace Technology Institute Programme with £685m of government funding over three years. To drive the development of hydrogen in aviation in 2022, the Government established a new sub- group structure of the Jet Zero Council on Zero Emission Flight. Rail Recommendations 16 and 17 were grouped and answered as one.