Government Unveils £219m Package to Boost Sustainable Aviation Fuel Industry

The UK government has launched a major funding initiative designed to accelerate the production of sustainable aviation fuel (SAF) and strengthen the country's position in the emerging low-carbon fuels market.

Announced by the Department for Transport, the programme will make £219 million available to help scale up cleaner fuel technologies and encourage investment in domestic production facilities.

The first phase of the initiative will see £93 million allocated over the next two years to support projects considered closest to commercial operation. Businesses developing sustainable fuels for aviation and other transport sectors will be able to apply for funding when the scheme opens later this summer.

The new programme builds on previous government backing for the sector, with almost £200 million already invested through the Advanced Fuels Fund since 2022.

Ministers believe the latest package will help unlock additional private sector investment while accelerating the growth of a UK-based sustainable aviation fuel industry. Government forecasts suggest the sector could generate up to £5 billion in economic value and support around 15,000 jobs by the middle of the century.

Aviation, Maritime and Decarbonisation Minister Keir Mather said the funding would help bring innovative fuel technologies closer to market while creating skilled jobs and supporting economic growth.

Sustainable aviation fuel is regarded as one of the aviation industry's most practical near-term decarbonisation solutions because it can be used within existing aircraft fleets and airport infrastructure without requiring significant modifications.

According to Department for Transport estimates, SAF can reduce lifecycle greenhouse gas emissions by around 70 per cent compared with traditional jet fuel, depending on the feedstocks and manufacturing processes used.

The funding announcement comes alongside a wider review of the UK's Sustainable Aviation Fuel Mandate, which was introduced in January 2025. The policy requires fuel suppliers to gradually increase the proportion of sustainable fuel supplied to the aviation sector, beginning at 2 per cent and rising to 10 per cent by 2030 and 22 per cent by 2040.

Government officials are now seeking industry feedback on future fuel supply forecasts and how the mandate can continue to support investment and market growth as production capacity develops. Ministers have indicated that the existing long-term targets remain unchanged.

Industry leaders have consistently argued that large-scale investment in sustainable aviation fuel production requires both financial support and long-term policy certainty. While a number of UK projects are progressing using technologies such as waste-to-fuel conversion, ethanol-based production and synthetic fuel processes, challenges remain around financing, feedstock availability and production costs.

Although SAF currently accounts for only a small share of global aviation fuel consumption, expanding production capacity is widely viewed as a critical step in helping the aviation sector reduce emissions while continuing to meet future demand for air travel.

The latest funding package represents one of the government's most significant interventions in the sector to date and signals continued support for the development of a domestic sustainable aviation fuel industry.