Policy & Compliance
risk the investment landscape by establishing a guaranteed strike price (GSP) for SAF producers. The GSP provides a safety net for producers by establishing long- term contracts with a guaranteed price per litre of fuel produced. If the market prices drop below this threshold, the government- appointed counter-party covers the difference; conversely, if prices exceed the GSP, the producer pays the surplus to the counter-party. This ‘contract-for-difference’ style model is intended to unlock the capital investment required for UK- based SAF plants, none of which have reached a final investment decision (FID) to date. The creation of domestic SAF plants could create a robust domestic supply chain that would assist in meeting the Mandate targets. The UK government has also indicated that the first tranche of contracts offered under the RCM will likely prioritise non-HEFA SAF, on account of HEFA SAF being a more mature technology and the potential for greater carbon savings with non-HEFA technology. First contracts The Sustainable Aviation Bill will receive Royal Assent in 2026, with the government indicating its preference for all primary and secondary legislation to be in place by the end of 2026, with a plan to award the first contracts in late 2026 or early 2027. Once the first contract awards are granted, they are expected to provide a catalyst to the industry and should assist in ramping up production to meet the mandated targets. The stakes are high. With the 10% Mandate just four years away, the 2025 shortfall serves as a critical wake-up call. The rapid deployment of an effective RCM is a pre- requisite for a robust domestic supply chain that can assist the SAF industry in meeting its legal obligations under the Mandate. BIFA encourages Members to share their operational experiences regarding SAF integration and its impact on airfreight logistics – contact Jamie McKean (j.mckean@bifa.org). The insights of BIFA Members are vital, as BIFA looks to advocate a pragmatic and fair transition to sustainable aviation for the freight forwarding industry.
To bridge an initial performance gap, industry attention has shifted to the Revenue Certainty Mechanism, which is designed to de-risk the investment landscape by establishing a guaranteed strike price for SAF producers SAF Mandate rethink after fi rst year shortfall
T he Sustainable Aviation Fuel Mandate (the Mandate) has recently completed its fi rst year of operation following its commencement in January 2025. The Mandate is a key policy mechanism to secure demand for sustainable aviation fuel (SAF) by imposing a legal obligation on fuel suppliers in the UK to supply an increasing proportion of SAF over time: rising from 2% in 2025 to 10% in 2030, and eventually 22% by 2040. SAF is an alternative drop-in fuel used in the aviation industry, which is not derived from fossil fuels, and provides significant carbon emission savings compared with conventional jet fuel. There are a number of pathways to creating SAF and, as an evolving technology, more pathways are expected in the future. Currently the majority of SAF supplied is HEFA SAF, which is produced by converting waste oils, fats and greases through hydrogenation. However, other pathways such as making SAF from waste (non- HEFA SAF) or using renewable electricity to produce synthetic fuels (power to liquid SAF) are in early commercial and development stages. Most SAF commercially available today can offer up to an 80% reduction in carbon emissions
compared with conventional jet fuel; power to liquid SAF could provide even greater carbon savings when commercially available. SAF is widely considered to be the single most important technology to assist the aviation industry in becoming net zero by 2050. However, it faces significant challenges including limited supply with a correlating price premium, the need for significant capital investment in SAF plants, and a limited global supply of HEFA SAF to meet the total demand of the aviation industry. First year shortfall The Mandate was designed to assist industry in meeting these challenges, but its first year of operation has highlighted a gap between regulatory ambition and physical supply. Provisional data released in late October 2025 indicates that SAF accounted for only 1.63% of total UK jet fuel supply. Barring a significant year-end surge, the industry is poised to miss its initial 2% statutory target. To bridge this performance gap, industry attention has shifted to the Revenue Certainty Mechanism (RCM). Central to the Sustainable Aviation Fuel Bill currently progressing through the House of Lords, the RCM is designed to de-
“ BIFA encourages Members to share their operational experiences regarding SAF integration and its impact on airfreight logistics
22 | February 2026
www.bifa.org
Made with FlippingBook Annual report maker