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The government’s proposed revenue certainty mechanism for producers of sustainable aviation fuel (SAF) should not be funded by the taxpayer, a collection of green charities has said.
SAFs are typically derived by combining jet fuel with alternatives such as biofuels or recycled oils from industrial food facilities to achieve carbon savings of up to 70 per cent. They are often considered to be the most carbon-efficient option for aviation given the limits of current technology, which leaves electric and hydrogen planes in the prototype stage for now.
In September, the Department for Transport (DfT) announced a revenue certainty mechanism to kickstart the industry, which could initially carry financial risks until demand for SAF increases.
A group of green charities led by the European Federation for Transport and Environment, including Greenpeace and the New Economics Foundation, said it was “essential” that the government do not backtrack on plans to make the mechanism entirely funded by the industry.
The DfT intends to make this happen by introducing an SAF mandate from 2025 that will require at least 10 per cent of jet fuel to be made from sustainable feedstocks by 2030. The SAF mandate will provide an incentive to produce the fuel via price support from tradable certificates with a monetary value.
In a letter, the charities said it would be “grossly unfair” for the taxpayer to cover the funding costs of the scheme, citing the DfT’s annual National Travel Survey, which found that the majority of British people did not fly.
It expressed concern that while the government proposes the scheme should be industry funded, this could “be interpreted in different ways” that could ultimately see taxpayer money being used to support it.
It said that ‘industry-funded’ should explicitly mean that the costs of any revenue support mechanism should be paid for solely by the aviation sector and that no existing or future taxes on the sector should be earmarked to fund the scheme.
“At no point should there be any potential for Treasury money to be used to cover any scheme costs; the scheme should be administered by a body that is not the Treasury, similar to how the Low Carbon Contracts Company operates regarding renewable energy generation,” the letter states.
Earlier this year, a survey of aviation experts found that the majority were not convinced that the sector will become carbon neutral by the stated 2050 goal.
