Government unveils revenue certainty mechanism to boost SAF sector
March 3, 2025
The UK government has announced plans to introduce a new revenue certainty mechanism (RCM) aimed at stabilising the economic landscape for sustainable aviation fuel (SAF) producers.
The initiative, revealed as part of a consultation launched on 3 March 2025, is designed to provide financial stability to SAF suppliers, encourage investment in the sector, and support the UK’s broader aviation decarbonisation strategy.
A key challenge for the SAF industry has been the price volatility of green fuels compared to conventional fossil-based jet fuel. The proposed RCM will function as an industry-funded price guarantee, ensuring a steady income flow for SAF producers. This mechanism is expected to mitigate financial uncertainty, reducing risks for investors and helping to attract capital into new and existing UK-based SAF production facilities.
The government’s consultation outlines that the RCM will be designed to limit cost implications for airlines and consumers. While additional costs associated with SAF adoption are expected, officials have emphasised that any increases in ticket prices will remain within standard market fluctuations.
The introduction of the RCM follows the launch of the SAF Mandate in January 2025, which legally requires a growing percentage of aviation fuel to come from sustainable sources. By establishing guaranteed revenue streams alongside mandatory demand, the government aims to create a stable economic environment for the SAF industry, fostering long-term growth and innovation.
Industry analysts suggest that these measures will not only accelerate SAF production but also support wider government ambitions to position the UK as a leader in clean aviation technology. The SAF sector is projected to contribute up to £5 billion to the UK economy by 2050 and create approximately 15,000 jobs.
The revenue certainty mechanism is also expected to play a crucial role in aligning aviation expansion with climate objectives.
The consultation period will seek input from industry stakeholders, with final policy details anticipated later this year.
Aviation Minister, Mike Kane, said: ” We are committed to building the technology and fuel supply that will see greener flying become a reality in a way that protects consumers.
“As part of our Plan for Change, these proposals will power up SAF production in the UK, support thousands of green jobs and bolster expansion plans.”
Tim Alderslade, Chief Executive of Airlines UK, said: “UK airlines support the RCM as a means of driving production in SAF and ensuring the industry can comply with the mandate.
“We look forward to working with government on its design with a particular focus on encouraging a competitive market and supporting FOAK plants. The goal must be the production of as much SAF at the cheapest possible price for consumers, to help the industry get to net zero, support growth in UK aviation whilst minimising the impact on passengers.
Karen Dee, Chief Executive of AirportsUK, said: “SAF will play a key role in decarbonising aviation and a revenue certainty mechanism will not only ensure the UK can access enough supply but also that we can benefit from thousands of jobs and billions in investment.
“Airports will work with government as part of the aviation sector to develop the right solution that will give the market the confidence it needs to bring investment forward, enabling a new UK industry producing homegrown SAF to emerge.
“This, in turn, will allow the UK’s global air connectivity to expand sustainably within our net zero targets and play an increasing role in growing our economy, something the government is prioritising to drive up the prosperity of the whole country.”
